How to take advantage of the Federal First Time Home Buyer Tax Credit

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Determine if you qualify.  To qualify you must NOT have owned a property within the last 3 years.  You must have purchased a property between January 1, 2009 and December 1, 2009.  You must purchase a primary residence.  This will not work for second or investment homes.  There are income limitations.  If you earn more than $75,000 ($150,000 for married couples) then the credit will decrease.  I advise going to the IRS website for the full details.  The link will be at the bottom.

The first step to buying a property is to get pre-qualified.  Call your local loan officer and have them look at your credit, job and entire financial picture to determine how much home you can buy.  Have the loan officer give you a pre-approval letter.

Contact your local real estate agent and begin the process of viewing properties.  Once you have found a property you like, write an offer (making sure that the settlement date is no later than November 30, 2009).  I would even schedule the settlement for 1-2 weeks before November 30th because you never know.  Once your offer is accepted, it turns into a contract. You will go through the home buying process, which includes inspections, negotiating repairs, etc.  At the same time you will need to submit more paper work to your loan officer.  Once the loan is approved, you will go to settlement.

Once you have gone to settlement, you can begin the process of filing for the tax credit.   You can file an amended tax return to get the money early.  Contact your local CPA to do all the paperwork. 

It’s commonly called the $8,000 tax credit.  The actual credit will be determined by the price of the property and your income. 

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