No Interest Loan of $7500 for Buyers
August 28th, 2008
President Bush signed into law the “Housing and Economic Recovery Act of 2008“. This rescue plan for the housing market contains a tax credit of up to $7500 for buyers. Here are the details:
If you are a First Time Home Buyer who closes between April 9th, 2008 and July 1st, 2009, you may be eligible. First time home buyer is defined as someone who has not owned a home in the past 3 years.
The amount you can claim is the smaller of 10% of the purchase price or $7500.
This tax credit should be viewed by the consumer as an interest free loan, because unfortunately, you have to pay Uncle Sam back! The good news is that you start to pay it back after 2 years, and you have 15 years to pay it all back.
So here is a real world scenerio…
You go out and buy your first home. Take the tax credit at the end of the year and get a fat tax refund of $7500.
Pay off high debt credit cards, take care of home remodeling like a new roof, invest the money in your 401K, etc, etc.
That saves you potentially thousands in interest, build equity in your home, or will return you thousands in your invested stocks.
Year 3 you will be paying less than $700 back per year to the Feds. Sell the house and it is taken out of the proceeds in full.
Another qualification you must meet:
Modified Adjusted Gross Income has to be no more than $75000 single, or $150000 married, before it becomes phased out. It phases out completely at $95000/$170000.
Learn more at this helpful site: National Association of Home Builders
Ed Daniels is with Remax Executive Realty and can be your guide to purchase a first home. 10 years of experience as a full time local Realtor can help you negotiate this market ripe with opportunties. Call 508-341-7880 to reach The MAhome Team.
Categories: Mortgage Updates, Real Estate
This entry was posted on Thursday, August 28th, 2008 at 3:22 pm and is filed under Mortgage Updates, Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
