We are on the second round of the stimulus package to first time buyers and now current homeowners who have owned a residence for at least 5 years. The $8,000 tax credit to first time buyers opened up our real estate market in 2009 and instilled confidence in buyers, sellers, and those who work in the real estate and mortgage industry. A stagnant real estate market in our area received a much needed boost, and homeowners who had been thinking of selling or attempting to sell were able to be successful. I explained to sellers that even though (at the time) they were not receiving a tax credit, the stimulus would affect them because there would be more buyers out there ready, willing, and able to purchase their home. And they were buyers with excellent credit! The stimulus package worked on many levels allowing people to stop renting and make an investment and those who needed to downsize or upgrade to sell their current home and purchase a property that better suited their needs.
The stimulus has been extended and now that the holiday season is officially over, the market is picking up. We hope to see a successful outcome with the addition of the $6,500 tax credit to homeowners or the Repeat Buyer Tax Credit. Another important fact is the owner does not need to sell their current property to receive the credit. They can keep their current residence, purchase another property (i.e. a cottage or summer home), and still receive the tax credit.
Also SONYMA has announced an alternative to their Down Payment Assistance Loans. Advancing the full tax credit towards the purchase of a home, the Tax Credit Advance Loan (TCAL) may be used towards the down payment, closing costs, and prepaid expenses. The borrower will repay the loan from the Federal Tax Credit which they will receive after filing their 2010 tax return. They have until June 30, 2011 to repay the loan in full amount without interest.
We are lucky to have affordable housing in Monroe County compared to other parts of the country. Business Week ranked Irondequoit as one of the “best places to raise your kids.” Low interest rates and the buyer tax credit should give our local economy a surge in confidence. Remember, however that banks and lenders have tightened their criteria for obtaining loans. If you have questions about your credit score or what you can do to clean up your credit, make an appointment with a REALTOR. For more information on the First Time Buyer and Repeat Buyer Tax Credit visit The National Association of Realtors website- http://www.realtor.org