First-Time Home Buyer Tax Credit at a Glance

  • The tax credit is available for first-time home buyers only. (or individuals who have not owned a home for the past 3 years)
  • The maximum credit amount is $7,500.
  • The credit is available for homes purchased on or after April 9, 2008 and before
    July 1, 2009.
  • Single taxpayers with incomes up to $75,000 (up to $95,000) and married couples with incomes up to $150,000 (up to $175000) qualify for the full tax credit. ($95000 single and $175000 couples qualify for less)
  • The tax credit works like an interest-free loan and must be repaid over a 15-year period.

More Info At:    www.FederalHousingTaxCredit.com

PREQUALIFY HERE

  

Ways To Use Tax Credit
**always consult a tax professional-neither Care Real Estate Advisors nor Kyle Jackson are qualified to give tax advice**
· Gift Funds (borrow down payment from relative) — Repay with Tax Credit
· 401k/IRA Withdrawal — Repay with Tax Credit (Fannie Mae/ Freddie Mac/ FHA– Do not qualify based on estimated 401k monthly payment)
· Change W4 Withholdings after purchase — Recoup credit immediately by decreasing the federal tax amount deducted from paycheck
· Plan ahead to 2009 — File 2008 returns with your tax preparer: Funds credited immediately
 
401k/IRA Withdrawal Example
**always consult a tax professional**
$250,000 Purchase Price
3% Down Payment ( $7,500)
30 Year FHA Mortgage
3% ($7500) Seller Paid Closing Cost Credit
401k/IRA Down payment Loan ($7500)
Tax Credit in 2009 ($7500)***assuming you owe 0 or are getting a refund ***
Reinvest the Tax Credit into 401k/IRA ($7500)
NET OUT OF POCKET : $0
 
BENEFITS OF HOMEOWNERSHIP:
· Mortgage Interest Deductions / Property Tax Deductions
· Appreciation / Equity
· Capital Gain Exclusion
· Pride of Homeownership
 
 
HERE IS HOW TO USE YOUR 401k/IRA to GROW YOUR RETIREMENT
 TAX FREE
Using the example on the previous page:
 
· $7500 in your 401k (let’s use 10% as an annual return) :
Year   1 Yield: $750 ROCI (return on capital inv)
You Stop Contributing to 401k and let $7500 Grow for 30 Years at 10%,
Balance: $130,871
***taxes differed and paid when you withdrawal***
· $7500 Down payment on a $250,000 Home
The Home Appreciates at 2% (King County Historical Trend=4%) : $5000 ROCI 
The Home appreciates on average 2% per year for 30 years
Home Value Year 30: $452,840
Homes Original Value ($250k) - 30 Year Projection ($452,840) : $202,840
***TAX FREE utilizing capital gains exclusion: $250k Single, $500k Married***
 
Using a dollar for dollar comparison and the same capital ($7500) investment. A generous return on the 401k at 10%: $750 ROCI.
Using those same funds to help purchase a home, your ROCI: $5000, year one.
When you decide to withdrawal or use your 401k funds, you pay taxes on them. If you sell your home you will walk away with up to $250k/$500k TAX FREE.
 **this does not take into account the other personal and tax benefits from owning a home**
 
 
 
Featured Listing
13505 NE 136th Pl

Convenient Kirkland location, just up the hill from Woodinville's wineries, minutes to Evergreen hos...

$410,000 View Listing »
More Services
Pre Qualify Now
VIRTUAL PROPERTY TOURS
Serving Seattle & the Puget Sound Region, 360 Sound View provides quality immersive virtual tours in the Northwest.
Real Estate Appraisal - Home Inpectors
CMA-Home Value Report-Appraisals-Home Inpections
Rent To Own USA
Windermere
OPEN HOUSES
OPEN HOUSES IN EAST KING COUNTY
Your Mortgage Planning Specialist- Kyle Jackson
Call Kyle Jackson 425-829-4029 to set up your free Real Estate Evaluation: The purpose of any plan is to provide a guide or road map that will direct you towards reaching your personal goals or achieving a set task. The more clearly defined the plan and objectives are, the better equipped you are to be consistent in your decision-making and stay committed to achieving your long-term goals.
Sellers Advantage Program- James RE Group
-Expect More -Choose Your Level Of Service -Full Service Real Estate Services -Low Cost Guarantee