First-Time Home Buyers - Time is Running Out to qualify for your $8,000 Tax Credit

This past month, I've seen headlines proclaiming "120 days left", "115 days left", "95 days left" for the $8,000 First-Time Home Buyer Tax Credit.  Sure, this program is in effect through the end of November, but those headlines are misleading.

To qualify for the credit, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the past three years.  The full credit is available for single taxpayers with incomes up to $75,000 and married couples, with incomes up to $150,000.  The credit phases out to zero, at incomes of $95,000 and $170,000, respectively.

In order to receive the credit, you must close on your home purchase no later than November 30, 2009

As of July 30, the Federal Reserve Board made effective the final changes to the Mortgage Disclosure Improvement Act of 2008 (MDIA).  The final rules revise the disclosure requirements for mortgage loans made under the Truth in Lending Act (TIL), and apply to all local banks, major lenders, mortgage bankers and brokers.  As a result, it can now take 45 and possible 60 days (FHA loans) from the time you finalize the contract on your home, until the closing.

Once you agree to a price on your new home purchase, you need to allow time to conduct inspections, possibly renegotiate the price, finalize your contract and secure your mortgage.  Allowing for that time means you only have until the end of September, or certainly no later than mid-October, to find your new home and finalize your purchase contract.

Don't miss out on this opportunity.  Interest rates remain relatively low, prices have softened and the government is offering you an incentive to buy. 

Copyright © 2009 Marilyn Katz, WestportCTProperties, All Rights Reserved... First-Time Home Buyer Tax Credit - Time is Running Out