Now is the time to buy your first home

If you are a first time buyer who bought your home this year, you can get 10% of the purchase price up to $8,000 as a credit. You can either amend this last year's return (8-12 weeks) or claim it on next year's taxes. The important thing to know hear is the definition of first time homebuyer may still include you even if you have owned a home before. Essentially, if you haven't owned a home (trailerhome, houseboat, cottage, house. Basically anything you live in and own) in the past 3 years, you are considered a first-time homebuyer and you qualify for this. You must then also live in the home for three years.

Considering the pricing and inventory in the market, now is the time to start looking. Also, you need to complete the sale by November 30, not the end of the year. This is a one-time deal that any apartment dweller should not pass up. One caveat, PAY ATTENTION to your documents at the closing. Don't be afraid to question the terms of the mortgage as to what you were promised. They will try to rush you to sign the mountain of documents but READ the mortgage. As with any deal, if you sit down to sign, you must be willing to get up and walk away if necessary. That is another reason to start the hunt now rather than wait until the deadline is hovering.


First-Time Homebuyer Credit:

For home purchases made after December 31, 2008, the new law raises the first-time homebuyer tax credit to $8,000 (from $7,500) and extends that credit to November 30, 2009. Any required repayments to IRS are eliminated after 36 months in the home. Phase-outs begin for individuals with AGI greater than $75,000 ($150,000 for MFJ) for the year of purchase. (Phase-outs apply for both 2008 and 2009.) A taxpayer who bought a home on or after April 9, 2008, and before January 1, 2009, will not qualify for the new homebuyer credit; the purchase will continue to be governed by the original 2008 first-time homebuyer credit.