Becoming a homeowner is a big step with big rewards. It can, however, also be a challenge, especially when it comes to saving for a down payment.
Thanks to a new law that went into effect in 2019, Alabamians can save for a down payment with the First-Time Homebuyers Savings Account Program, a tax-free savings account dedicated to the purchase of a first home. It also applies to those re-entering the housing market, for those who haven't owned a home in the last 10 year.
Individuals or couples can open one of these tax-free savings accounts at any local bank, credit union or other financial institution in Alabama. The principal deposits and earnings should be deductible on state income taxes. Savings from the account can be used to pay for the down payment and/or closing costs for the purchase of a single-family dwelling.
Many people believe that they need to put 20% down to purchase a home. The average down payment is actually closer to 11% and in many cases the down payment can be even lower than that.
If you want to own a home, opening a tax-free savings account through the First-Time Homebuyer Savings Account Program is an important first step in making your dream a reality.
To learn more about this program visit: AlabamaRealtors/Consumer/first-time-homebuyer