For many potential first time home buyers, the 2008 and 2009 “First-time Homebuyer Tax Credit” has been a bit of a mystery. 

I’ve had many questions such as — When do you get your tax credit?  Do you have to pay it back?  What if you sell your house within 2 or 3 years?  What if I’m a first time home buyer but my husband isn’t? 

REALTOR.org created a “Cheat Sheet” that covers EVERYTHING and should answer 99% of your questions about the 2008 and 2009 First time home buyer tax credit.

>>> VIEW THE “CHEAT SHEET” 

FREQUENTLY ASKED QUESTIONS:

What is the difference between the 2008 tax credit and the 2009 tax credit (other than the amount)?

The primary difference is that the $7500 tax credit of 2008 needs to be paid back over the next 15 years (at $500 per year).  The new 2009 tax credit does not need to be paid back, as long as you stay in your home for at least three years.

When would I receive the $8,000?

There are several variables.  Assuming that you qualify for the full $8000 tax credit, you will need to file your 2009 income taxes in early 2010 and if you don’t owe any additional income tax, you should receive your check for $8,000 from the federal government within 1 to 6 weeks (it just depends on when you file and how your tax preparer submits your information.

A few other possible scenarios:

• If you owe $2,000 on your tax return, you will receive a refund of $6,000  ($8000 – $2000 = $6000)
• If you are entitled to a refund on your income taxes (let’s say $1,500), then you would receive an refund of $9,500 ($1500 + $8000 = $9500)

When is the last day I can buy a home and still get the $8,000 Tax Credit?

You must purchase BEFORE December 1, 2009.  That means that you should make an offer on a home in mid-October, as it usually takes 30 to 45 days to close on a home or condo.

I owned a home a few years ago — can I still qualify for the First-time Homebuyer Tax Credit?

Yes, if you have NOT owned a principal residence in the three (3) years prior to purchasing your new home.

My husband is not a first-time home buyer, but I am — can we still qualify for the tax credit?

You would only qualify if your husband (or spouse) has NOT owned a principal residence in the three (3) years prior to purchasing the new home.

Are there any income limitations?

Yes.  The full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). If you are an individual who makes $85,000 (for example), you will still qualify, just not for the full amount.  The tax credit phases out to those who make more than $95,000 (individuals) and $170,000 (on a joint return).

How long do I have to live in my home or condo?

If you sell your home before the 3-year limit, you will be required to pay back the $8000.

What if I want to buy a $30,000 foreclosure home?

The amount of the tax credit is the lesser of 10 percent of cost of home or $8,000.  So if you purchased a $30,000 home, you would get a $3,000 tax credit.  In order to get the full $8,000 you would need to purchase a home that is at least $80,000.

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I hope this information was helpful to you!  If you have any questions about the tax credit or need assistance with the purchase of your first home, please call anytime at (404) 432.1844.  I truly enjoy working with first-time home buyers and would be honored to help.

KERRY LUCASSE  ::   ATLANTA & DECATUR REAL ESTATE CONSULTANT  ::   KELLER WILLIAMS REALTY

Atlanta Real Estate – Buying a home in Atlanta GA

Before you make an offer on a home, make sure you get pre-qualified and find a loan that fits your needs with these comprehensive questions.

1. What are the most popular mortgage loans you make? Why?

2. Which type of mortgage plan do you think would best for us? Why?

3. Are your rates, terms, fees, and closing costs negotiable?

4. Will I have to buy private mortgage insurance? If so how much will it cost and how long will it be required? NOTE: Private mortgage insurance is usually required if you make less than a 20-percent downpayment, but most lenders will let you discontinue the policy when you’ve acquired a certain amount of equity by paying down the loan.

5. Who will service the loan? Your bank or another company?

6. What escrow requirements do you have?

7. How long is your loan lock-in period (the time that the quoted interest rate will be honored)? Will I be able to obtain a lower rate if they drop during this period?

8. How long will the loan approval process take?

9. How long will it take to close the loan?

10. Are there any charges or penalties for prepaying the loan?

The lender must disclose a good faith estimate of all settlement costs. A check to cover your closing costs will probably have to be a cashier’s check. The title company or other entity conducting the closing will tell you the required amount for:

• Downpayment.
• Loan origination fees.
• Points, or loan discount fees you pay to receive a lower interest rate.
• Appraisal fee.
• Credit report.
• Private mortgage insurance premium.
• Insurance escrow for homeowners insurance, if being paid as part of the mortgage.
• Property tax escrow, if being paid as part of the mortgage. Lenders keep funds for taxes and insurance in escrow accounts as they are paid with the mortgage, then pay the insurance or taxes for you.
• Deed recording fees.
• Title insurance policy premiums.
• Survey.
• Inspection fees-building inspection, termites, etc.
• Notary fees.
• Prorations for your share of costs such as utility bills and property taxes.

A Note About Prorations. Because such costs are usually paid on either a monthly or yearly basis, you might have to pay a bill for services used by the sellers before they moved. Proration is a way for the sellers to pay you back or for you to pay them for bills they may have paid in advance. For example, the gas company usually sends a bill each month for the gas used during the previous month. But assume you buy the home on the 6th of the month. You would owe the gas company for only the days from the 6th to the end for the month. The seller would owe for the first 5 days. The bill would be prorated for the number of days in the month, and then each person would be responsible for the days of his or her ownership.

What to Keep From Your Closing

• The Real Estate Settlement Procedures Act (RESPA) statement. This form, sometimes called a HUD 1 statement, itemizes all the costs associated with the closing. You’ll need for income tax purposes and when you sell the home.
• The Truth in Lending Statement summarizes the terms of your mortgage loan.
• The mortgage and the note (two pieces of paper) spell out the legal terms of your mortgage obligation and the agreed-upon repayment terms.
• The deed transfers ownership of the property to you.
• Affidavits swearing to various statements by either party. For example, the sellers will often sign an affidavit stating that they have not incurred any liens on the property.
• Riders are amendments to the sales contract that affect your rights. For example, if you buy a condominium, you may have a rider outline the condo association’s rules and restrictions.
• Insurance policies provide a record and proof of your coverage.

If you are looking for a knowledgeable — and very honest — Atlanta real estate agent, please don’t hestitate to call me at 404.432.1844. 

All the best,

Kerry Lucsse

Intown Atlanta Real Estate Consultant

Keller Williams Peachtree Road

(404) 432 1844

** Metro Atlanta real estate agent, specializing in the Atlanta Intown neighborhoods, including Grant Park, Virginia Highlands, Kirkwood, East Atlanta and Druid Hills.

As a real estate consultant in Metro Atlanta, my job is to ensure that my clients are armed with as much information as possible in order to make an informed decision when purchasing a new home.  I want my first-time home buyers to be 100% comfortable with their decision today… and in the years to come.

The most important question for a new home buyer is usually “How much will this cost?”

 This may vary from state-to-state, but here is the breakdown for Georgia home buyers:

1)  Earnest Money………….Typically 1% of the purchase price

     ** Due when you submit your offer on a home

2)  HOME INSPECTION……………………………..$375 – $500

3)  HOME APPRAISAL………………………………….$300 – $375

4) LOAN APPLICATION FEE / CREDIT CHECK………………… Varies by Lender

5) TERMITE INSPECTION (optional, but recommended)……. $45 – $75

6) LOW-FLOW PLUMBING CERTIFICATE (Dekalb County)…. $75

***  TOTAL (ESTIMATED) COST FOR A $300,000 HOME –>  $3,800 ***

Once the home has been inspected, appraised and approved by the lender, there are costs AT CLOSING. 

CLOSING COSTS are really in two fee categories — Closing Costs and Prepaid Items

1) CLOSING COSTS include the loan origination fee (usually1% of the purchase price), title examination, title insurance, courier fees, transfer tax, intangibles tax and other miscellaneous fees. 

2) PREPAID FEES include costs to set up your escrow account with the lender and include homeowners insurance, property taxes, and homeowners association dues (if any).  Usually your new lender will want 2 – 6 months of reserves in the escrow account, just in case you do not pay your mortgage, they will still be able to insure the home and pay the property taxes.

Typically, the closing costs and prepaid items add up to 2 – 4% of the purchase price.  Using my $300,000 example above, the closing costs would be $6,000 to $12,000.  It just depends on how much you are financing, if you pay for discount points (to decrease your interest rate), etc.  For an accurate breakdown of your closing costs, ask your loan officer or mortgage broker for a “Good Faith Estimate.”

THE GOOD NEWS — When you negotiate your offer on the home, you can also ask that the seller pay a portion of the closing costs and pre-paid items.

If you have any questions about the home-buying process, please don’t hestitate to call me at 404.432.1844 or visit my website at http://www.ATLhomesearch.com

All the best,

Kerry Lucasse

Real Estate Consultant, Keller Williams Realty

KerryLucasse@KW.com

404.432.1844

Atlanta Real Estate – Buying your first home – First time home buyers

It is a fantastic time to buy a home or condo in Atlanta — interest rates are low, prices are low and there is a fair amount of inventory on the market.  The question is… are you prepared to make that next step? 

To follow are 10 sure-fire ways to help you buy your first home:

1. Decide what you can afford. Generally, you can afford a home equal in value to between 2 – 3X your gross income.
 
2. Develop your home wish list. Then, prioritize the features on your list.

3. Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, proximity to your work, and of course, safety.

4. Start saving. Do you have enough money saved to qualify for a mortgage and cover your down payment?  Ideally, you should have 5 to 20 percent of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs. Closing costs — including taxes, attorney’s fee, and transfer fees — average between 2 and 5 percent of the home price.

5. Get your credit in order. Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments
 
6. Determine your mortgage qualifications. How large of mortgage do you qualify for? Also, explore different loan options — such as 30-year or 15-year fixed mortgages or ARMs — and decide what’s best for you.

7. Get preapproved. Organize all the documentation a lender will need to preapprove you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements.

8. Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you’ve saved to buy your fist home without paying a penalty for early withdrawal.

9. Calculate the costs of homeownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.

10. Contact a REALTOR®. Find an experienced REALTOR® who can help guide you through the process
 

FOR MORE INFORMATION ABOUT THE HOME BUYING PROCESS, CLICK HERE

If you have any questions about the Atlanta real estate market or need help determining what you can comfortably afford, please don’t hesitate to call me at 404.432.1844.  I truly enjoy working with first-time home buyers and it would be a pleasure to help you find your new Atlanta home!

Kerry Lucasse
REALTOR, Keller Williams Realty
404.432.1844
KerryLucasse@KW.com