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$8,000 Tax Credit Now Available to First-Time Home Buyers

READ my blogs and you'll know how!

ONLY in 2009, hurry!

THINGS BEING EQUAL it's almost always better to own your home rather than to rent. After all, you build equity and get to write off your mortgage interest. And if you play your cards right, when you sell you'll be eligible for one of the best tax breaks around. But that doesn't mean that everyone should be a homeowner. If your move is short-term or if interest rates are high and property values outrageous, it may be worthwhile to deal with a landlord for a while.

Now is a great time since the interest rates are low again!! $avings!

MORE TIPS:

Financing
If you do decide to buy, then it's in your best interest to put down at least 20% of the purchase price. That way you can avoid private mortgage insurance (PMI), which is required by banks when borrowers put down less than 20%. Should you put less than 20% down, however, you should be informed when you reach the 20% equity mark which, in turn means you can cancel this added expense. (It used to be that many uninformed home owners continued to pay PMI even when they didn't need it.)

Tapping Your IRA
Congress has a soft spot for first-time home buyers. Now IRA owners can withdraw up to $10,000 as a lifetime credit penalty-free (but not tax-free) for the purchase of a first-time home. That means you and your spouse together can withdraw up to $20,000 (as long as each of you pulls $10,000 from your own accounts). It also means that your relatives can raid their own IRAs penalty-free to make a gift to you for a first-time home purchase.

Believe it or not, you can actually use the first-time home-buyer exemption more than once. You simply must not have owned a home during the previous two years. But don't get too excited: No matter what, each person is limited to $10,000 over a lifetime.

Borrowing From a 401(k)
Even though it is an option, withdrawing money from your 401(k) to fund a home purchase is a rotten idea. You'll owe taxes plus a 10% penalty. You will also cripple your retirement savings, since most plans won't allow you to contribute to your plan for at least a year following a withdrawal. That means you're going to lose out on your company match as well as future tax-deferred contributions, not to mention the earnings on the money you've withdrawn.

Borrowing from a 401(k) isn't that much better. Sure, you'll avoid taxes and penalties, but this would only make sense if you are earning less on your 401(k) than the cost of your mortgage. Furthermore, if you leave the company, you run the risk that your loan will be called immediately.

Extracted from the www.realestatejournal.com

Letting Your Agent Lead

Just when you thought you had the whole home-buying process under control, you fall in love with what everyone's calling a "FISBO", - a house that is For Sale By Owner. Does that change anything? Do the same rules and guidelines apply? And most importantly, can you still purchase the home with the representation of your buyer's agent?

Absolutely. Sellers will agree to work with an agent who brings a qualified buyer to the table. And when you're embarking on an experience as large and important as purchasing a home, it's important that you have a qualified professional representing your best interests - whether the seller does or not.

Just as you would for any other listed property, let your agent be the point of contact with the seller of a FISBO. This is important because not only is your buyer's agent well-qualified and dedicated to serving your needs, in some cases your agent may have to have the first conversation with the seller in order to be able to represent you in the purchase.