By now, many first time home buyers are aware of the $8,000 First Time Home Buyer Tax Credit. A first time home buyer is defined as a buyer who has not had an interest in a primary residence within the past three years. The tax credit provides a credit of 10% of the purchase price of a home to the buyer, up to a sale price of $80,000; hence, first time home buyers are eligible to receive checks from the IRS in amounts up to $8,000!
The tax credit is only in effect for settlements which take place BEFORE December 1, 2009 - i.e., the settlement must take place no later than November 30, 2009. The tax form with which to apply for the tax credit is IRS Form 5405.
Bear in mind that in today's credit atmosphere, it can take a minimum of 45 days to get a mortgage approved. Therefore, it would be desirable for first time home buyers to have a home selected and under agreement no later than early October 2009.
What's going to happen as we get closer to the deadline fot the $8,000 tax credit? All the first time buyers who haven't yet bought a house are going to be in a rush to get their purchase on the books in time to be eligible for the credit.
When is the latest allowable settlement date? November 30, 2009, which happens to fall on a Monday. That date is going to be the craziest date for settlements that anyone has ever seen! It will be hard to reserve a time with a title company to hold the settlements, and there will be delays with financing packages from lenders due to the rush.
Some settlements will be delayed for one reason or another until the following day - and there goes $8,000 out the window.
My suggestion? If you're a Lancaster County, PA first time home buyer, don't wait for the last minute to look for a home. Leave plenty of time for your settlement - and don't schedule your settlement for the last day in November.
Brian Schulman offers expert real estate representation for buying and selling homes in Lancaster County, PA. To learn more, visit http://www.FindLancasterHomes.com/