First Time Home Buyer

You might be taking a closer look at becoming a first time home buyer after Congress passed the housing bill recently. The bill includes a few incentives that really make now the perfect time to jump into the market and become a first time homeowner. Of course, the depressed real estate market is enough incentive for quite a few people wanting to take advantage of the lower prices of homes; however, the government is now offering a tax credit that makes it hard to not jump in. The full tax credit of $7,500 is exceptional as it is obtainable to couples who make no more than $150,000 in joint income, which makes a huge number of people able to qualify.

Quite a few people are feeling that the time is right for them to get active in the housing market, buy their first home and utilize the incentives including the tax credit. The people with the most to offer the market are the first time homebuyer who does not bring additional housing into the market; all they bring is their ability to buy.

The tax credit is appealing to many because it is not something in which you have to apply; it is something you claim when you do your taxes. However, the tax credit does not come without certain requirements and regulations.

The tax credit is based on 10 percent of the sale price of the house with a roof of $7,500. This means that a house that sells for $75,000 or more will qualify for the full $7,500 credit. A house that sells for $65,000 will only qualify for $6,500 credit.

It is also important to note that the tax credit is really more of an interest free loan that has to be paid back over a 15 year period. When you claim the tax credit you will receive the total amount on your taxes and will then have to pay it back over then next 15 years with the total remaining balance due if you sell your home before the loan is paid off. Since there is no interest on the credit it will cost you $502.50 a year if paying back the full $7,500 credit.

There are other incentives available through state programs and private programs such as a lower interest rate for public servants such as teachers, military, police and firefighters. These incentives are available for all, not just first time homebuyers.

Down payment assistance is also available from many lenders; however, the requirements and restrictions are a bit stricter now than they have been in the past. The credit score is very important when applying for a 0% down payment program.

A realtor can and often will point you to more incentive programs than even the ones discussed above. The housing market is defiantly a buyer’s market and for anyone who is considering entering the market now is the best time. To take advantage of the tax credit you will want to close on your new home before July 1, 2009 so you might want to start getting ready now before you lose out or the market changes.

The recently launched web site, www.federalhousingtaxcredit.com, that was developed for the newly signed tax credit law has brought over 100,000 visitors.  This shows that there is a rather strong interest of first time home buyers wanting to take advantage of the temporary incentive.  The $7,500 tax credit is available for all first time homebuyers who buy a home from April 2008 to July 2009.  The tax credit was signed in hopes of encouraging potential first time homebuyers to take advantage of the surplus of available homes and buy now.  Many potential first time homebuyers have hesitated as the economy continues to dip; however, now is a buyer’s market and a great time to take advantage of the falling home prices.

According to the National Association of Home Builder’s President Sandy Dunn, in response to the number of hits on the website, “The initial response is encouraging”.  She goes on to say, “This could be the trigger that helps move prospective first time buyers off the fence and back into the market.  But it won’t last forever.”  The tax credit that is drawing so much attention is a part of several provisions that have been enacted into law recently that was meant to get the housing market and the economy back on their feet, so to speak.  The attention and number of hits is encouraging but time will tell.

The popular web site offers useful information regarding how the tax credit will work and includes the requirements for eligibility.  So far the site has attracted nearly 120,000 hits which work out to nearly 10,000 per day.  Details, questions and answers regarding how first time homebuyers can take advantage of the credit is divided into four user friendly sections:

• Tax Credit at a Glance:  Providing an overview of just how the credit works this section is valuable to the visitors who are just hearing about the tax credit incentive.
• Frequently Asked Questions:  This section offers an easy to understand common questions and answer format and contains basic information regarding the tax credit.  This includes the definition of a first time homebuyer, the homes that qualify for the credit, the income limits that will qualify as well as the payback provision and other common questions and concerns. 
• The Law’s Other Provisions:  This section offers a summary of a number of provisions from the Housing and Economic Recovery Act of 2008 in addition to the tax credit.  This section will offer information on how to prevent foreclosures, revive the housing market and how to make the nation’s economy stronger.
• Home Buyer Resources:  This section offers links and resources that will make the buying process simpler and smoother for the first time homebuyer.

The efforts of the website and the Act come at a time when the housing market is in crisis and the number of foreclosures is increasing steadily.  The crisis casts a shadow of gloom over the economy on the whole and by stimulating the housing industry with relief and incentives there is a hope that will move that shadow away and offer a ray of hope and sunshine.

The headlines are full of disappointing news regarding the housing industry; however, the current flat economy is creating opportunities for many. As in many areas around the United States, people who have wanted to buy in high end areas such as Boston but could not are reaching for their dreams of finding a first home in a coveted location. It seems that the buzz word in real estate right now is opportunity. According to many real estate companies, there are a lot of great deals to be found in today’s housing market. This does not come as a big surprise to the many folks looking to buy their first home, particularly in Boston. Massachusetts home prices have fallen around 10 percent since 2005 which is allowing many first time home buyers to enter a market they previously could not afford.

One of the big draws for the first time home buyer today is the perks they are finding. With the efforts of the government, housing development centers and other incentives available first time home ownership is a dream come true for an increasing number of people all over the United States and all over Massachusetts.

Many programs in Massachusetts offer a number of resources for the first time home buyer including classes, information, guidance and even a lottery system for the individuals that qualify to purchase condominiums and homes at below-market prices. There are plenty of enticing programs available for the first time buyer as well in the Massachusetts housing. If a person works for the town or city as a teacher, firefighter, police officer or other public service position they can be eligible for lower interest rate loans. Similar programs are available for people using public transportation or who are trying to rehabilitate a home that is in rough condition.

Naturally there are conditions to be eligible for most programs in Massachusetts and other places around the U.S. Income guidelines and limits as well as other stipulations may apply; however, it is always a good idea to see if you are eligible for any incentive programs. Doing so just may save you significantly on your first home and may allow you more home than you dreamed possible.

When it comes down to it, if you are considering buying a first home, the best time is now. It is a buyers market and there are a lot of great deals and incentives available to the first time home buyer! Expect to possibly be required to take a home buying 101 class or other classes that are offered through incentive programs. Additionally the governmental incentives and tax credits are available to most all first time home buyers to try to stimulate the stagnant housing market. If you are ready the market is primed just for you, run your credit, smooth out the wrinkles and start shopping for that dream home. Make your dreams your reality while the market is yours!