HURRY UP! GET YOUR TAX CREDIT!!

By
Real Estate Agent with eXp Realty Lic#6502-278999

THERE ARE SIGNS THAT BUYERS ARE BUYING AND THE LOCAL REAL ESTATE MARKET IS BEGINNING TO RECOVER

You must however be prepared to lose out on your "Obama Bucks" if you do not have a primary residence under contract very soon!

$8,000 for the first time buyer

$6,500 for a second time buyer

 Here are some of the most frequently asked questions on the changes to the Homebuyer Tax Credit 

Q: Existing homeowner credit: Must the new house cost more than the old house?

A: No. Thus, for example, individuals who move from a high cost area to a lower cost area who meet all

eligibility requirements will qualify for the $6500 credit.  

Q: I am a first-time homebuyer but was not within the prior income limits at the time I entered into

my contract to purchase on October 30, 2009. I will be covered, however, by the new income limits. When I go to settlement, will I be eligible for a credit?  

A: Yes. The new income limitations go into effect as soon as the President has signed the bill. The income limit

and other eligibility rules will look to your status as of the date of purchase, which is the settlement date. So you should be eligible for the credit (or a portion of the credit if you're within the phaseout range).

Q: I am an eligible existing homeowner. I have a fair amount of equity in my home. I have found a home

with a nonnegotiable price of $825,000. Will I be able to use any of the $6500 tax credit?         

A: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount above $800,000

makes the home ineligible for any portion of the credit. The $800,000 is an absolute ceiling.

Q: I owned my home for 10 years, but sold it two years ago year and have been renting since. If I

purchase a home, will I be eligible for the $6500 tax credit if I meet all the other eligibility tests?

A: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you will qualify

for the $6500 credit. For example, Say John and his wife bought a home in 2000 and lived there until 2008 when he got a divorce. Whether John has been renting or bought in the interim, he WOULD INDEED be eligible for the credit because he owned a home and occupied it as his principal residence for 5 consecutive years out of the last 8 years. The keyword here is "consecutive." As long as he lived in that house for 5 years straight what he did since 3 years doesn't impact eligibility.

Q: I am an eligible first-time homebuyer. I entered into a contract to purchase on November 1, 2009. Do

I have to go to closing before December 1? How does the extension date affect me?

A: You do not have to close before December 1. Once the legislation was signed, it was as if the November 30

date had never existed. Therefore, so long as the binding contract is in place before April 30 and closes by July 1, the purchaser will be eligible for the credit.

In closing, please consider the following:

On a $200,000 mortgage (utilizing the FHA mortgage and 3.5% minimum required downpayment) a buyer would have to put down just $7,000 of their own money to acquire the home. NOW, add back the money President Obama is offering ($6,500-$8,000) and VIOLA!!! *Esentially zero down!! It's a NO Brainer...

 

Posted by

Carlo Gobba is an Associate Broker with RE/MAX Classic at 36700 Woodward #100 Bloomfield Hills, Michigan 48304 and email: Carlo@CarloGobba.com with offices all over Southeast Michigan to serve you.

Listing and Selling homes is what I am Passionate about and it shows. Buy and sell through me to receive my unique Guarantee: "Your Home SOLD In UNDER 120 Days at a price acceptable to you OR, I'll Pay You!" www.SoldInUNDER120.com

The market is complex and you need a great agent on your side, So connect with Carlo Gobba today! Carlo Gobba is "A HouseSold Name!"-sm

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