It will also help new home buyers.
Hidden within the thousands of pages of the stimulus package, also known as the American Recovery and Investment Act, is one aimed at encouraging first-time home buyers to stop waiting and start buying. The first-time home buyer credit has been changed for the better. Instead of up to $7.500 tax credit to be paid back over the next 15 years, that amount has been increased by $500 to $8,000 and no longer has to be paid back. I'm going to repeat that last part; the tax credit no longer has to be paid back.
The dates have changed also. The new provision requires that the home be purchased between January 1 and December 1 of 2009. Even if you don't make enough to pay $8,000 in taxes, don't worry. You will get the difference in a tax credit, giving buyers a little extra spending money next year. Plan to declare this on your 2009 taxes. If you already bought a home and took advantage of the old rebate on your 2008 taxes, you can file an amendment for the new rebate.
Buyers making more than $75,000 for singles or $150,000 for couples filing jointly are not eligible.
Want to know more? Call me at 612-728-2204 or email me at spfox@cbburnet.com and put "First-time buyer" in the subject line.
Homeowners facing foreclosure may be seeing a helping hand from the federal government, but most of the details won't be released until March 4, at the earliest.
What we know now is that homeowners who are under water (their house is now worth less than they owe on their mortgage) or who are in danger of falling behind in their payments because of life circumstances, may soon have a way to refinance into a more affordable loan. Not everyone will qualify. As of now, the relief is available for first mortgages and only to those whose mortgage is held or secured by Fannie Mae or Freddie Mac. If you don't know if you qualify, contact your mortgage holder and ask if your loan is included in these categories.
"We are still trying to digest the information," said Ed Nelson, the marketing and communication manager at the Minnesota Home Ownership Center, a non-profit created to help homeowners in financial difficulties. "As with many things with the government, there's a time lapse till it gets down to street level. Participation is voluntary, so the details of who can qualify and which lending institutions are participating won't be announced until March and even after that, many lenders will take their time about deciding whether to sign on. "
The Treasury Department is still deciding the monthly income limits, minimum and maximum loan amounts and other details.
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