Posts Tagged ‘tax credit’

First-time Home Buyers Still have Options

May 13, 2010

The home buyer’s tax credit program has ended.  While many were able to take advantage of the savings; we also know that many more did not.  Perhaps the timing of the program didn’t fit with your current financial picture.  Do you feel left out and like the opportunity to buy your dream home is gone for good?  While this particular program may be over, what if something else existed to help?  Wouldn’t you want to know?  Fortunately one does!

The Mortgage Credit Certificate (MCC) program is a Federal tax credit on the mortgage interest you pay on your home loan over a calendar year.  It effectively reduces the annual interest rate on your loan. 

This is not a limited life program or something offered for just a set period of time.  The MCC credit remains in effect for as long as your home continues to be your primary residence and the original mortgage loan remains in place.  Only if you refinance your home loan, sell your home or purchase a second home that becomes your primary residence, will the credit end.  Plus in select targeted areas you do not need to be a first-time home buyer to qualify.

Unfortunately this program is not offered in all states.  In the 5 states we currently do business only Michigan and Indiana offer the MCC program.  (This would be a great question to ask your state senators and representatives about if your state does not offer this program.)  Even more amazing though is that not all lenders participate in this program.  Awareness Home Funding does and will continue to do so for every state we conduct business in when available.   

If you are looking to purchase a home, now or in the future, ask us about the MCC program.  We are very familiar with how the program works and more importantly, how it can work for you.

Advertisements

No Time like the Present

March 1, 2010

There are many things in life where timing matters.  In order to gain the benefits involved, we need to take action within a specific timeframe or the opportunity is gone.   You could be the one who finds out a little too late that you missed the opportunity to recoup some significant money.  The offer referred to here is the Home Buyer’s Tax Credit, and the amount of savings involved could be as much as $8,000.  If you are thinking of buying a new home this spring, your opportunity to act is now

This incentive program has been making headlines and front stories for some time, but perhaps you still wonder if this applies to you.  When the federal government extended the program last fall, they also expanded the criteria to qualify making this a widespread opportunity.  The general guidelines contain two parts: first-time homebuyers and existing homebuyers. 

First-time homebuyers have been traditionally defined as those who have not owned a home in the past three years.  For these buyers, you may be eligible for a tax credit of 10% of the purchase price of your newly acquired home, up to $8,000.  (Consult with a tax professional for specific details on meeting this program’s qualifying criteria.)

One of the most significant additions to the Home Buyer’s Tax Credit program was to extend the credit to existing homeowners.  The general criteria are that you must have lived in the same home as your primary residence for any 5 consecutive years out of the past 8 years.  Existing homeowners purchasing a new primary residence home may also be eligible for a credit of 10% of the purchase price, up to $6,500.  (Again, consult your tax advisor for the exact qualifications of the program.)

The crucial point is to act now.  This program ends April 30, 2010.  Your purchase agreement must be fully executed by both buyer and seller by this date to qualify.  Take the first step to get pre-approved for a home loan by calling 866-982-9273.  We also have a secure on-line application on our website to get you started.  This is one event where being a split second off the timing means the difference between a nice rebate and nothing at all.

The Other Side of the Coin

February 2, 2010

As your parents most likely told you growing up, there are two sides to every coin; and therefore two sides to every story.  On one side we have the home buyer’s tax credit with up to $8,000 available for first-time home buyers and up to $6,500 available for existing home owners.  This has been a great program that has helped many buyers.  Some of our clients have used this to essentially recoup their closing costs.  Others have used this to update or furnish their new homes.  However they are choosing to use the credit, there is money coming their way.

So, what’s the catch?  The other side of this coin is what it takes to actually receive the tax credit.  In mid-January, the Internal Revenue Service released the new Form 5405 for the credit that needs to be included with the buyer’s return.  Along with the form, buyers also need to include proof of residency, the signed HUD-1 statement from the closing, and a copy of their driver’s license.  “Great!” you say.  Not a problem.  However there is one little catch.  Because of this extra documentation, filing electronically will not work – the IRS e-file system is not equipped to handle these pieces.  That means taxpayers with these claims must file a paper return and that means filing via mail.  Filing by mail means it will take time.  For your 2009 taxes this can mean up to 8 weeks for the refund, up to 16 weeks for an amended 2008 return.

 Why the extra hoops here?  The short story is the IRS is requiring more documentation to stop those individuals who have already taken advantage of a good thing and cheated the program.  So now, you need to prove you purchased a home and that this is indeed your home.  Bottom line, the credit is available and a significant value, just don’t spend it before you have it.  Your parents probably told you that one too.

For more information, click here for a link to instructions for Form 5405.