*frank@hawaiihome.biz* | Hawaii Real Estate | MLS Search | 808.723.0900
Posts tagged first time home buyer
House Extends Deadline to Sept. for Homebuyer Tax Credit
Jun 30th
House Approves Homebuyer Tax Credit Extension
Today the House voted 409-5 to extend the deadline for closing home purchases to Sept. 30. The program initially required borrowers who signed contracts before April 30 to complete paperwork by July 1 to get a tax credit of as much as $8,000.
The House measure accommodates borrowers at risk of being disqualified for the tax credit because lenders and loan servicers aren’t processing mortgages quickly enough. The Senate is considering similar legislation.
NAR (National Association of Realtors,) estimates the number of homebuyers who have qualified for the tax credit and met the contract deadline of April 30, but who would not be able to close their transaction by the June 30 deadline, could go as high as 180,000. REALTORS® have reported as many as one-third of qualified applicants have been notified by lenders that their mortgages will not close before June 30 due to the sheer volume of applications in the pipeline.
The Mortgage Bankers Association reported that average contract interest rate for 30-year fixed-rate mortgages decreased to 4.67 percent from 4.75 percent, with points decreasing to 0.96 from 1.07 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. This is the lowest 30-year contract rate recorded in the survey since the week ending April 24, 2009. The effective rate also decreased from last week.
First-Time Homebuyer Credit: Military and Certain Other Federal Employees
May 1st
Hawaii First Time Homebuyer Credit for Military Extended to 2011
There are new benefits for members of the military and certain other federal employees:
- Members of the military and certain other federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit. Thus, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2011. If a binding contract is entered into by that date, the taxpayer has until June 30, 2011, to close on the purchase. Members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.
- In many cases, the credit repayment (recapture) requirement is waived for members of the uniformed services, members of the Foreign Service and employees of the intelligence community. This relief applies where a home is sold or stops being the taxpayer’s principal residence after Dec. 31, 2008, in connection with government orders received by the individual (or the individual’s spouse) for qualified official extended duty service. The credit is still allowable even if this happens during the year of purchase. Qualified official extended duty is any period of extended duty while serving at a place of duty at least 50 miles away from the taxpayer’s principal residence (whether inside or outside the U.S.) or while residing under government orders in government quarters. Extended duty is defined as any period of duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period.
Question and Answer
Q. Are both spouses required to be overseas for the requisite time period in order to qualify for the 2011 extension to claim the credit?
A. Only one spouse must be overseas on official extended duty for the requisite amount of time for either spouse to be eligible for the 2011 extension of time to purchase a principal residence and claim the credit.
3 Steps for Hawaii First Time Home Buyers
Apr 8th
How to Get the First-Time Home Buyer Tax Credit
Buying your first home is a significant, long-term investment representing many important aspects of our lives, as well as providing financial and emotional security. It is also the largest single transaction most people ever make. That’s why it’s so important to choose a home and a mortgage that are well suited to your needs. You need a top-notch agent there to guide you. Once you’ve decided to buy your first home, pursue it and make your dreams possible.
You’ve decided to purchase a home and take advantage of the Extended Home Buyer Tax Credit. Here’s what you have to do to get your benefit:
- Close on your home purchase between November 7, 2009 and April 30, 2010, or have a binding written contract in place by April 30, 2010 with a closing date no later than June 30, 2010.
- Decide whether to:
- apply the credit to your 2009 tax return, filed on or before April 15, 2010;
- file an amended 2009 return; or,
- apply the credit on your 2010 return, filed on or before April 15, 2011.
- Attach documentation of purchase to your return.
Pending home sales rose in February 2010, potentially signaling a second surge of home sales in response to the home buyer tax credit, according to the National Association of Realtors.
For the first time, long-time homeowners who buy a replacement principal residence may also claim a homebuyer credit of up to $6,500 (up to $3,250 for a married individual filing separately). They must have lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the replacement home is purchased.
New legislation, the Worker, Homeownership and Business Assistance Act of 2009, which was signed into law on Nov. 6, 2009, extends and expands the first-time homebuyer credit allowed by previous Acts. The new law:
- Extends deadlines for purchasing and closing on a home.
- Authorizes the credit for long-time homeowners buying a replacement principal residence.
- Raises the income limitations for homeowners claiming the credit.
Under the new law, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return.
People with higher incomes can now qualify for the credit. The new law raises the income limits for homes purchased after Nov. 6, 2009. The credit phases out for individual taxpayers with modified adjusted gross income (MAGI) between $125,000 and $145,000 or between $225,000 and $245,000 for joint filers. The existing MAGI phase-outs of $75,000 to $95,000 or $150,000 to $170,000 for joint filers still apply to purchases on or before Nov. 6, 2009.
General Information
Homebuyers who purchased a home in 2008 or 2009 may be able to take advantage of the first-time homebuyer credit. The credit:
- Applies only to homes used as a taxpayer’s principal residence.
- Reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.
- Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.
The credit is claimed using Form 5405, which you file with your original or amended tax return.
Facebook
LinkedIn
Twitter