5 Must Knows for New Home Buyer Tax Credit

New home buyer tax credit can seem daunting for those that have never given much thought to the subject. Purchasing a new house requires you to pay attention to many details. However, there are some useful bits of information that can help you understand more about being a first time homebuyer and the details involved. Make sure you assess the situation in the best way possible and steer clear of common mistakes by reading the guidelines below.

Good Market Does Not Equal Good Time to Buy

Just because the market is doing well does not mean that you should be making a purchase just yet. Those that are considering buying a home really need to think about whether they are able to support all the details of home ownership, such as job security and credit scores. You also need to think about whether the location will serve you for the rest of your life, or at least for the next few years. You have to make sure that you are able to live in the new home without any negative consequences.

Who Claims The Credit?

Those that qualify for credit are required to provide documentation that proves the purchase is of your main home. The credit can be refused if there is insufficient documentation. The documentation should include the statement of settlement that displays the names of all those involved, along with the home’s address, sale price in the contract, purchasing date and signatures.

Those that do not have a settlement statement, such as individuals who have bought a mobile home, are required to attach a copy of their sales contract that clearly displays the names and signatures of those involved. Other details that must be included are the purchasing date and address.

What is The Cost of The credit?

There are any factors that contribute to the credit cost. These factors include when the home was purchased, the price of the home and your income. Despite the phrase “credit”, it can actually be looked at as a loan that is free of interest. The amount must be repaid within a period of 15 years, without any interest. The repayment is done in installments of equal amounts. There are some exceptions to the rules so it is best to find out from a lawyer to make sure that you are getting the best deal possible.

When Does The Home Cease to be Considered the Main Property?
There are several situations in which the home will cease to be considered your main home, such as:
• Home re-selling
• Transferring of home in a settlement (such as divorce)
• Change home to business or rental property
• Change home to second or vacation home
• Home has been damaged
• Home is taken in foreclosure

When Does The Full Credit Have to be Repaid?

There are certain circumstances in which the entire credit must be paid. These include:
• Not living in the home for a particular amount of nights
• The home is damaged
• Change home to second or holiday home
• Change home to rental or business property
• The main home has been sold to a relative or someone of significance
Finding out the necessary information can help you make an informed decision when it comes to buying your first home.

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