April 20th, 2009 4:03 PM by DANIEL POULOS
If you bought your first home in 2008 you are bound by the benefits of last year's tax code. The maximum credit for 2008 was $7,500 and involves a payback period. The American Recovery and Reinvestment Act of 2009 makes the first-time home buyer tax credit bigger and better! To cash in on this credit you must purchase your first home before December 1st, 2009
A first-time home buyer is considered to be someone who has not owned a principal residence for the prior 3 years. Married couples must earn less than $150,000 to earn the maximum credit while the corresponding income limit for individual buyers is $75,000. The limits apply to something called your "modified adjusted gross income" so it's important to speak to a professional to determine eligibility.
The two significant improvements over the 2008 program are that the maximum credit has been raised to $8000 and it does not have to be paid back as long as the house remains the buyer's principal residence for 3 years. Last year's tax credit was really more of an interest-free loan while the 2009 credit is truly free money! Remember, this is not a tax deduction; it's an absolute "money-in-the-bank" credit.
Early critics of the program suggested that most eligible buyers probably do not pay $8,000 in yearly taxes so the credit wouldn't benefit them. The beauty of this incentive is that if the buyers owe or paid less than $8,000 in income taxes the IRS will send them a check for the difference! For a simple video explanation of the program please visit www.MyEliteLending.com/taxcredit2009 .
The stars are really alligned for anyone who has been thinking of buying their first home. First, some areas have experienced price drops as high as 80%. Next, interest rates are at the lowest rates in modern history. Add to that the cold cash incentives provided by the government, and the opportunity is absolutely irresistable! Just a few years ago Palm Beach County was faced with a seriuos lack of affordable housing and young families had the feeling that they had "missed the boat" and would never get their foot in the door of home ownership.
Now they get another chance to experience the proverbial American Dream!
The only roadblock might be the tightening of lending standards. It makes no sense to spin your wheels looking for property until you have been pre-approved for your financing by a mortgage professional. Consultations and pre-approvals are conducted for free by Elite Lending in Jupiter, FL. Please call 561-575-5626 to speak to a mortgage specialist and find additional details at www.EliteLending.biz.