First-Time Home Buyers Tax Credit & Home Improvements

 - First-Time Home Buyers Tax Credit

 I am sure you have heard all about the federal government’s 8 thousand dollar tax credit eligible for first time home buyers.  If you would qualify as a first time home buyer and have not found your home yet or have / have not decided if you are going to participate in this program available to you,  the program is expiring in 3 months and 1 day.

You will have to close on your new home by midnight November 30, 2009. (Unless the government extends or expands the program)  Since a purchase transaction could take from 30-60 to close you may want to decide quickly if you are planning on it.

 -Now for the rest of the story…

The federal government also is giving a 30% tax credit up to a maximum amount of $1,500.00 dollars total for 2009 and 2010 for certain home improvements to your home with  approved energy efficiency levels.

Home Improvements:   Tax credits are now available for home improvements:

* must be “placed in service” from January 1, 2009 through December 31, 2010

* must be for taxpayer’s principal residence, EXCEPT for geothermal heat pumps, solar                water heaters, solar panels, and small wind energy systems (where 2nd homes qualify)

* $1,500 is the maximum total amount that can be claimed for all products placed in service in 2009 & 2010 for most home improvements, EXCEPT for geothermal heat pumps, solar water heaters, solar panels, fuel cells, and small wind energy systems which are not subject to this cap, and are in effect through 2016

*  must have a Manufacturer Certification Statement to qualify

*  for record keeping, save your receipts and the Manufacturer Certification Statement
improvements made in 2009 will be claimed on your 2009 taxes (filed by April 15, 2010) — use IRS Tax Form 5695 (2009 version) — it will be available late 2009 or early 2010

The cost of installation is included in the eligibility

You may have heard of this but you may not have known these energy efficiency improvements can include:
• Exterior windows and skylights,
• Exterior doors. including storm doors,�
• Roofing All ENERGY STAR qualified metal and reflective asphalt shingles,
• Central Air conditioning,
• Air source heat pumps
•  Natural gas , propane and oil furnaces,
•  Gas, propane, or oil hot water boilers,
•  Gas, propane or oil hot water heaters,
•  Advanced main air circulating fans.
• For additional information and details please see: http://www.energystar.gov/index.cfm?c=tax_credits.tx_index#c1

-Let’s evaluate the first-time home buyer tax credit:

You are a first-time home buyer who purchases their home by November 30, 2009 and receive the 8 thousand dollar tax credit.

If the home you want to purchase may need some updates, improvements or repairs you should be able to negotiate a reduce below market price.

Not only will house is in better shape, more attractive curb appeal, increased energy efficiency  than when you purchased it ,  you may have instant equity due to the improvements therefore increased value of your home.

You take $5,000.00 of the tax credit and use it towards one of the allowed energy efficient improvements and you will $1,500.00 tax credit back for a total of $8,000.00 + $1,500.00 for a total of $9,500.00 in tax credit from the government.

In case you are not aware what the difference between a tax deduction and tax credit is:

A tax deduction is a subtraction from your taxable incomeor the amount of income you are required to pay taxes on.

A tax credit is a deduction to the amount of taxes you are required to pay as if you have already paid this amount in taxes.

Therefore, if you get the $8 thousand and/or $1,500.00 tax  credit it will be considered as if you have already paid this amount to the federal government as taxes so you will get the amount back as a refund even if it is more than the amount you owe for taxes.

NOTE:  The home improvement energy efficiency tax credit is not only available to first time home buyers, it is available to any purchaser of a primary residence home and ALSO:  is available to any homeowner regardless of if you purchase your home in 2009, 2010 or have owned your home for years.

This is very important if you may be considering selling your current residence and would like to improve the condition/value of your home prior to putting it on the market.  The federal government will help you get a higher sales price for your home.  You may not be eligible for the 1st time home buyer $8k tax credit so why not at least get a little piece of the pie for yourself?

An educated consumer is our best customer.

-Low Current Mortgage Rates

Current mortgage rates are still at historically low levels not to mention unbelievably low adjustable rate mortgages if a term shorter than 10 years may be more beneficial for your individual situation and needs

Call one of our experienced loan professionals here at Total Mortgage Services for all of your home financing needs. Regardless of whether you are purchasing a home, refinancing your current home to lower your current interest rate or to improve the value of your home, the quality of your home, the quality of your life we are here to help you or any of your family members or friends.