Gina Chirico

With the Extension and the Expansion of the First-Time Homebuyer Credit...there's never been a better time to make your move in New Jersey.

If you are like many other people -- you may be thinking...What's the Big Deal or the tax credit only benefits First-Time Homebuyers, yada yada yada....

Let me tell you what the big deal is!! 

Let's back up a minute....for starters, the original tax credit of up to $8,000 for first-time homebuyersdid not only benefit first-time homebuyers -- think about all the sellers who sold their house to first-time homebuyers.  Those sellers benefited too from the sale of their house to first-time homebuyers. 

Moving forward....not only has the tax credit of up to $8,000 for first-time homebuyers been extended from November 30, 2009 through April, 2010, the income limits have been raised thus allowing more first-time homebuyers to take advantage of the tax credit being offered.   Some key points to the $8,000 first-time homebuyer credit include:

• To qualify as a "first-time homebuyer" the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase and must purchase a home between November 7, 2009 and April 30, 2010.  As long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until June 30, 2010 to close.
• The income limits to qualify for the full credit are $125,000 for a single person and $225,000 for a married couple.  Individuals earning up to $145,000 and married couples earning up to $245,000 are eligible for partial credit.  (The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income-over $145,000 for singles and over $245,000 for couples are not eligible for the credit.)
• The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

Not only will Move-Up Buyers and Empty Nesters (i.e., REPEAT BUYERS) reap the benefits from selling their house ONLY to First-Time homebuyers (i.e., the old tax credit), but current homeowners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight may be eligible for the new tax credit of up to $6,500 ($3,200 for those filing separately).  Some key points to the tax credit expansion include:

• To qualify, you must have owned your home and used it as a principal residence for at least five consecutive years of the previous eight years.  (E.g. If you sold a home you owned and lived in for five years two years ago, and have been renting since, you'd still be eligible for the credit.) As long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until June 30, 2010 to close.
• The income limits to qualify for the full credit are $125,000 for a single person and $225,000 for a married couple.  Individuals earning up to $145,000 and married couples earning up to $245,000 are eligible for partial credit.  (The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income-over $145,000 for singles and over $245,000 for couples are not eligible for the credit.)
• The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.
• Your new house does not need to cost more than your old house for you to be approved for the credit.

• The credit cannot be used on homes costing more than $800,000.

For more special tips on how buyers and sellers can take advantage of the First-time Homebuyer Extended Tax Credit of up to $8,000 and the New Tax Credit of up to $6,500 for qualified move-up/empty nester/repeat home buyers (i.e., existing homeowners) and close escrow before July 1, 2010, please read my post Tips for First-Time Homebuyers, Repeat Buyers and Sellers to Close Escrow by July 1, 2010 (The Extension and Expansion of the Homebuyer Tax Credit) .

In addition to the tips I posted in my blog, you basically need to:

1. Find a Realtor;
2. Get a pre-approval;
3. Look at homes;
4. Choose a home and make an offer;
5. Negotiate terms;
6. Complete attorney review, conduct inspection, property appraisal, homeowners insurance BEFORE April 30, 2010;
7. Get financing and close the deal BEFORE July 1, 2010.

(Keep in mind that steps 3-6 may have to be repeated...several times).

Even with the extension there is no reason for New Jersey buyers and sellers to still be waiting on the fence.  It takes time to buy and sell your New Jersey home.  Don't wait until the last minute...wouldn't you like to be in your new house before we spring forward?