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St. Louis Real Estate Search

 

Last Minute Review of Homebuyer Tax Credit and Interest Rate Update

Paramount Mortgage Company - St Louis

First-time homebuyers made up a record high share of sales in March, according to the latest Campbell Surveys poll of more than 1,500 real estate agents nationwide; First-time homebuyers accounted for 48.2% of all home purchases.  The March uptick comes ahead of the extended tax credit deadline.

Who Qualifies-

  • First Time Home Buyer $8,000 Tax Credit
    • The primary home buyer and/or spouse may not have owned a home in the previous three (3) years to qualify.
    • Buyers cannot be claimed as a dependent by another taxpayer or be under the age of 18.
  • Repeat Home Buyer $6,500 Tax Credit
    • Existing home buyers must have lived in and owned a primary residence five (5) consecutive years of the previous eight (8) years to qualify.
    • Buyers cannot be claimed as a dependent by another taxpayer or be under the age of 18.

Contract – A signed, binding sales contract is required by April 30, 2010.
 
Closing – The purchase must close on or before June 30, 2010.
 
Extended deadline for some – Certain U.S. military, Foreign Service and intelligence service personnel have an extra year to claim the home buyer tax credit. (Contract by April 30, 2011 and close by June 30, 2011).
 
Income Restrictions:  The full amount of the tax credit is available for individuals with a Modified Adjusted Gross Income (MAGI) of no more than $125,000 ($225,000 on a joint return). The credit phases out above these limits to an income cap of $145,000 ($245,000 for joint filers). A MAGI above $145,000 ($245,000 for joint filers) reduces the credit to zero.
 
Determining the Credit: 

  • First Time Home Buyer $8,000 Tax Credit
    • Maximum tax credit is $8,000.
    • The credit is determined by taking the lesser amount of either 10% of the sales price of the home or the tax credit limit of $8,000.
  • Repeat Home Buyer $6,500 Tax Credit
    • Maximum tax credit is $6,500.
    • The credit is determined by taking the lesser amount of either 10% of the sales price of the home or the tax credit limit of $6,500.

Types of Homes: Any home that will be used as a principal residence will qualify for the credit. The purchase price must be less than or equal to $800,000. Home types include single-family detached homes, townhouses and condominiums. Homes cannot be purchased from family members or your spouse’s family members (including parents, grandparents, children, grandchildren, etc.)
 
Claiming Your Credit: The credit can be claimed on a homebuyer’s 2009 or 2010 tax return. The homeowner must submit IRS form 5405 and attach a copy of the HUD-1 Settlement Form (closing statement).
 
Payback: The tax credit does not have to be paid back. Taxpayers with incomes too low to owe tax will receive a refund check from the IRS for the credit amount.
 
Selling Your Home:  If the home is sold within three years of the purchase date, the entire amount of the credit is recaptured on sale.
 
Be realistic – Buyers should be upfront with their Realtor about their must-haves and their wish list.  Buyers who aren’t realistic risk running out of time searching for the “perfect” home.
 
Be sure to check with your tax adivisor or the IRS (www.irs.gov) for questions or concerns regarding your specific situation. 

St. Louis Mortgage Interest Rates – April 21, 2010 *

  • 30-year fixed-rate mortgage 5.125% no points
  • 15-year fixed-rate mortgage 4.375% no points
  • 5/1 adjustable rate mortgage 3.750% no points
  • FHA/VA 30-year fixed rate mortgage 5.25%
  • Jumbo 5/1 ARM 4.125% no points
  • Jumbo 15 year fixed rate mortgage 4.75%

For more information or if you have questions on mortgage rates in St. Louis you may contact me by phone at my direct line, (314) 372-4319, email at rfishel@paramountmortgage.com or you can visit our company website at http://www.paramountmortgage.com.


*Note- The above rates are based upon a typical sale price of $187,500 with a 20% percent down payment leaving a loan amount of $150,000 to a borrower with a 720 credit score for a loan with no discount points charged. Rates and terms will vary depending upon loan amount, home value, credit and income of borrower.

This information is provided by this author and this site for informative purposes only and is not warranted or guarteed in any way.

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