I'm writing to let you know about one part of the new Housing Reform Bill that President Bush signed last week that may be of interest to you. The Bill was almost 800 pages long, so our resources are still deciphering it. But, there is one part that will be of interest to many First Time Home Buyers.
The term "First Time Home Buyer" typically refers to a home buyer that has not owned any real estate in the past three years. Now, here's the information from the Bill, as I understand it.
First time home buyers are now able to obtain a "Tax Credit" of $7,500.! This is the first item that caught my eye and ear before the bill was even signed. Tax credits are dollar for dollar credits, unlike tax deductions where we only receive a percentage of a deduction based on our tax bracket as with mortgage interest. The "Tax Credit" will apply to all 1st Time Homebuyers that purchased a home from 4/9/2008 thru to 6/30/2009. If you qualify, when you file your Federal Tax returns next year, you will receive this $7,500. tax credit.
There are some income guidelines... If you earn more than 75K for single buyer or 150K for couples, the Tax Credit phases out rather quickly for those higher income earners. Very important here: This Tax Credit is like an interest free loan and will be paid back to the Government. The Gov't giveth and taketh away. The Tax Credit will phase out by $500/year of home ownership up to 15 years, after which, there is nothing to pay back. And, if the home is sold in less than 15 years and there is limited to no capital gain on the property, the Tax Credit may also be cancelled. More details to follow as all of this gets clarified. Buy a home and receive $7,500. from the Gov't next tax season. (see your accountant on the full impact of this and how it applies to you directly. Need a good accountant? Call us.) If you have any questions about the Bill, please do call or write. We're here to help you.
There are other changes to some loan programs that might make purchasing a home easier today than it was just a few months ago. Call us, 717-431-9299 or your local lender, if you have any questions or wish to discuss your home purchase plans in more detail.
Ken Pederson
Certified Mortgage Planner, CMPS
FAIRWAY Independent Mortgage Corp
PA's Best Lender
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