There are many tax credits available to Texans for First Time Homebuyers. By definition, a first time homebuyer under federal standards is anyone who has not purchased a home before, or who has not been an owner of record on a home for the past three years. Under the federal stimulus package, a homebuyer may be eligible for up to a $8000 tax credit if they close and fund on a purchase as a first time homebuyer by November 30, 2009. This is not a loan- nor does it have to be repaid. There is a formula that must be applied and income does come into play for some higher income individuals which could lower the tax credit. There are no restrictions on what the homebuyer can do with the money, whatsoever. Use the funds to pay down other debt, put into savings, take a vacation, to buy furniture for your new home, or even to use as a down payment.
The State of Texas has just announced a special program where a portion of the $8000 tax credit can be used for a down payment on a purchase by advancing a portion of the tax credit at time of closing. There are some fees payable to the State of Texas and you have to go through an approved lender in order to access this program. Legacy Financial, Inc. is an approved lender with the State of Texas. The “loan” must be repaid within 90 days of closing or it becomes a second lien on the home and begins to accrue interest at 10%. Continue reading ‘Texas Home Mortgage Loan Tax Credits Explained’ »