Tomorrow is September first, which leaves less than three months until November 30th, the DEADLINE for closings to occur in order for first time homebuyers to qualify for the $8,000 tax credit.  Closings can take anywhere from 30 days to 90 days depending upon what you’re buying (bank owned properties often take longer)…so time is running out for you to find a home, complete a contract and close in time!

Who is eligible for the credit?  Any FIRST TIME homebuyer purchasing a new or existing home.  FIRST TIME is defined as ‘not having owned a PRINCIPAL (your main home where you live) residence within the three years prior’ to your new purchase.  If you own only a vacation home, YOU ARE ELIGIBLE.  If you sold your home and have not owned another since September 1st, 2006 YOU ARE ELIGIBLE.  Do note that married couples are treated as a single unit, so if your SPOUSE owned a principal residence within the past three years, you are NOT ELIGIBLE.  If you aren’t married but live together, either of you can claim the credit if neither of you have owned or if one of you has not owned that person can claim the credit.

How much is the credit?  The tax credit is 10% of the purchase price of the home, UP TO $8000.

What are the income limits?  $75,000 for a single filer, $150,000 for joint filers.

How does this credit work and do I have to pay it back?  Simply put, if you normally get a tax refund from the IRS, you can expect to get your homebuyer credit IN ADDITION to the amount of your usual refund.  If you don’t get a refund normally and don’t owe the IRS anything either, you’ll get a check for your full homebuyer credit.  If you usually owe the IRS money, your homebuyer credit will be applied to the amount you owe and you will get a check for the difference (or no check at all if what you owe is more than the credit).  And NO, you DO NOT have to pay this credit back!

You CANNOT purchase the home from a spouse or family member.  If you decide to go the FHA route, you MAY be able to use the credit as a downpayment/closing costs via a short term loan for the $8,000 that will be paid when you receive your credit.

But, TIME IS RUNNING OUT.  And if you’re planning on buying soon, why not buy NOW and get some FREE MONEY?  $8K can help you make some nice little improvements to the home you buy, purchase furniture, get new appliances, or pay down some of your debt.  Or go on that dream vacation!  Call me today, 570-351-6785 and we’ll start looking at homes in the Wayne/Pike/Lake Wallenpaupack area.  Don’t miss out!

EJ, Pike Wayne PA Real Estate

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