Homebuyer Tax Credit Video - Miami Real Estate 800-819-5466

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Buying a Home in Time to Get Credit - Miami Real Estate 800-819-5466

Miami Florida Real Estate Agent - Dean Isenberg - 800-819-5466

House hunting usually slows down this time of year, as people put their searches on hold during the holidays.

This winter could be different, however, thanks to the extension -- and expansion -- of the first-time home-buyer tax credit.

"We're going to see far more interest in the fourth quarter than we generally do because of the tax credit," says Heather Fernandez, vice president of Trulia.com, a real-estate search engine. Traffic surged on the site on Nov. 5, the day Congress approved the credit extension, she says.

The new law extends the tax credit for first-time home buyers and opens it up to some existing homeowners as well: The credit is now up to $8,000 for first-time buyers and up to $6,500 for repeat buyers.

All buyers must have a binding contract on a house in place on or before April 30. The purchase must be for a principal residence and must close on or before June 30.

To be considered a first-time home buyer, an individual must not have owned a home in the past three years. And to be eligible, existing homeowners need to have lived in the same principal residence for five consecutive years during the eight-year period that ends when the new home is purchased.

Income limits have risen as well. According to the Internal Revenue Service's Web site, www.irs.gov, the home-buyer tax credit phases out for individuals with modified adjusted gross incomes between $125,000 and $145,000, and between $225,000 and $245,000 for people filing joint returns.

The inclusion of move-up buyers might inspire homeowners to take action and list their house if they've been putting it off, says Carolyn Warren, a Seattle mortgage broker.

"If people love their home, it's not going to entice them to sell," Ms. Warren says. "If they've had it in the back of their minds and really would like to move up, it might push them into doing it sooner than later."

If you're thinking of purchasing a home, here are five tips:

Don't procrastinate
Start your house search now. Getting an early start will give you a better chance of finding the right house before the credit deadline.

When first-time buyers thought that the credit would expire Nov. 30, people scrambled to find properties in September and October, says Pat Lashinsky, chief executive of ZipRealty, a residential real-estate brokerage firm. In some cases, "there wasn't inventory that fit people's needs," he says. In some markets, including Phoenix, Chicago and parts of California, for example, properties had multiple bidders, Mr. Lashinsky adds.

Before you start house hunting, get preapproved for a mortgage, says Eddie Fadel, a Miami-based mortgage banker. And do a realistic assessment of what you can afford.

Buyers who have to sell an existing home should price it aggressively from the beginning to drum up interest and get a buyer as soon as possible, Ms. Fernandez says.

Don't count on another extension
The credit won't be available forever, Mr. Fadel says.

"This is a medication for the housing crisis," he says, "Once the patient -- which is the housing market -- is cured, there will be no medication needed."

Be mindful of interest rates
Interest rates are low right now, but will likely rise next year, Ms. Warren says. Higher rates will affect your monthly mortgage payments, thus the affordability of the house you are buying.

"It's pretty universally accepted that rates will be higher next year," she says. "What is unknown is how fast and by how much."

Average rates on 30-year fixed-rate mortgages have been hovering around 5%. But when the Federal Reserve stops buying large amounts of mortgage-backed securities next year, interest rates could rise, Ms. Warren points out. The Fed plans to end its purchase program in March.

Communicate with your lender
Make sure you're speaking with your lender regularly to avoid any delays. If the lender asks for any additional documentation, turn it in as soon as possible, says Doug Heddings, a New York-based real-estate agent with Charles Rutenberg Realty.

And think twice before pursuing a short sale. That's where someone sells a home for less than what he or she owes on a mortgage, with permission of the lender. The process can be lengthy and unpredictable because the homeowner's lender has to approve any deal, Ms. Warren says, and it can get complicated when there is a second mortgage associated with the property.

Don't take shortcuts
Don't forgo any of the steps you would normally take just to make the tax-credit deadline. That means making sure the house is a good fit and is in the right location and getting a home inspection, Mr. Lashinsky says. Skipping steps could cost you in the long run.

"Don't let the tax credit get you to make a decision to buy a house that you wouldn't otherwise want to buy," he says. "Don't shortcut the process to get the tax credit."

For more information regarding the above web Blog, please call Dean or Bonnie Isenberg at 305-936-2489 / 800-819-5466 or visit them on-line at A-Realtor.Com

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First-Time Home Buyer Tax Credit May Be Extended. Aventura Real Estate 800-819-5466

Aventura Real Estate - Miami Florida -

The current $8,000 tax credit for first-time home buyers is scheduled to end on November 30, 2009. An amendment to expand the tax credit, sponsored by Sen. Johnny Isakson of Georgia, is expected to be attached to a Senate bill extending unemployment compensation.

The new version would allow all home buyers -- not just first-time buyers -- who earn less than $150,000 as individuals and $300,000 as married couples to receive a tax credit up to $8,000. The cost of the new version of the tax credit is nearly $17 billion. The new tax credit would run through June 30, 2010.

However, shortly before we went to press, Secretary of Housing and Urban Development Shaun Donovan told the Senate Banking Committee that the White House hadn't make a decision about extending the tax credit and was looking at the costs.

In the meantime, home buyers continue to ask a lot of questions about how to apply the current tax credit.

Q: My daughter, who is a U.S. citizen, has lived in a foreign country for the past 23 years. So one could say her primary residence is not in the U.S. She and her husband recently purchased a home in the U.S. that will be used as a rental property. Will she be able to claim the first time home buyer tax credit?

A: Unfortunately, the $8,000 first-time home buyer tax credit (in its current incarnation) is only available for individuals who have not owned a home during the last three years and intend on using the purchased home as a primary residence.

Since your daughter intends on using the home as a rental, it will not qualify for the tax credit.

By the way, although the $8,000 tax credit has not yet been extended beyond its current sunset date of November 30, the new version being proposed does not provide a tax credit for investment property. It is only for those who are buying a home to live in.

Q: The closing on my house will occur at the end of October or the beginning of November. I should be eligible for the $8,000 first-time home buyer tax credit.

But here's the wrinkle: I will be inheriting a house in November when my father's estate comes out of probate. Will that make me ineligible for the $8,000 first-time home buyer tax credit? I plan to live in the house that I am purchasing.

A: The rules relating to the $8,000 first-time home buyer tax credit require you to be a first-time home buyer by the date of the closing. If you close on your home at the end of October and at that time qualify for the tax credit, you shouldn't have to worry about whether you're inheriting a house the following month. You need only comply with the other requirements.

To qualify for the tax credit, you must not have owned a home during the three years prior to the closing. You must live in the home you buy for three years and must use it as your primary residence.

Your modified adjusted gross income may not exceed $75,000 for single people and $150,000 for married couples. Above those numbers, the tax credit phases out. (Your adjusted gross income is basically what you would see at the bottom of the first page of your federal income tax return.)

To get the full benefit of the $8,000 first-time home buyer tax credit, the sales price of the home must be at least $80,000. The tax credit equals 10 percent of the purchase price of the home, up to a maximum of $8,000.

Most importantly, you must close on the purchase of your new primary residence no later than November 30, 2009.

There are other rules that provide that the home must be located in the United States. Non-resident aliens are ineligible to obtain the $8,000 first-time home buyer tax credit, and you can't buy the home from a close relative.

In answer to your question, if you inherit the home after you close on your primary residence, you should still be entitled to keep the tax credit as long as you live in the home you purchased for at least three years.

For more information regarding the above web Blog, please call Dean or Bonnie Isenberg at 305-936-2489 / 800-819-5466 or visit them on-line at A-Realtor.Com

Click Here To E-Mail The “I-Team”

Click Here To Request More Information About The Above Web Blog

South Florida Real Estate Information

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