I've made a few phone calls this week to individuals that might want to take advantage of the Federal Tax Credit being offered to qualified home buyers and was very surprised at how uninformed and/or misinformed the general public is about this program.
Most importantly, this is a tax credit, not a deduction on your income tax. For most first time home buyers, the credit is for 10% of the purchase price up to $8000. That means if you are eligible for a refund, your refund will be increased by the amount of the tax credit. And if you owe Uncle Sam, your bill will be reduced by the amount of the tax credit. Sweet, isn't it?
Some existing home owners that buy a new primary residence will also qualify for a tax credit of 10% of the purchase price, up to $6,500. These home buyers must have resided in their previous property for 5 of the past 8 years. There are income requirements for both tax credits and deadlines to be met. For a fact sheet on the program, shoot me an e-mail or call your tax preparer.
The other good news for home buyers is that interest rates have hit a new all time low, with fixed rates for a 30 year mortgage going as low as 4.71% and 4.29% for 15 year mortgages. It's just a matter of time before these start going up and so if you're in the market to refinance or purchase, give me a call today.
Both the tax credit and interest rates are have a profound effect on the Rochester real estate market. I've been on three listing appointments this week and have started working with 2 new buyers, all very unusual for the time period between Thanksgiving and New Years!
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