Pick a house, any house, and if you're a first-time buyer that means 10% of the home value up to $8,000 will be added to your federal tax refund.
Millions of young adults who purchased their first home in 2009 will receive this money when they file income tax returns shortly. Millions more who purchase between January 1, 2010 and the deadline of April 30 will receive it in the months ahead. Many more, however, are sure to miss it.
First-time buyers, especially those already paying rent, hesitate for a variety of reasons but mostly because they don't understand the process, don't feel their down payment is large enough, or don't believe they would be approved for financing. So we'd like to share some first-time buyer basics.
Because FHA mortgage loans are insured by the Federal Housing Administration, the down payment requirements are established by HUD, the Deparment of Housing and Urban Development. Currently, FHA mortgages require a first-time buyer to have 3.5% down payment. HUD also permits family members to give the 3.5% down payment to the first-time buyer as a gift and permits lender fees, title charges and other closing costs to be paid by the seller on behalf of first-time buyers at the discretion of the individual seller.
A two-year job history, two years in the same field of work or first job out of college ordinarily satisfy employment requirements together with a minimum credit score of 620 and no history of a bankruptcy or foreclosure.
FHA uses debt to income ratios which take the buyer's current obligations such as auto loans, student loans or credit cards into consideration when calculating the buyer's maximum purchase price. With today's low interest rates, most first-time buyers find that their maximum purchase price falls between 2X-3X their annual income.
So what would you do with a check for $8,000? Pay off student loans? An auto loan balance? Several month's home payments?
If you or someone you know is currently renting but would rather own a home, your RE/MAX 2000 professional strongly encourages you to consult a local, reputable lender to determine your maximum purchase price in today's market. Please don't let this opportunity pass by without even trying. There's less than 100 shopping days left.
Limitations: Individual purchasers with income exceeding $125,000 or married couples with combined household income of $250,000 may not receive full credit. Home purchased cannot currently be owned by a blood relative, must be intended for use as the purchaser's primary residence. First time buyers are defined as anyone who has not owned or had an ownership interest in their primary residence in the past 3 years. If purchaser has an outstanding unpaid tax obligation to the IRS, the $8,000 will first reduce that obligation with the balance refunded.