The senate has reached a tentative deal to extend and expand the tax credit for first-tim buyers.
The agreement would extend the existing $8,000 credit for first-time buyers, and also offer a new credit of up to $6,500 for move up buyers, pending certain restrictions. Read the article posted by the Wall Street Journal.
HOME BUYER CREDIT GETS NEW LIFE
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Wednesday, October 28, 2009
FIRST TIME HOME BUYER PROGRAM - TIME IS RUNNING OUT!!
TIME IS RUNNING OUT FOR THE FIRST TIME HOME BUYER CREDIT.
Although the $8,000 First-Time Buyer Credit runs through the end of November, Buyers need to be aware of the time it takes to close on a home. Let's move backwards on the calendar to help a Buyer find out the last date they need to execute a contract for the purchase of a home.
To close in time to qualify for the $8,000 Credit, Buyers need to execute the purchase contract by OCTOBER 8, 2009. Here is why...
1. You never want to close on the last day of a deadline, so Monday, November 30 is a bad day to try and close. Since it is the last day of the deadline, numerous buyers that wait to the last minute will be pushing to close on that day. As a result, lenders will be exceptionally busy and many closings will not make the deadline. You want to avoid this day at all costs.
2. Thanksgiving is on November 26, and typically businesses are closed on November 27, meaning November 25 becomes the absolute last day you would want to close on a home. But, funding can take some time, so to give you a few extra days, I suggest you back up to the week of November 16-20 as a closing week. Preferably no later than November 17. This way, if you close on November 17, and funding takes 3 days, you will beat the deadline and can enjoy Thanksgiving with your family, without the stress of closing.
3. With November 17 as an established closing day, now lets back track to find your execution date. When buying a home, you always want an option period. 7-10 days is the norm, and this allows you to get the home inspected, before you make a final commitment to purchase. November 17, less 10 days, is November 7.
4. 3rd party financing is required any time you are seeking to get a loan for a home. Typically, agents input about a 21 day loan approval process. This gives you 11 additional days after your option period expires to have the home appraised, and finalize your loan approval. November 7, less 11 days, is October 27.
5. Additional time for loan underwriting is also needed. To this point, we've allowed for 21 days for the option period and loan approval. However, time is still needed for the lender to obtain full underwriting approval, and fund the loan. Add in the new laws that a Buyer can't close for 3 days after full disclosure of the loan, and you can safely assume 10 days. Bringing total time to 31 days from execution to close. October 27, less 10 more days, is October 17.
6. To be on the safe side, many Buyer Agents will negotiate a full 45 days to close, allowing their client to close earlier if possible, but allowing for any problems along the way. Many times, a lender will require a document, or might have to make an adjustment to the disclosures, thus delaying the closing by the required 3 days. Lets just say that 40 days is sufficient. October 17, less 9 more days, puts you at an execution date of October 8.
7. So, as a Buyer, to have plenty of time to close on your home, you need to Execute your contract on October 8, end your option period on October 18, end your 3rd party financing on October 29, and be ready to close in approx. 2 1/2 weeks by November 17, funding by November 20, thus allowing you to enjoy your Thanksgiving week in peace with your family, knowing that in 2010 you will get up to an $8,000 credit on your taxes IF YOU Qualify.
8. Oh, don't forget. Today is September 17! That means you have only 21 days to get a good agent, and find your home! So, you need to get looking! To find a home quickly, you can call me at 817.706.9772.
LEARN ABOUT HOW TO QUALIFY FOR THE FIRST TIME BUYER CREDIT BY CLICKING HERE.
Although the $8,000 First-Time Buyer Credit runs through the end of November, Buyers need to be aware of the time it takes to close on a home. Let's move backwards on the calendar to help a Buyer find out the last date they need to execute a contract for the purchase of a home.
To close in time to qualify for the $8,000 Credit, Buyers need to execute the purchase contract by OCTOBER 8, 2009. Here is why...
1. You never want to close on the last day of a deadline, so Monday, November 30 is a bad day to try and close. Since it is the last day of the deadline, numerous buyers that wait to the last minute will be pushing to close on that day. As a result, lenders will be exceptionally busy and many closings will not make the deadline. You want to avoid this day at all costs.
2. Thanksgiving is on November 26, and typically businesses are closed on November 27, meaning November 25 becomes the absolute last day you would want to close on a home. But, funding can take some time, so to give you a few extra days, I suggest you back up to the week of November 16-20 as a closing week. Preferably no later than November 17. This way, if you close on November 17, and funding takes 3 days, you will beat the deadline and can enjoy Thanksgiving with your family, without the stress of closing.
3. With November 17 as an established closing day, now lets back track to find your execution date. When buying a home, you always want an option period. 7-10 days is the norm, and this allows you to get the home inspected, before you make a final commitment to purchase. November 17, less 10 days, is November 7.
4. 3rd party financing is required any time you are seeking to get a loan for a home. Typically, agents input about a 21 day loan approval process. This gives you 11 additional days after your option period expires to have the home appraised, and finalize your loan approval. November 7, less 11 days, is October 27.
5. Additional time for loan underwriting is also needed. To this point, we've allowed for 21 days for the option period and loan approval. However, time is still needed for the lender to obtain full underwriting approval, and fund the loan. Add in the new laws that a Buyer can't close for 3 days after full disclosure of the loan, and you can safely assume 10 days. Bringing total time to 31 days from execution to close. October 27, less 10 more days, is October 17.
6. To be on the safe side, many Buyer Agents will negotiate a full 45 days to close, allowing their client to close earlier if possible, but allowing for any problems along the way. Many times, a lender will require a document, or might have to make an adjustment to the disclosures, thus delaying the closing by the required 3 days. Lets just say that 40 days is sufficient. October 17, less 9 more days, puts you at an execution date of October 8.
7. So, as a Buyer, to have plenty of time to close on your home, you need to Execute your contract on October 8, end your option period on October 18, end your 3rd party financing on October 29, and be ready to close in approx. 2 1/2 weeks by November 17, funding by November 20, thus allowing you to enjoy your Thanksgiving week in peace with your family, knowing that in 2010 you will get up to an $8,000 credit on your taxes IF YOU Qualify.
8. Oh, don't forget. Today is September 17! That means you have only 21 days to get a good agent, and find your home! So, you need to get looking! To find a home quickly, you can call me at 817.706.9772.
LEARN ABOUT HOW TO QUALIFY FOR THE FIRST TIME BUYER CREDIT BY CLICKING HERE.
2009 FIRST TIME BUYER CREDIT
This blog is to help explain the facts on the $8,000 First-Time Homebuyer Credit program established in 2009.
In an effort to stimulate the economy and the housing market, Congress enacted the American Recovery and Reinvestment Act of 2009. This Act authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009, and before December 1, 2009. The previous $7,500 tax credit applies to all qualified first-time home buyers purchasing from April 9, 2008 to July 1, 2009 (new 2009 revisions are now in effect). Below are the aspects of this new Act.
First Time Homebuyer Only - The tax credit is for first-time homebuyers only. "First-time" is defined as a buyer (and spouse) who has not owned a principal residence during the three year period prior to the purchase. For example, if you plan to own on a home on November 17, 2009, you can qualify as a "first-time" homebuyer if you haven't owned a principal residence/home since Novemember 17, 2006.
Refundable Amount of Credit - The tax credit is equal to 10% of the home's purchase price and maxes out at $8,000. For example, a $50,000 home purchase price will qualify for a $5,000 credit (10% of $50,000). A home price of $200,000 or more will qualify for the max of $8,000 credit.
Repayment/Recapture - The 2009 $8,000 tax credit does NOT have to be repaid on any purchase on or after January 1, 2009, and before December 1, 2009, as long as you use the home as your principal residence for 3 years. Basically, when you file your 2009 taxes in 2010, you will receive a cash refund on your taxes of up to $8,000. Some restriction do apply, for example: if you sell your home within 3 years of purchase, you will have to repay the entire tax credit amount at closing. See IRS form 5405 for details on the exceptions.
To Learn more about the details of this program, and to see if you might qualify, Click Here.
In an effort to stimulate the economy and the housing market, Congress enacted the American Recovery and Reinvestment Act of 2009. This Act authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009, and before December 1, 2009. The previous $7,500 tax credit applies to all qualified first-time home buyers purchasing from April 9, 2008 to July 1, 2009 (new 2009 revisions are now in effect). Below are the aspects of this new Act.
First Time Homebuyer Only - The tax credit is for first-time homebuyers only. "First-time" is defined as a buyer (and spouse) who has not owned a principal residence during the three year period prior to the purchase. For example, if you plan to own on a home on November 17, 2009, you can qualify as a "first-time" homebuyer if you haven't owned a principal residence/home since Novemember 17, 2006.
Refundable Amount of Credit - The tax credit is equal to 10% of the home's purchase price and maxes out at $8,000. For example, a $50,000 home purchase price will qualify for a $5,000 credit (10% of $50,000). A home price of $200,000 or more will qualify for the max of $8,000 credit.
Repayment/Recapture - The 2009 $8,000 tax credit does NOT have to be repaid on any purchase on or after January 1, 2009, and before December 1, 2009, as long as you use the home as your principal residence for 3 years. Basically, when you file your 2009 taxes in 2010, you will receive a cash refund on your taxes of up to $8,000. Some restriction do apply, for example: if you sell your home within 3 years of purchase, you will have to repay the entire tax credit amount at closing. See IRS form 5405 for details on the exceptions.
To Learn more about the details of this program, and to see if you might qualify, Click Here.
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