Good Reasons to Buy a Home Part 4

Good Reasons to Buy a Home Part 4

Every day this week we are sharing with you good reasons why you should buy a home.

Today we are continuing to discuss the tax breaks associated with buying a home

6. Credit for first-time home buyers. If you purchased a primary residence after April 8, 2008, and before July 1, 2009, and are a "first-time" home buyer, you can qualify for a new tax credit for 10% of up to $75,000 of the purchase price. To be eligible, you must not have owned a residence in the U.S. in the previous three years. Nor can the credit be taken if your mortgage is funded with tax-free bonds that states and localities issue to give below-market mortgages.

The credit phases out between $150,000 and $170,000 of AGI for married couples and $75,000 to $95,000 for single filers. It is refundable to the extent it exceeds your regular tax liability -- which means that if the credit more than offsets your tax liability for the year, you'll get a refund check for the balance -- but does not offset the AMT. If you buy your home in the first five months of 2009, you can elect to take the credit on your 2008 income tax return.

Beware: This credit is more like an interest-free loan from Uncle Sam rather than a gift, because it will be recaptured ratably over 15 years. The recapture period starts two years after the year the credit is claimed. Thus, if you claim a $7,500 tax credit for a purchase in 2008, you will have to pay an extra $500 of income tax in 2010 and in subsequent years until you have repaid the full $7,500. If you sell the residence before the credit is fully repaid, the balance is due in the year of the sale. (If your profit on the sale is less than the unrecaptured credit, though, the amount due is limited to the amount of your profit.)

7. First-time home buyer tax credit of $8,000.  If you have not owned a home in the last 3 years, you can get paid $8,000 to purchase a home.  Unbelievable.  I am still astounded by this.

President Barack Obama signed the American Recovery and Reinvestment Act into law .  This stimulus package is enormous and has many facets.  I’d like to focus on just one aspect of this law: the first-time home buyer tax credit.

First-time home buyers who purchase a home between January 1, 2009 and November 30, 2009 will be eligible to receive up to an $8,000 tax credit.  This money does not have to be repaid.  The home must then be used as the buyer’s primary residence for the next 3 years (otherwise the tax credit does need to be repaid).

This is a great opportunity for first-time home buyers to buy a home.  Combine this with the current buyer’s market and low interest rate and this truly is one of the best times to buy.

At HOPE we help our client’s everyday in making wise decisions regarding their credit. If you would like to know more about how the HOPE program works please give us a call at 704-503-3669. We are waiting on your call.

Good Reasons to Buy a Home Part 3

Good Reasons to Buy a Home Part 3

Every day this week we are sharing with you good reasons why you should buy a home.

Today we are continuing to discuss the tax breaks for buying a home:

3. Real-estate taxes. You can deduct the local property taxes you pay each year, too. The amount may be shown on a form you receive from your lender, if you pay your taxes through an escrow account. If you pay them directly to the municipality, though, check your records or your checkbook registry.

In the year you purchase your residence, you probably reimbursed the seller for real estate taxes he or she had prepaid for time you actually owned the home. If so, that amount will be shown on your settlement sheet. Include this amount in your real-estate tax deduction. Note that you can't deduct payments into your escrow account as real-estate taxes. Your deposits are simply money put aside to cover future tax payments. You can deduct only the actual real-estate tax payments made from the account by your lender.

New for 2008: For the first time, homeowners who take the standard deduction instead of itemizing can deduct part of their property taxes. Joint filers can add in up to $1,000 of property taxes paid to the amounts shown above. Singles can add in up to $500 of real estate tax payments.

4. PMI premiums. Buyers who make a down payment of less than 20% of a home's cost usually get stuck paying premiums for private mortgage insurance (PMI), an extra fee that protects the lender if the borrower fails to repay the loan. For mortgages issued after 2006, PMI premiums can be deducted by home buyers.

At HOPE we help our client’s everyday in making wise decisions regarding their credit. If you would like to know more about how the HOPE program works please give us a call at 704-503-3669. We are looking forward to hearing from you.

Good Reasons to Buy a Home Part 2

Good Reasons to Buy a Home Part 2

This week we are sharing with you good reasons why you should buy a home.

There are tax breaks for buying a home!

Buying your first home is a huge step. When you leave the world of renting behind, you begin building equity in an investment. Uncle Sam is there to help ease the pain of high mortgage payments.

The deductions now available to you as a homeowner will reduce your tax bill substantially. If you have been claiming the standard deduction up until now, the extra write-offs from owning a home almost certainly will make you an itemizer. Suddenly, the state taxes you pay and your charitable gifts will earn you tax-saving deductions, too. Here are a few examples of tax breaks available to home owners:

1. Mortgage interest. For most people, the biggest tax break from owning a home comes from deducting mortgage interest. You can deduct interest on up to $1 million of debt used to acquire your home. Your lender will send you Form 1098 in January listing the mortgage interest you paid during the previous year. That is the amount you deduct on Schedule A. Be sure the 1098 includes any interest you paid from the date you closed on the home to the end of that month. This amount is listed on your settlement sheet for the home purchase. You can deduct it even if the lender does not include it on the Form 1098. If you are in the 25% tax bracket, deducting the interest basically means Uncle Sam is paying 25% of it for you. A $1,000 deduction will reduce your tax bill by $250.

2. Points. When you buy a house, you usually have to pay "points" to the lender to get your mortgage. This charge is usually expressed as a percentage of the loan amount. If the loan is secured by your home and the number of points you pay is typical for your area, the points are deductible as interest if you paid enough cash at closing -- via your down payment, for example -- to cover the points. For example, if you paid two points on a $300,000 mortgage -- $6,000 -- you can deduct the points as long as you put at least $6,000 into the deal. And, believe it or not, you get to deduct the points even if you persuaded the seller to pay them for you as part of the deal. The deductible amount should be shown on your 1098 form.

At HOPE we help our clients everyday in making wise decisions regarding their credit. If you would like to know more about how the HOPE program works please give us a call at 704-503-3669. We are waiting on your call.

Good Reasons to Buy a Home Part 1

Good Reasons to Buy a Home Part 1

If you're like most first-time home buyers you've probably listened to the advice of family, friends and co-workers, many of whom are encouraging you to buy a home. However, you may still wonder if buying a home is the right thing to do. Relax. Having reservations is normal. The more you know about why you should buy a home, the less scary the entire process will appear to you. This week we will be sharing with you some good reasons why you should buy a home.

1. Pride of Ownership

Pride of ownership is the number one reason why people yearn to own their home. It means you can paint the walls any color you desire, turn up the volume on your CD player, attach permanent fixtures and decorate your home according to your own taste. Home ownership gives you and your family a sense of stability and security. It's making an investment in your future.

2. Appreciation

Although real estate moves in cycles, sometimes up, sometimes down, over the years, real estate has consistently appreciated. The Office of Federal Housing Enterprise Oversight tracks the movements of single family home values across the country. Its House Price Index breaks down the changes by region and metropolitan area. Many people view their home investment as a hedge against inflation.

At HOPE we help our clients everyday in making wise decisions regarding their credit. If you would like to know more about how the HOPE program works please give us a call at 704-503-3669. We are waiting on your call.

Ways to Save Money Part 11

Today is the final day of our “Ways to Save Money” series.  We hope you have enjoyed it as much as we have.   Don’t forget, if you missed an article during the last 2 weeks you can access it by visiting the April 2009 Archives section of our website.  Please feel free to leave comments on our blogs as well.  We love to hear your feedback!

Tip #11:  Ask for Fees to be Waived!

Early in the week we recommended that you ask for any late fees that you may incur to be waived.  However, there are many other fees that you may be able to have waived as well. 

For example, a friend of mine recently booked a cruise through an online travel company.  She wanted to book through the travel company instead of the cruise line directly because the cost of the vacation was a little cheaper.  However, the travel company added some booking fees that the cruise line did not charge.  These fees would have wiped out her savings.  Therefore, she asked the travel company if the booking fees could be waived.  The sales representative did waive the fees for her and she would up saving an extra $90!

You can also try to request for fees to be waived when you sign up for new cell phone service, visit your doctor or dentist, open a new bank account, etc.  It never hurts to ask. 

If the company is unable to waive any of their fees then you can still go forward with your purchase if it is important.  Just remember, a little boldness could save you a lot of money. 

As we mentioned before, please feel free to forward your friends a link to our website if you have found this blog series helpful.  We will continue to add more informative blogs to our website in the weeks to come, so check back with us often.  Thank you again for visiting www.HOPE4USA.com.

Don’t forget, if you need professional assistance with credit problems, the HOPE4USA team can help you.  Just give us a call at 704-499-9696.