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When you are trying to get together a down payment to buy a house, an extra $8000 would come in handy, wouldn’t it?  But can the first time home buyer tax credit be used for a down payment?

Homer and Ivana were looking to buy a house and they could get a mortgage of $350,000 if only they had enough for a down payment.  They had some money saved, and they qualified for FHA so they only had to come up with 3.5%.  Sounds small enough, right?

3.5% of $350,000 is $12,250 and they had only $10,000 in the bank.  They had calculated all their expenses and knew what it was going to cost to buy the house. They also had to come up with closing costs, moving expenses, furniture and appliances.

They were afraid they would have to buy a cheaper house because of the down payment.  They knew that they could borrow $5000 from Ivana’s folks, but the lender wanted to see that they had the full down payment seasoned, and it still wouldn’t cover all of the closing costs.

When they heard about the tax credit for first time home buyers, they had some hope that it might be what they needed to make the down payment.  But they would have to file their 2009 taxes before they could get the credit, wouldn’t they?

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Comments (9) Apr 09 2009

Did you know that first time home buyers get a special tax credit?  Homes purchased between April 8, 2008 and July 1, 2009 qualify for a fully refundable tax credit of up to $7500.

When I bought my first home, there were many expenses incurred shortly after the my purchase closed.  As if coming up with a down payment isn’t enough, once the purchase closes there are many additional expenses.

First I had to pay to move.  While a move across town can be handled relatively inexpensively, some home buyer’s are faced with a cross country move that can really put a dent in the wallet. Read More

Comments (0) Jan 09 2009