This is true tax credit. The amount of the tax credit is determined by using 10% of the purchase price of the home, with $8,000. as a maximum. If you qualify for the full $8,000 tax credit and owe $2,000 on you currant taxes, you will receive a CHECK for $6,000 as refund for the tax return. What a great way to start. Many mortgages allow you reduce the principal and monthly payment one time. Talk to your mortgage banker and see if this is allowable under the loan regulations for which you are applying. By reducing your mortgage principal, you will then be reducing your monthly payment and increasing your equity in the home. All in the first year of ownership!

The definition of a first time home buyer is a buyer who has not owned a principal residence during the 3-year period prior to the purchase. That includes both husband and wife. Income limits are $75,000 for single taxpayers and $150,000 for married taxpayers filing jointly.

You can use this credit in 2009, or if you want to, and have already filed you 2008 taxes, you can file an amended return and have the credit faster. What a wonderful opportunity for a first time home buyer. The market would be flooded, if only people understood what a once in a lifetime opportunity this really is.

If you have any questions about any of the details of this program, e-mail or call me directly.

The inventory of existing homes is high. That means there is a great choice of homes to choose from and sellers may be more flexible in there selling price. Although home values in the Florence, SC community have held, some sellers are willing to discount more than usual to move their home more quickly.

Interest rates at their lowest in decades and will only stay down long enough for the housing market, nationally, to start recovering. Once the market has started on the upswing again, I feel that interest rates will climb back to more normal ones.

What many first time home buyers do not realize is that they can own their own home for less than they are spending for rent every month. Banks in the Florence market do have mortgage money available. Here is an example of typical home in the Florence, SC market. With a mortgage of $120,000, at 5% interest, the principle and interest payment every month would be $644.19 per month. Depending on the age of the home, this could purchase an 1100-1700 square foot home with 3 bedrooms and 2 full baths.

Now add the new FIRST TIME HOME BUYER TAX CREDIT of $8,000.00 and you have a once in a lifetime opportunity!

In my next blog, I will begin to explain how simple it is to use this tax credit.