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Are there any first time home buyer incentives out there now?


Skins_Fan82

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Not sure on the tax credit thing, but one thing to look out for in the current market is that you get a fixed interest rate. I am not an expert but with the looming credit rating drop of the Uniterd States from AAA, I would assume that interest rates on mortgages will be substantially higher and you don't want to get burned. Just something to ask your broker about.

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Yeah, luckily I locked in my rate before August 2nd. Interest rates have already gone up in the last few weeks.

I'm going VA loan so I don't need a down payment which has been nice, but I'm thinking there has to be SOMETHING out there, other than claiming my house come tax time.

I apologize in advance for what might seem like dumb questions, but I don't have any guidance and im doing all this on my own. Im clueless lol.

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I wanted to start a thread aobut this on monday, so just to add to the convo... I was one of the many Americans who participated in the 1st round of the $8,000 tax incentive for first time homebuyers. The first one is owed backed entirely. The 2nd round of the Tax Incentive stated that none was due back (although I don't know all the sub-rules of this).

For the one I participiated in, it works as such... starting with tax returns filed for the 2010 tax year, you must pay $500 minimum but can pay more if you choose to.

I'm about to sell my house and have a balance of $7,500 due back to the IRS for the tax incentive program. The balance is due when the house is no longer the primary residency. I've wondered if it was due at closing or when I file my taxes. After research, there are a number of options available to me. At closing, the balance is identified and filed with the paperwork. After that, when I file my taxes the balance is taken care of. There is a small benefit to this though... IF I sell the house at a lose, which is defined as value less than what I paid for it, then I owe back only the difference.

For instance... using simple numbers... let's say I owe $7,500 of the tax back...

If I bought the house for $200K... sold at $190K... I would owe nothing... b/c the $10K loss is higher than the balance due to IRS.

However...

If I bought the house for $200K... sold for $195K... I would owe $2,500... b/c I took a $5K loss which is taken out of the balance due to IRS.

It's probably safe to say that everyone who participated in the program 3 yrs ago would be under water at this point of our economic downturn.

There are more rules about who you can and can't sell to in order to avoid paying it back.

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