First time home buyer loans allow buyers to get into a house more easily. However, just because you’re buying first home doesn’t mean that you should use a first time home buyer loan. These programs have restrictions and strings attached. While they are a perfect fit for some, first time home buyer loans are the wrong choice for others. In addition to the mentioned loan programs, there are also available the first-time homebuyer tax credits.
And there’s happy news for the first-time homebuyers: those who have not owned a home in the last three years, can receive up to an $8,000 tax credit. How can you be qualified as a first-time homebuyer? As I said, for the purpose of this tax credit, a first-time homebuyer is defined as someone who has not owned a primary residence in the three-year period ending on the date of purchasing the home. Married couples are considered first-time buyers if neither spouse has owned a residence in the previous three years.
People who already own a home can qualify also for the tax credit if they buy another home. To qualify, individuals needs to have owned and lived in their residence for at least five consecutive years in the eight-year period that ends on the purchase date of the new property. Long-term residents purchasing a new home have a lower maximum credit of $6,500, or $3,250 for married couples filing separate returns.
Since there may be no future extensions, all qualified homebuyers better hurry to take advantage of the tax credit and have a written, binding contract by the end of April 2010 (the closing date being set for June 30, 2010).
For more details, you can watch also the following video:
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