There is a lot of confusion about the home buyer's credit that the federal government is offering. The following are some commonly asked questions to help you take advantage of these great deals. There is no guarantee the government will extend these again, and most experts expect that they won't be.
What Home Buyer Credits are available?
1). The first time home buyer credit is available for buyers who have not owned a home for over 3 years.
2) Current Homeowners can receive a credit when they purchase a new home if they have lived in their current home for at least 5 of the last 8 years.
How Much Are These Credits?
The first time buyer credit is for 10% of the sales price not to exceed $8,000.
The current homeowner can receive up to $6,500.
When Do These Credits Expire?
You must have an accepted offer in place by April 30, 2010 and close on the property by July 1,2010.
How Do I Get The Credits?
The credits are given to you through your tax returns. They will either lower what you owe on your return or increase the amount you will get back in a refund. In an effort to reduce fraud of the system, to get the credits you must attach a copy of your purchase agreement to your tax return. Contact your tax preparer for details.
Can I Use the Tax Credits To Help With The Purchase of My New Home?
In some cases you may be able to use the credits for some of your purchase expenses -- check with any programs your lender may have. But remember, if you do use the credits for the purchase, the seller wants their money at closing so you will have to borrow the credit amount to close on the property. Then you must repay that loan with interest when your credit comes through. Many Michigan lenders do not have programs that provide this option.
To sum it up, if you are looking to buy a home you would have to be a fool not to take advantage of the free money the government is offering. It's up to you when you receive your credit: Fix up your home, buy furniture, take a trip or whatever.