Because approvals, residential inspections, and other steps in the buying process typically take about 30 days, buyers hoping to take advantage of the incentive will need to have a contract by the end of October at the very latest. The new flurry of activity now as house-hunters try to meet the deadline is triggering bidding wars and energizing the property market, which historically is slow at the end of summer. As a result, more homes are getting their full asking price.
There is no repayment obligation required on this credit for qualified principal residences purchased from January 1, 2009 through November 30, 2009. To be exempt from repayment, the home buyer must stay in the home for at least three years. In addition to being a first time home buyer, there are maximum income restrictions.
Home Buyer Tax Credit in a Nutshell:
- The tax credit is for first-time home buyers only
- The tax credit does not have to be repaid
- The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000
- The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009
- Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit
- And if $8,000 dollars isn’t a big enough incentive mortgage rates remain historically low:
Rates as of Monday, October 5:
30 Yr Fixed – 4.625% (1 point)/ 4.875% (0 points)
15 Yr Fixed – 4.125% (1 point)/ 4.375% (0 points)
5 yr ARM- 3.875% (1 point)/ 3.625% (0 points)
7 yr ARM- 4% ( 1 point)/ 4.375% (0 points)
FHA – 4.75% (1 point)/ 5% (0 points)
Investment – 5.125% (1 point) / 5.5% (0 points) – 25% down payment required