If you thought you’d missed out on the tax credit for homebuyers, you’re in luck. On November 6, 2009, President Obama signed into law an extension and expansion of the Homeownership and Business Assistance Act of 2009. The extension of the credit, along with GHCU’s highly competitive rates, local servicing and low fees and the reduced prices of homes in our area make this a perfect time to buy.

This new legislation includes three major changes that may impact your decision to buy a new home:

1. Potential homeowners who buy or enter into a binding contract to buy a principal residence on or before April 30, 2010 may qualify for the tax credit. (The purchase must close on or before June 30, 2010.)
2. For the first time, some current homeowners may qualify for up to $6,500 in tax credit for purchasing a replacement principal residence.
3. The income limit for eligibility for a tax credit has been raised to $125,000 (from $75,000) for single taxpayers and $225,000 (from $150,000) for married couples filing joint returns.

If you’re considering purchasing a new home, it’s still a buyer’s market out there. According to HousingTracker.net, Seattle-area home prices are down 10% from last year, while the number of homes available for purchase is up more than 11%. However, many analysts believe the housing market is beginning to stabilize in many parts of the country, so reduced home prices could begin rising soon.

Some things to consider about the tax credit and whether or not to buy:

• Qualified purchasers who purchase a new residence in 2010 can choose whether to apply the tax credit to their 2009 or 2010 taxes.
• As long as the home remains your principal residence for at least 36 months beginning with your purchase date, and you purchased your home in 2009 or will complete your purchase before the 2010 deadline, there is no requirement to pay back the credit.
• Taxpayers who have not owned a principal residence in the three years prior to the purchase of a new home are considered “first-time homebuyers” and may qualify for the credit of up to $8,000. Also, homeowners who have lived in their current home for at least five years of the last eight, and who purchase a replacement home after November 6, 2009, may qualify for the lesser tax credit of up to $6,500.

More information on the tax credit can be found on the IRS.gov website.

Remember: GHCU offers highly competitive rates, low fees and local servicing, so if you’re ready to buy a new home, let us help you find room to move!

Filed under: Financial News and You by admin