Cristina McBreairty

REALTORS® from all around the country are combining forces to get the point across to Congress that the $8,000 first time homebuyer tax credit is working. But with the credit set to expire soon, it's not enough.

Be sure to do your part! Make your opinion count! If you have not already, be sure to send your message to Congess. Here is a link that makes it very quick and easy...

Take Action Now: Extend and Expand the Homebuyer Tax Credit

A year after the financial collapse of 2008, the housing market is very different than it was before the foreclosure crisis. Here are seven bits of wisdom from economists and financial planners for anyone contemplating a home purchase today:

• Old-fashioned basics are more important than ever. The safest way to purchase a home is to put down 20 percent on a fixed-rate, 30-year (or less) mortgage.


• Don't become overconfident about income growth. Even though buyers in their 20s and 30s will likely see their incomes grow more quickly than previous generations, it is important to act sensibly when borrowing.


• Anyone contemplating adding children to the family should calculate whether they could live on one income because having both halves of a couple work may turn out to be impractical.


• Include a maintenance budget. Even new homes need upkeep and repairs.
  Buyers who can't afford their dream home now should opt for a starter home where they can save money each month for what they really want.


• Consider a property that can be expanded and improved down the road when money is available.


• No two buyers are the same, but they should all feel confident with the loan they enter into, no matter the size of the mortgage.

The first-time home buyers tax credit ends November 30th. Is it possible to buy in the next two weeks and still close in time to collect it?

Scheduled to end on December 1st, the time is running short to get your FREE CASH. The demand is going to be huge and the process is likely to take longer than usual.

But is NOT too late! In order to receive this credit, you must get moving! To guarantee you don't miss out, do your best to aim for these dates:

1. Try to Close by November 15th. Thanksgiving is at the end of November and will cause additional delays. There will be much less stress if you aim to close before the holidays. Those who wait until the end of November could find themselves losing out on the credit.
2. Complete Due Diligence by November 1st. This means all your inspections, appraisals, title review, and MORTGAGE PAPERWORK needs to be complete by this time.
3. Under Contract by October 15th. You need to have a home picked out and under contract by this date. If you delay beyond this date, you may find the rest of your time line rather challenging.
4. Start Your Home Search NOW. Give yourself a few weeks to search for the perfect home. It can be done quicker, but it may be very challenging.

So, get moving before it's too late! There is still time!

If you are a First-Time Home Buyer and purchase a home before December 1, 2009 you can take advantage of the 2009 First-Time Home Buyer Tax Credit.

Here's what you have to do to get your benefit:

• Close on your home purchase by November 30, 2009,
• Ensure that you are a qualified first-time buyer under IRS guidelines,
• Decide which year to file under, 2008 or 2009,
• File an amended 2008 return or choose to apply the credit to your 2009 tax return.

Deciding When to Apply the Credit

If you want the benefits of your credit as soon as possible:
You might choose to file under your 2008 tax year. Since April 15 has already passed, you would have to file an amendment to your return. However, if you've already filed for an extension of your 2008 return, then you can simply claim the credit when you submit your return.

If you anticipate a drop in income next year:
You can wait to claim the credit as part of your 2009 filing. In some cases the value of the credit might be higher, particularly if in 2008 you qualify for only a partial credit because your income is over $75,000 (single) or $150,000 (joint).

Your Next Steps
Once you have determined which year to apply the tax credit, you will need to do two things to claim the credit:

1. Fill out Form 5405 to determine the amount of your available credit, and
2. File an amended return for your 2008 taxes, or wait and apply to credit when you file your 2009 tax return.

People who have lost their homes through foreclosure (or short sales) or who have restructured their mortgage loans may qualify for tax relief under a new tax law, the Mortgage Forgiveness Debt Relief Act of 2007.

Highlights of Mortgage Debt Relief:

• You may exclude up to $2 million of debt forgiven or canceled by a mortgage lender on a main home.
• Both mortgage restrucuring and foreclosures qualify
• Now available for the years 2007 through 2012.

For more information, go to The Mortgage Forgiveness Debt Relief Act and Debt Cancellation.