Can you use a $7500 interest-free loan?
Are you a first time home buyer? Or even a second or third or more times home buyer?
If your answer is yes to both of these, then you may want to consider taking advantage of a provision found in the new Housing and Economic Recovery Act of 2008 and purchase a new home in the next 10 months.
What is it? First time homebuyers are eligible for a “credit” of 10% of the purchase price of a new home, up to a maximum of $7500 on homes purchased between April 9 of this year and
What is a first-time home buyer? A first-time home buyer, for the purpose of receiving this credit, is defined as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For a married couple, both husband and wife have to meet the three-year requirement.
Although this is labeled as a credit, it is really an interest-free loan. It does have to be repaid in equal amounts over 15 years. That means, the person(s) receiving the credit must repay $500 a year for 15 years. However, if you apply that $7500 to the principal of a 7% loan, over $4200 in interest would be saved. Or, you could invest in a long-term CD and gain income on the $7500 for 15 years (less the $500 a year you are repaying). You can do what you like with the credit, including pay any taxes owed.
To find out more information on this credit go to the site http://www.federalhousingtaxcredit.com. It will provide you with all of the information you will need to qualify for this credit. It also will direct you to additional resources that will be helpful in buying your home.
Call me at 706-207-5290, or email me with any questions on buying or selling your home in and around
Note: This is not legal of financial advice. For legal advice consult an attorney. For financial advice consult a financial advisor.
