Columbus Loans & Home Mortgages

Less than a week ago President Obama signed the American Recovery and Reinvestment Act of 2009 in law. It is more commonly known as the economic stimulus bill. For first time homebuyers it contains a $8,000 tax credit which could mean real cash in your pockets, if you buy a Columbus House.

Here is how it works. If you buy a home between January 1 and November 30, 2009, and you did not own a home for 3 years, you can claim this tax credit. Essentially, the IRS will reduce your tax bill by $8,000 (or 10% of the purchase price, whichever is less). If you owe less than $8,000 they will refund the difference.

Here are 3 great features of this tax credit that will certainly stimulate the economy and make it very attractive for you to buy one of the many Colulmbus houses for sale:

1. This tax credit can be claimed on your 2008 (or 2009) tax return. If you did not file your taxes, yet, and you buy a home before April 15, 2009 (or later if you request and extension till Oct 15, 2009) you simply add it to your 2008 tax return and you get the refund within a couple of weeks. So, you could use this tax credit as a downpayment for your purchase. You still may have to borrow the downpayment for your mortgage for a few weeks until the tax refund actually arrives in your checking account.
2. The new tax credit does not have to be repaid. You may have heard about the old $7,500 tax credit that was enacted in April 2008, which had to be repaid over 15 years. Not so with the new one.  This is a real gift to home buyers. If you purchased your home in 2008, you still can go with the $7,500 tax credit and claim that cash – but you will have to repay it without interest over the next 15 years.
3. The tax credit is good for the purchase of a primary residence at an arm length transaction. This just means that you can’t buy or sell a house within your family just to claim the money from the IRS. You have to move in and live in the house for 3 years.

The bill does not say how you purchase or finance the home. Obviously, you could buy it all cash or Columbus loans or mortgages. But you could also buy it with seller financing or an installment sale (land contract), as long as it is a formal purchase and documented as such. This may actually encourage Columbus realtors to promote seller financing, because the tax credit could be used to pay their commissions as well as the downpayment to the seller.

If you ever thought about purchasing a home this year, now is the time to do it. Even if you don’t qualify for a Columbus mortgage immediately.

You will receive a triple reward, if you consider that home values are very low and you may even be able to buy a Columbus HUD home or bank owned property significantly below market value, interest rates are at historic lows, and the new tax credit gives you a 10% discount on the purchase price.
This is a strong combination of incentives – I truly believe that it will get the Columbus housing market going again.

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