First Time Buyer?
Buying your first house is an exciting, independent milestone in one's life. The process can be a little overwhelming if you don't know the steps to take. I have worked with first time home buyers for over ten years and I still get excited for them! If the lay of the land is explained fully the agent and client can actually have some fun in the process.
This page is devoted to the first time buyer; with tips, current news and the basics to get you to know what to look for in a buyer's agent and what to look out for in a transaction. Congratulations on making it this far…you're almost home!
Click on a step below in the home buying process to go to that page for detailed information.
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Home Buyer News:
The First Time Home Buyer Tax Credit Expires April 30, 2010!
Basic facts you need to know about the Homebuyer Tax Credit:
This is not just for new home buyers. Existing home owners buying a new primary residence may also quality for a tax credit.
Qualification Period
- The deadline for any home buyer tax credit is extended only until April 30th 2010. You must be in a purchase and sales agreement by this date. As well, the closing must take place before July 1 2010. If you and your spouse claim the credit on a joint return (both of you must meet the income and past ownership criteria to qualify), each spouse is treated as having been allowed half of the credit for purposes of repaying the credit. So the total amount claimable is still only $8000.
Income qualification limits
- The home buyers’ credit would be available to individuals with a modified adjusted gross income (MAGI) of up to $125,000, or $250,000 for couples.
- Current Homeowners looking for a replacement primary residence could also qualify for a $6,500 (up to $3,250 for a married individual filing separately) under the new “long-time resident” provision. They must have lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the replacement home is purchased.
Claiming the New Home Buyer Credit
- For qualifying purchases, taxpayers have the option of claiming the credit on either their 2009 or 2010 return. A new version of Form 5405, First-Time Home buyer Credit, is now available on the IRS website.
In addition to filling out a Form 5405, all eligible home buyers must include with their 2009 tax returns one of the following documents in order to receive the credit:
- A copy of the settlement statement showing all parties' names and signatures, property address, sales price, and date of purchase. Normally, this is the properly executed Form HUD-1, Settlement Statement.
- For mobile home purchasers who are unable to get a settlement statement, a copy of the executed retail sales contract showing all parties' names and signatures, property address, purchase price and date of purchase.
- For a newly constructed home where a settlement statement is not available, a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.
FYI The new $8000 credit can be used towards the down payment of a house bought in the credit qualifying period. You need to work with your lender to take advantage of this provision.
Tax Credit Exclusions
- Homes that cost more than $800,000 aren’t eligible for the credit and you must be over 18 years old to claim the credit (dependents are not eligible to claim the credit either). Those who sell their new home or stop using it as their main residence within three years would have to repay the credit. You cannot claim the credit if acquired your home by gift or inheritance OR if you acquired your home from a related person.
FYI Members of the Armed Forces and certain federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and still qualify for the credit. An eligible taxpayer must buy or enter into a binding contract to buy a home by April 30, 2011, and settle on the purchase by June 30, 2011.
