First Time Home Buyer Tax Credit

First-time homebuyers do not necessarily have to go through a real estate agent to receive the tax credit. Homes that are “for sale by owner” also are eligible. First-time homebuyers who purchase a home in 2009 can claim the credit on either a 2008 tax return, due April 15, 2009, or a 2009 tax return, due April 15, 2010. The credit may not be claimed before the closing date. First-time buyers can claim a credit worth $8,000. The added bonus is that the credit is refundable, which means that filers will see a refund of the full $8,000 even if their total tax bill was less than that amount.

First-time home buyers purchasing any kind of home new or resale are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009.

Taxpayers who qualify for the first-time homebuyer credit and purchase a home this year (before Dec. This special feature can put money in first time buyers' pockets right now rather than waiting another year to claim the tax credit. Taxpayers are urged to consult a professional to determine the tax consequences of a sale. Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.

Taxpayers who file their taxes after receiving an extension can still file electronically, the IRS says. By e-filing and arranging for direct deposit, you can get your refund in as few as 10 days. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.

IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.

File for the tax credit when preparing your 2009 federal tax documents by using Form 5405. You may also be eligible to claim your 2009 purchase on your 2008 tax filing.

Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Partial credits of less than $8,000 are available for some taxpayers whose MAGI exceed the phase-out limits.

FHA put up a mortgagee letter stating how the program was intended to work, and then took it down the same day. The details that were supposed to come out within the week didn’t come out. FHA has a list of approved lenders that can use the bridge loan type product.

Families can only access this credit after filing their tax returns with the IRS. The announcement details FHA’s rules allowing state Housing Finance Agencies and certain non-profits to ‘monetize” up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Families will now be able to apply their anticipated tax credit toward their home purchase right away.

Extend the time frame that the tax credit is in effect to somewhere near the end of 2010 depending on when the bill is passed (if it gets passed). The bill suggests that it be in effect for 1 year from its approval into law.

Owning a home can take a lot of time and expense but for many, its drawbacks are far more complicated than sticks, leaves, and paint. Owning a home can result in many tax advantages such as deducting mortgage interest and real estate taxes if you itemize deductions. The government’s recent attempts to stimulate our economy have included additional tax advantages for some first-time home buyers.

Ownership of non-primary residences such as rental properties or vacation homes does not disqualify a first-time home buyer from the $7500 tax credit. All you have to do is claim the tax credit on your federal income tax return.

Thank you for taking your time to read this article. Your comments on this article will be highly appreciated. To access hundreds of Gurmit’s articles please visit http://gurmittoor.blogspot.com.

Information shared here does not constitute financial, legal, or other professional advice, and no attorney-client or confidential relationship is or should be formed by use of the site. This article is intended to provide general information only and does not give advice which relates to your specific individual circumstances. Information in this document is subject to change without notice. Any link-listing or ad-listing on this site does not constitute any type of endorsement.

Gurmit loves travelling; he has been over 70 countries. He speaks fluent Cantonese, Polish, Hindi, Punjabi and English. Gurmit is an author, writer, insurance and mortgage expert. He frequently writes on various topics of interest to his readers. Gurmit Singh is a licensed mortgage expert with Dominion Lending Centres Mortgage Villa.

Gurmit Singh, mba

Mortgage Expert

M08009905

Dominion Lending Centres Mortgage Villa (11574)

Email:gurmit@gurmitsingh.ca

Website: http://www.gurmitsingh.ca

How to Buy Your First Home?

First time home buying is close to the most stressful undertaking in life. Obtaining the 'Canadian Dream' of owning the first home can be full of good exciting stress or it can be agonizing torture. How you want the process is up to you. You can go it alone with the help of well meaning friends and family or you can put together a winning team of pros including (not limited to) Realtors, appraisers, and a good mortgage professional. A good team can make the experience easier and exciting and the following is a brief look at who's needed and how they will help.

The Realtor:
Parents do not hire child care, nor do employers hire associates with out an interview, and reference check, nor should you. This will be your team manager, your closest partner. The agent has the experience and the answers to the tough questions. Some advise hiring a duo to always have someone on the job. Although some agents are willing to work for the buyer and the seller, and it is legal, avoid this and find someone who is exclusive to your interests. The agent is an experience negotiator and will become important during the offer process.

Mortgage or Banking Professional:
If you have the credit scores and down payment to be able to get you're financing with the bank, good for you! That is not as common as it seems so most first home buyers will go through a Mortgage Consultant. Even with the ability to use the bank lender, the Mortgage Consultants have access to a broader base of lenders and can get the best offers for your position. There is more involved than interest rates and monthly payment amount, so the Mortgage Pro you choose should also be interviewed, and the references checked. The best way to handle the process is the get a guaranteed preapproval which is a great tool for using when while looking for the right house. The inexperienced buyer may get their heart set on a home that is too expensive, or can not be financed for any number of reasons.

Appraiser:
Get a second opinion on the value of the property, again you can use the seller's but that appraiser is working for the seller and you want to be sure the valuation of the home is accurate.

Contractors, Architect, Designers etc:
Building your first home from the ground up can be exciting, but there are a host of other issues with the project that require expertise. One who can build a frame may not understand the proper material needed for the electrical system. You can pay the contractor who has access to the other tradesmen to finish the home.

Lawyer:
The only people who really know what is in the fine print are the one who wrote the fine print! Get an attorney with real estate experience. A great criminal lawyer who happens to be a friend of your cousin may not notice a small detail that a lawyer who has experience would. Closing procedures are involved and it would be best to have your lawyer there to oversee the wording and all the conditions agreed on in the offer are met. A contractor may not always be honest and having a present lawyer who is working for you may keep that contractor on the job working for you. If an issue with local codes and guidelines for building come up, the buyer already has the right representation.

Inspector:
It is almost certain that unless the buyer is an inspector, a structure, plumbing or electric system problem may be missed. The negotiation process will involve the topic of problems that affect the price or determining if the home can be financed. The walk through at before closing is another good time to have your inspector with you to ensure all conditions have been met. If the first home is being built, the inspector is crucial. There are codes for safety, esthetics, etc; proper procedures and using the proper materials are only some of the issues that arise during the building process.

The first time home buyer usually knows as much as the first time parents caring for a baby. Luckily, for buying the house there are numerous resources to help with the day to day business leaving the buyer to get the best deal for the investment. Most importantly the team members you hired are experienced and while every decision is yours, communicate and work with the team. Find out ahead of the appointment with the Mortgage consultant or the Realtor what they from you and work to ensure you do all you can. You are the most important member of the home buying team.

Thank you for taking your time to read this article. Your comments on this article will be highly appreciated. Please visit http://gurmittoor.blogspot.com to see Hundreds of Gurmit's articles.

Gurmit loves travelling, he has been to over 70 countries. He speaks fluent Cantonese, Polish, Hindi, Punjabi and English. Gurmit is an author, writer, insurance and mortgage expert. He frequently writes on various topics of interest to his readers. To get in touch with Gurmit Singh, please visit his website www.gurmitsingh.ca

Gurmit Singh is a licensed mortgage expert with Dominion Lending Centres Mortgage Villa.

Gurmit Singh, mba
Mortgage Expert
M08009905
Dominion Lending Centres Mortgage Villa (11574)
Email:gurmit@gurmitsingh.ca
Website: http://www.gurmitsingh.ca