The New Tax Benefit Of Buying A Home

If you are ready to purchase your FHA backed home mortgage, now may be a great time. In the recent Bill to pass Congress, the American Recovery and Reinvestment Bill, Congress has put into place a substantial benefit to individuals who purchase a home this year. Those who are ready to buy will find that this benefit is sizable and lucrative, making it an ideal time to buy.

What Do You Get

The stimulus bill gives individuals who purchase a home in 2009 a sizable tax break. The Senate’s version of the bill called for much more than actually passed, but for first time homebuyers, this new benefit is still very enticing. For those who purchase a property in 2009, a onetime $8000 tax credit will be available to them. This tax credit does not have to be repaid as similar opportunities in previous years have required. Rather, as long as you make under $75,000 as an individual or $150,000 jointly, you will qualify for this tax break.

Anyone that has not owned a home in the last three years is technically qualified as a first time homebuyer. This means that millions of people may have these funds available to them currently. This particular element in the stimulus bill costs $6.63 billion, but may be well worth it for several reasons.

#1: It gives individuals more of a benefit to purchase a home even if they thought now was not the time. For example, if you were unsure if the bottom of the market had hit, and you wanted to get the best deal available, buying in 2009 is likely to be a good opportunity to save money in the form of a tax credit.

#2: It helps to clean up some of the inventory that is sitting open on the real estate market right now. This will help to boost the property values of homes in the neighborhoods. In addition, it allows cities to get back some of their property tax dollars they have lost. Many cities throughout the country are cutting jobs and services because they do not have the property tax income they need to pay for such services. Getting people back into those homes may be particularly beneficial to the cities.

#3: Those who may have needed that extra reassurance that now is the right time to buy a home can get it. Credit standards are still tight, but with this added benefit, more people will see that now is a great time to own property.

What To Keep In Mind

One of the problems with tax breaks like this is that people often think of it as free money. It is important to note that while you do not have to pay this money back, you still have to qualify for the mortgage to obtain the house in the first place. It is highly recommended that you have some money to put down to buy the home and have a good or better credit score. With these qualifications, you may be able to obtain a home loan through FHA.

Do not overlook the benefits of FHA loans. These loans can sweeten the deal even more so by giving you an added benefit of a low interest rate on the home you buy. You will pay less tax and you will pay less in terms of interest over the lifetime of your loan.

To find out if you qualify for an FHA loan, contact an FHA loan specialist. Ask them about how this tax break can help you to save money while buying a home.

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