How to Use the $8,000 First-Time Homebuyer Tax Credit on Your Foreclosure Property

If you read the earlier post then you should know whether or not your foreclosure will qualify for the first time homebuyer tax credit. But if not then here’s a short review, it has to be your first home which is your primary residence.  You have to make less than $75,000 if you’re single or up to $150,000 as a married couple.  You can’t purchase the home from a relative and you must be under a binding contract by April 30, 2010 and close by June 30, 2010. See, simple if your foreclosure meets these requirements then please read more.

Now that you know whether or not you qualify, you need to decide how you will use it. Many first time homebuyers are finding that the tax credit is just what is needed to get into the home of their dreams.  You don’t want to deplete your savings getting into your first home having the first time homebuyer credit will insure that you have funds in place after you close on your home.

Being that this is foreclosure blog then the home you are interested in is probably a foreclosure.  Also being that this is a foreclosure property there may be cosmetic repairs that need to be completed.  Remember this is a home that you will be living in so you want the home in a condition that is acceptable to your living standards.  You will be able to use the funds from the first time homebuyer credit to make these renovations.  Knowing you have the money to handle these repairs up front can make you purchase decisions easier because you can rest assured that you don’t have to save up for years to take care of items that may require your  immediate attention not.

One thing you should remember when looking for homes is that the tax credit is technically defined as 10% of the purchase price of the home, up to $8,000. This means any home you buy that’s over $80,000 in price will still only qualify for an $8,000 tax credit. However, when you combine the tax credit with the incredible low interest rates available today and home prices lower than they’ve been in decades, you can really come up with an excellent deal on a wonderful home with these incentives if you take the time to look around. There are plenty of government incentives and assistance available to you now to buy a home, so take advantage of them!