Time is running out!
Only 6 Days left to get under contract!
April 30, 2010 is the cutoff for first time buyers to be under contract in order to take advantage of the $8,000 Federal first time buyers tax credit. Asheboro/Randolph County NC First Time home buyers who don't already have a home under contract are running out of time.
When this bill was signed into law it extended the existing $8,000 first time home owners tax credit through April 30, 2010 for First Time Home buyers and includes a 60 day extension if a binding contract is already in place prior to the deadline. The credit can be utilized for up to 10% of the home purchase price to a maximum of $8,000. A first time home owner is defined as someone who has not owned a residence in the last 3 years.
Existing homeowners will now receive a tax credit of $6,500 if they have lived in their current homes for 5 years. This tax credit is available for the purchase of 'principle residences' only, purchased for $800,000 or less. Home owners will be able to utilize 10% of the purchase price up to a maximum of $6,500 .
This bill increased qualifying income limits for the tax credits as follows:
- Taxpayers filing as single: Increased to $125,000
- Taxpayers filing jointly: Increased to $225,000
If a home buyer utilizes this tax credit and does not reside in the home for a minimum of 36 months the tax credit must be repaid. This means the home buyer must use this home as their principle residence for no less than 3 years to retain this tax credit. Active duty military personnel are exempt from this requirement under military order. These tax credits can not be claimed by anyone under 18 years of age.
This article should not be construed as tax advice, you should always consult with your tax advisor before making a purchase to decide on what course of action is best for you individually.
In the last few months I have received lots of calls from first time home buyers interested in utilizing the $8,000 tax credit who were seeking advice. Many of these buyers were barely able to scrape together the 3 1/2% required for the down payment required to qualify for an FHA loan. I asked these buyers how they will facilitate necessary and/or emergency repairs to the home once purchased, buyers should ask themselves this question before beginning their search. There are many things to consider when you are purchasing your first home. One of the most overlooked details when purchasing a first home is after purchase expenses, which can be considerable.
When you purchase your first home be aware of the age of the existing components of the home:
- Age and condition of roof
- Age and composition of plumbing
- Age of electrical components and existing upgrades
- Condition of foundation
- Age and condition of windows
- Age and condition of kitchen
- Age and condition of bathroom
- Age and condition of existing flooring
These items are all costly repairs and upgrades. If you don't have the available cash to facilitate these repairs or upgrades how will you handle it when the need arises? Buying a home is a large responsibility, first time buyers should educate themselves and think to the future before deciding to buy today. An $8,000 credit today will not help you if you have to spend $40,000 to replace a roof 12 months later and the funds are not available.
Important points for Asheboro/Randolph County home buyers:
This article addresses issues that many first time home buyers do not consider, that being the remaining life of the existing systems currently in the home and the cost of future replacement.
I don't just sell homes. I want to educate my clients on a consultative basis. When you are buying your first home your agent should be able to provide you with more than a list of available homes. Choose your agent carefully, find somebody that you trust is working with your best interests in mind.
Comments(0)