Free Money From Uncle Sam

The $8,000 First Time Home Buyer Tax Credit got better. Now you can take the credit from your 2008 taxes instead of waiting to file your 2009 tax return in 2010.

The $8,000 tax credit from the federal government is a great incentive to buy a home these days. It has had a very positive effect on the home sales market as more buyers are looking to take advantage of this free help from Uncle Sam.

To reiterate, the credit is a gift from HUD to help first time home buyers with the down payment and closing costs for FHA insured homes. To qualify, the buyer must not have owned a home in the last three years and must buy and close on the home by December 31, 2009. To access the money now instead of waiting for 2010 he/she would need to file an amended 2008 return. While this is better than waiting for next year it will still take time to file and receive the money from IRS.

HUD went one step further and allowed FHA lenders to provide the buyer with a bridge loan in the amount of the credit until a return can be filed and collected on.

This incentive from our government is one that should be taken as soon as possible. We have helped many young families and single first time home buyers take advantage of this credit but there is no guarantee it will be around forever.

Already we are hearing a rumor HUD is considering rescinding the credit.

Too many homes for sale on the street. Are any boarded up? Always keep an eye on the other houses near the one that you may purchase. They will tell you a lot about your possible future investment.

• Outdoor maintenance is often very telling of what is going on “underneath”. If the home you are looking at has straggly foundation plants or broken gutters, what else could be wrong?
• Foundation damage is always a major consideration. Check for proper grading and cracks bigger than 1/3 of an inch. Many times this can mean major structural issues.
• Strong odors outside and inside almost always indicate something “bad”. Investigate further.
• Be on the lookout for flickering lights and always check face plates for heat. This could mean faulty wiring.
• Windows with fog or water in between double-paned windows can signify trouble lurking.
• Stains and/or saggy walls usually indicate water damage, mildew or mold. An inspector must check for leaks and mold.
• Keep your eyes peeled during your tour for pests and rodents. Seeing evidence at this early stage is never a positive sign.

An alternative is houses that are being sold on a short sale. Due to the nature of this type of sale the owner is motivated to keep the house in great condition. You can often find a true bargain and a gem to boot in this situation.

Gift of money for home buyers

Canton and Plymouth, Michigan home buyers recently learned the $7,500 tax credit can now be a tax free gift and is extended to other buyers as well as first timers.

Originally the bill was passed last summer, as a part of the Housing Recovery Act, to encourage first-time home buyers to purchase homes within a certain amount of time, hoping to boost the housing market. That legislation required that the $7,500  tax credit be repaid over 15 years, making it more of a no-interest loan. The stimulus bill now under consideration would make that tax credit a true credit that doesn’t need to be repaid at all! Additionally the rules for  who qualifies have been greatly relaxed.

The news is spreading fast among the Canton, MI home buying community. The combination of this money incentive and great house values from short sale houses is prompting people to spring into action!

To be eligible, buyers cannot have owned a home for the past three years, and the new home has to be used as a primary residence. The credit slowly phases out if income rises above $75,000 for singles and $150,000 for couples. It disappears entirely at $95,000 for singles and $170,000 for couples. To apply for this credit, you must claim in on your 2009 tax return. It is that easy! As long as buyers do not sell for at least 36 months, they keep the $7,500. The credit is also refundable, meaning if your total tax bill came to $4,000 you can still qualify for a full $7,500 refund!

Timing is also critical. The current proposed bill requires that you must have purchased the home between April 9, 2008 and July 21, 2009. Newer proposals have that date stretch out to August 2009. The point is take advantage of this gift before you forget about it and it disappears!

The Bittinger Team is optimistic that the Stimulus

 Bill and other financial incentives are creating

the best home buying opportunities in months.

The Bittinger Team

When Trust and Experience Matter!

(734)-459-2600

Bittinger Team - Short Sale Experts

Many Canton and Plymouth Michigan home buyers were hesitant to buy a home right away, thinking that home values were still declining and that if they waited they would get a better deal. But the truth is, there are many reasons why NOW is the time to buy a house.  With the passing of the Economic Recovery Act of 2008 and it’s generous tax credit, the Down Payment Assistance Program being terminated in October of this year and the fact that research shows an increase in home value already touching parts of America- now is clearly the time to get into your dream home! Canton, Michigan home buyers and home sellers know the benefits of the following real estate secrets…

The passing of the Economic Recovery Act of 2008 (HR 3221) the government will give first time home buyers (or someone who hasn’t owned a home for three years) up to a $7,500 tax credit.  This is an excellent new benefit that will help Canton, MI residents and fellow Americans get into their new home.

Secondly, President Bush recently passed a bill that abolishes the Down Payment Assistance Program effective October 1st, 2008. The Down Payment Assistance Program (also known as "Zero Down") allows you to purchase a home with a FHA insured loan and have the seller pay your down payment.

For a short few months, you can take advantage of both the generous tax credit as well as the Zero Down program! If you are serious about finding a real bargain in real estate, getting your family into your dream home while still having the benefits that are still available- now is the time to make your home purchase.

Still not convinced? Well, there is some exciting news about an increase in home value already starting to touch some American cities. Some speculate that the crashing of home prices have hit near bottom and will start to finally increase steadily in the next year or so. Some cities have had three consecutive months of positive returns. These two markets are also showing the smallest annual declines. To keep yourself up to date  Standard & Poor’s/Case-Shiller Home Price Indices accurately track the price path of typical single-family homes located in each metropolitan area provided. Each index combines matched price pairs for thousands of individual houses from the available universe of arms-length data.. The S&P/Case-Shiller Home Price Indices are published on the last Tuesday of each month at 9:00am ET.  The S&P/Case-Shiller National U.S. Home Price Index tracks the value of single-family housing within the United States. The index is a composite of single-family home price indices for the nine U.S. Census divisions and is calculated quarterly.

So, not only is now a great time to buy a home, many Canton and Plymouth Michigan families and investors are reconsidering flipping houses. They have also gotten back in the game by doing home searching on the Internet and finding all of the great deals that are still out there.  One excellent example of the great deals available comes from The Bittinger Team.

See how Southeastern Michigan benefits

from The Bittinger Team’s expertise in real estate!

 

 We would love to hear your comments!

• The $7,500 tax credit is available for first-time home buyers only.
• The law defines a first-time home buyer as a buyer who has not owned a home during the past three years.
• All U.S. citizens who file taxes are eligible to participate in the program.

• Home buyers who file as single or head-of-household taxpayers can claim the full $7,500 credit if their adjusted gross income (AGI) is less than $75,000.
• For married couples filing a joint return, the income limit doubles to $150,000.
• Single or head-of-household taxpayers who earn between $75,000 and $95,000 are eligible to receive a partial first-time home buyer tax credit.
• Married couples who earn between $150,000 and $170,000 are eligible to receive a partial first-time home buyer tax credit.
• The credit is not available for single taxpayers whose AGI is greater than $95,000 and married couples with an AGI that exceeds $170,000.

• First-time home buyers would receive a $7,500 tax credit for the purchase of any home on or after April 9, 2008 and before July 1, 2009. To qualify, you must actually close on the sale of the home during this period.

• A refundable credit means that if you pay less than $7,500 in federal income taxes, then the government will write you a check for the difference.
• For example, if you owe $5,000 in federal income taxes, you would pay nothing to the IRS and receive a $2,500 payment from the government.
• If you are due to receive a $1,000 tax refund from the government, your refund would grow to $8,750 ($1,000 plus $7,500 from the home buyer tax credit).
• Buyers can take the tax credit in their 2008 or 2009 tax return.
• If you purchased the home in 2008, the tax credit is taken on your 2008 tax return. If you buy in 2009, you have the option of taking the credit on your 2008 or 2009 tax returns.

• All homes, whether single-family, townhomes or condominium apartments will qualify, provided that the home will be used as a principal residence and the buyer has not owned a home in the prior three years. This also includes newly-constructed homes.

• The tax credit essentially serves as an interest-free loan to be repaid over 15 years.
• For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. However, the buyer doesn’t have to start repaying the credit until two years after the tax year in which the credit is claimed.
• If the home owner sold the home, then the remaining credit would be due from the profit of the home sale.
• If there was insufficient profit, then the remaining credit payback would be forgiven.