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The tax credit has gone up to $8,000 with no pre-payment requirement for 2009 — but only if you settle on your home before December 1st of this year.

In addition, you can now use the $8,000 as additional down payment (a minimum of 3.5% must still be from your own funds) or toward your closing costs when you purchase your home.

How does this work?  Your lender will provide a “bridge loan” of the portion you need at time of settlement.  You pay off the bridge loan when you receive your credit from the IRS.

Click HERE to find out more ways to utilize your $8,000.

It’s a great time to get off the fence and buy a home!

Here is some important information to help you take advantage of the credit if you qualify.

Under current rules:

• You must be a first time homebuyer (have not owned a house in the past 3 years) and have closed on a home purchase between April 8, 2008 and July 1, 2009 (this date may get extended to the end of 2009).
• Download the IRS Form & instructions here.  IRS Form 5405
• The $7,500 is available to singles, married couples filing jointly and unmarried co-purchasers, provided each person meets the nonownership test for the previous three years. Married couples filing singly can claim up to $3,750 each. Unmarried individuals can allocate the credit on their filings according to their respective ownership shares or capital investments in the house.
• Only works for your principal residence - or in the IRS’s words, “the one you live in most of the time.”  This is not valid for second homes, investment properties or houses outside the United States. However, the definition of “home” is quite broad - it “can be a … houseboat, housetrailer, cooperative apartment, condominium or other type of residence,” according to Form 5405.
• You are not eligible if your adjusted gross income is above $95,000 (single filer) or $170,000 (married joint filers). Married couples with incomes between $150,000 and $170,000 are eligible for reduced credits, based on a phase-out schedule. Single filers with incomes between $75,000 and $95,000 also are subject to reduced credit limits. District of Columbia residents who are eligible for the city’s first-time homebuyer credit are barred from use of the federal tax credit. Taxpayers who use tax-exempt mortgage bonds issued by state or local governments to finance home purchases also are ineligible.
• You can’t claim the $7,500 credit if you buy your house from a “related person” (a spouse, parents, grandparents, children or a corporation or partnership where you own more than 50 percent of the stock or capital interests).

This tax credit may end up being a true credit that does not require repayment.  If you qualify, it’s worth considering when purchasing a home.  Just one more reason that this is a great market for buyers – in case low interest rates, more reasonable home prices, eager sellers and a large choice of homes for sale isn’t incentive enough.

Enjoy the following videos to learn about

• reducing energy consumption and saving energy to progress toward a Green Home. Hint: these tips do not involve installing solar heat.
• Financing a home purchase
• Selling a home — curb appeal
• The value a Realtor brings to selling your home
• Avoiding foreclosure

http://www.sfrealtors.com/video/mris/short/33

Families earning the median income in some of America’s largest cities don’t earn enough to pay for much more than basic needs, according to Forbes magazine’s analysis of data from the Economic Policy Institute and the U.S. Census Bureau.In other cities, annual costs for the basics are much lower, giving families a cushion for emergencies and the ability to enjoy some extras.

Here are the most family-friendly cities, using basic living expenses as a percentage of income:

• San Jose, Calif. , 55 percent
• Austin, Texas, 64 percent
• Kansas City, Mo. 67 percent
• Salt Lake City, 68 percent
• Baltimore, 68 percent
• Detroit, 68 percent
• San Francisco, 68 percent
• Seattle, 70 percent
• St. Louis, 71 percent
• Chicago, 72 percent

Source: Forbes, Francesca Levy (12/02/2008) / Realtor.org Daily Real Estate News (12/02/2008)

Welcome to Teri Deane’s Blog! This blog will provide you with valuable information, tips, and general insight into the real estate market in Columbia.