First time home buyer? Now's the time to make your move
SEATTLE -- If you're looking to buy your first home, now could be the time to make your move.
Mortgage rates are at record lows. Sellers are dropping their asking prices -- and a special tax credit can really sweeten the deal.
When members of Congress passed the stimulus bill in February, they included a federal tax credit of up to $8,000 for first-time home buyers. For many buyers, that credit can essentially take care of your down payment.
When first-time buyer Alexandra LaFontaine tried to buy a home 2 years ago, she got discouraged and gave up. Prices were too high. Competition made it even worse.
But this time around she's excited. She's finding a lot more options within her budget.
"I do feel right now you get a much better value for your money than you did a couple years ago, and there's a tax incentive on top of it," she said.
The tax incentive means once Alexandra buys a home, she'll get an $8,000 refund from the IRS when she files her federal taxes.
With a down payment requirement of only 3.5%, Alexandra says it's like getting her down payment for free.
"It'll really help me. My down payment that I'll have to put down for one of the homes I'll be buying is 'gonna be my tax return, so it's almost like zero balance on that," she said.
Some lenders will even give you the refund up front, so you don't have to wait.
The credit is only available to buyers who have not owned a home in the last 3 years. The maximum income for single buyers is $75,000. The maximum income for married couples is $150,000. The home must be your primary residence and the credit must be repaid if you sell the home within 3 years.
With more first time buyers taking advantage of this buyer's market, it's best to have your financing ready to go -- especially since many banks are still making it tough to get a loan.
"It helped me to be with a bank that can say, 'Here's what you should be looking at and here's what you can afford and this is what you can expect in terms of payments every month.' And for me its basically what I'm paying in rent right now," said Alexandra.
Windermere Real Estate Agent Jeremy Johnson says whether its your first home or your third, if you're serious about buying, you must be prepared with financing.
"People generally come to us not being prepared, but we try to not start the search until they are ready, qualified, have all their documents in to the lenders," explained Johnson.
Agents stay the tax credit for first time buyers is helping to stimulate the entire housing market.
"If Alex were to buy this place, these guys would be able to move on to their new house wherever it is, and where they're moving, either the builder's going to be able to get that house off the inventory and clear his books, or maybe the seller they're buying from can move on to the next place," Johnson said. "Everybody's freed up to move on to the next chapter in their life."
For more information:
First-Time Homebuyer Credit
Frequently Asked Questions About the Home Buyer Tax Credit
Mortgage rates are at record lows. Sellers are dropping their asking prices -- and a special tax credit can really sweeten the deal.
When members of Congress passed the stimulus bill in February, they included a federal tax credit of up to $8,000 for first-time home buyers. For many buyers, that credit can essentially take care of your down payment.
When first-time buyer Alexandra LaFontaine tried to buy a home 2 years ago, she got discouraged and gave up. Prices were too high. Competition made it even worse.
But this time around she's excited. She's finding a lot more options within her budget.
"I do feel right now you get a much better value for your money than you did a couple years ago, and there's a tax incentive on top of it," she said.
The tax incentive means once Alexandra buys a home, she'll get an $8,000 refund from the IRS when she files her federal taxes.
With a down payment requirement of only 3.5%, Alexandra says it's like getting her down payment for free.
"It'll really help me. My down payment that I'll have to put down for one of the homes I'll be buying is 'gonna be my tax return, so it's almost like zero balance on that," she said.
Some lenders will even give you the refund up front, so you don't have to wait.
The credit is only available to buyers who have not owned a home in the last 3 years. The maximum income for single buyers is $75,000. The maximum income for married couples is $150,000. The home must be your primary residence and the credit must be repaid if you sell the home within 3 years.
With more first time buyers taking advantage of this buyer's market, it's best to have your financing ready to go -- especially since many banks are still making it tough to get a loan.
"It helped me to be with a bank that can say, 'Here's what you should be looking at and here's what you can afford and this is what you can expect in terms of payments every month.' And for me its basically what I'm paying in rent right now," said Alexandra.
Windermere Real Estate Agent Jeremy Johnson says whether its your first home or your third, if you're serious about buying, you must be prepared with financing.
"People generally come to us not being prepared, but we try to not start the search until they are ready, qualified, have all their documents in to the lenders," explained Johnson.
Agents stay the tax credit for first time buyers is helping to stimulate the entire housing market.
"If Alex were to buy this place, these guys would be able to move on to their new house wherever it is, and where they're moving, either the builder's going to be able to get that house off the inventory and clear his books, or maybe the seller they're buying from can move on to the next place," Johnson said. "Everybody's freed up to move on to the next chapter in their life."
For more information:
First-Time Homebuyer Credit
Frequently Asked Questions About the Home Buyer Tax Credit