by Gloria Edmonson Nelson

Created on: December 17, 2009   Last Updated: December 19, 2009

This is the best time for First Time Homebuyers to purchase a home because the President on November 9, 2009, signed a Bill to give First Time Homebuyers a tax credit of $8,000. This Program ends on June 30, 2010. Another reason for taking advantage of this is because home rates have hit "rock-bottom," interest rates are at an all-time low, and the down payment is zero to 3.5%.

QUALIFICATIONS:

1) The home must cost at least $80,000. Although there is no limit; First Time Buyers should make sure that they can afford the mortgage. Many people have lost their primary residences because they borrowed on the home; however, they were not aware that a family member would lose the job or the wife would become pregnant. Do keep the mortgage payments low so it can be paid on one person's salary. 

2) Income for an individual should be $125,000 adjusted gross and $225,000 for couples.

3) You cannot sell the home within three years, otherwise, you have to pay back the $8,000 credit; however, you are free to sell it after three years without a penalty.

4) Credit applies to First Time buyers who have not owned a principal residence in the past three years; however, two unmarried home buyers may allocate credit to any buyer who qualifies as a First Time Homebuyer. For example, if parents purchase a home for a son or daughter.

5) The Purchase Contract must be signed by April 30, 2010, for closing by June 30, 2010.

6) Those interested in buying for the first time cannot purchase a home from a relative (even the spouse's ancestors).

7) You can claim credit on your 2009 tax return by filing IRS Form 5405 Amendment after closing the home.

8) The buyers will receive a check for $8,000 within four to six weeks. (Buyers should consult with a tax professional for more advice).

9) You should always request a Realtor who specializes in First Time Homebuyers.

1) Request a Pre-screening first so that you are aware of any potential credit problems or "glitches" that might be on your credit profile. The mininum credit score to be qualified is 620.l  

Because the real estate market is gradually coming back, this is a great time for First Time Homebuyers because homes will not last at the 5% interest rate for too long. Many people are buying again, even those who are existing homeowners. It is recommended that First Time Homebuyers should look for residences that are zero to 5% down.

REFERENCES:

Firstthomebuyer.net/8,000-tax-credit-first-time-home -buyer.htm

Learn more about this author, Gloria Edmonson Nelson.
Click here to send this author comments or questions.