Home Buying Credit 411

Most current buyers exploring the Lake Michigan real estate market are aware of the $8,000 tax credit the government enacted as a means of spurring demand for housing. What some people don’t know is the small tweaks that were made to this credit in order to further boost activity.

Instead of having to wait ‘til after tax season was over, first time buyers can use their credit towards the purchase of Lake Michigan real estate before the actual closing takes place, as a short term loan of sorts. However, these funds cannot be used on a down payment if the loan is being provided by the FHA, at least not the initial 3.5 percent down payment. This is intended to strike a balance between affordability while preventing buyers from purchasing homes they ultimately cannot afford.

This caveat should not discourage your efforts to purchase Lake Michigan real estate. Buyers should always keep in mind that the closing costs can also be pricey, the down payment notwithstanding. This short term loan can in some cases be the deal maker when an additional $4,000 in closing is too much.