Elmhurst real estate blog

Elmhurst & DuPage County Illinois

Thomas Makinney

Blog

Displaying blog entries 761-762 of 762

Extension and Expansion of the Homebuyer Tax Credit

by Thomas Makinney

You may have caught wind of the recent $8,000 Tax Credit Extension, but may be wondering what this entails and how it applies to you.  Even if you’re not a first time home buyer; keep reading!  There have been exciting additions in hopes of getting the nation’s housing market back on its feet!

Who Qualifies for the Tax Credit?

  • First-time home buyers who purchase homes before April 30, 2010.
    • Note:  To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
  • Current home owners who buy a home before April 30, 2010. 
    • Note:  You must have lived in the home being sold or vacated for five of the past eight years.

What type of Homes are Included?

  • Any of the Following: single-family homes, condos, townhomes, and co-ops.

What is the Tax Credit Amount?

  • $8,000 or 10% of the purchase price if less than $8,000 for first time home buyers.
  • $6,500 for current home owners
    • Note: Each home buyer’s tax credit is determined by:
      • The price of the home.
      • The buyer's income.

Is there a Price Limit on the Home I Can Buy?

  • Yes.  The tax credit only applies to homes under $800,000.

Are there Salary Limitations?

  • Yes.  These have been raised to incomes up to $125,000 for single buyers and up to $225,000 for married couples. 

What if My Salary Exceeds the Salary Limit: Can I Still Receive some Credit?

  • The full amount of the credit is available for individuals that make no more that $125,000 ($225,000 on a joint return). The credit phases out above those caps ($145,000 for singles and $245,000 for joint returns). This means if you make in between these amounts ($125,000 - $145,000 for individuals and $225,000 - $245,000 for joint filers), you can still qualify for a partial credit.

What if I am in Contract, but have not purchased the Home by April 30, 2010?

  • As long as you are in a written contract to buy the home, you will still be eligible.  However, you must close on the home before July, 2010 or you will not receive the credit.

Will I Need to Repay the Credit?

  • No!  If you buy a home and occupy the home for three years or more- you will not be required to repay the tax credit.  If you sell the property during this three year period, the full amount of the tax credit will be forfeited on the sale.

It may seem overwhelming to navigate through this process- I’m here to help with any questions you may have.  Don’t hesitate to call (630.567.5902) or email me to discuss in detail!

Should I Buy a Home Now?

by Thomas Makinney

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.

Displaying blog entries 761-762 of 762

Syndication

Categories

Archives