Congress passed an expanded version of the $8,000 first time home buyer tax credit that was set to expire on November 30. This expanded version will likely stimulate the housing market more than the old version will.
Not only does this recently passed credit still includes $8,000 credit to first time buyers, but includes a $6,500 tax credit for home buyers that have lived in their current primary residence for at least five consecutive years out of the past eight years.
Tax credit applies to homes purchased for less than $800,000 before May 1, 2010. If you sign a contract before May 1st, you need to close before July 1, 2010.
There is an income limitation for single tax payers went up from $75,000 under the old version to $125,000 for the new version. Married tax payers income limit is $225,000, an increase of $75,000.
Example 1: Jane purchased a home in 2002, lived there for 5 years as her primary home, moved out in 2007, and turned that home into a rental property. If Jane decides to buy a new primary residence today, she would qualify for the $6,500 tax credit based on the fact that she lived in the same residence as her primary home for at least five consecutive years out of the past eight.
Example 2: Nicole purchased a home in 2006, and lived there for the past 3 years as her primary home. If Nicole decides to buy a new primary residence today, she would not qualify for the $6,500 tax credit based on the fact that she did not live in the same residence as her primary home for at least five consecutive years out of the past eight.
Biggest thing I see is a home buyer who thinks they know what they are doing, even if you have bought a dozen homes, you are probably not in the ‘market’ every day. It would be similar to getting on a medical site or a ‘how to carpenter’ site, the problem here is I am not trained as a doctor or a carpenter. I may have built a deck or repaired a sink, but sometimes projects get a bit too complicated. Look to an expert for help.
Number one – Look to an Expert
An experienced agent handles many transactions in many different ways, there is little an experienced agent hasn’t heard or experienced. If you have something on your mind or something you want to hide, ask it and tell it. Your agent will probably have a better plan or better way to help because they have seen it before. No two transactions are the same, but an experienced agent has the knowledge of previous transactions to help you in yours.
Two – Changing Your Credit
Lenders lend money based on credit scores, income and the ratio it provides. Ratios are key. For sake of easy math let’s use a word problem to explain, if you make $100,000 a year and have expenses of 35,000 you have a debt to income ratio of 35%. If you add on a debt (car purchase) before obtaining a loan you could exceed the maxim amount of debt to income a lender will allow. The moral of the story is, don’t make large purchases on credit prior to obtaining a loan.
Three – Buying a House You Shouldn’t Have
When you hire an expert agent you will most likely go over your wants and needs in a home. By doing so you will narrow down your search and ultimately purchase of a home that matches your needs and desires. Do you need 2 bathrooms or 5? If you have 1 child probably 2 will be fine. If you have a family of 8, you might need a few extra bathrooms. Make sure the home you purchase matches your finances first, your needs second and your emotions last.
Moxley Team serves Pleasanton Home Buyers and Pleasanton Home Sellers. From Dublin Ranch Condos to Dublin Ranch Luxury Homes the Moxley Team of Alain Pinel in Pleasanton provides Home Buying Tools and Home Selling Tips. MoxleyTeam.com provides info from Pleasanton Home Sales to Dublin Ranch Developments, Dublin Ranch News and Foreclosures in Pleasanton and Short Sales in Dublin Ranch.
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