Home Buyers Tax Credit - Ask Kate For Answers

home buying | mortgage | refinance

By Leon

Home Buyers Tax Credit - Does the tax credit for first time home buyers apply to cash purchases?

Hi Kate, I have rented all my life and with today's economy I am kind of glad that I did! BUT I have a small sum of money available to me from a family trust (a little over $35,000.00) and I would like to purchase a condo or townhouse.

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I have been trying to do this since June of this year and have found it very frustrating because of market competition, and I am on the verge of giving up. I have place several cash bids and all have been rejected because of higher bids.

As a first time buyer, I wonder if the home buyers tax credit applies to me if I were to purchase a place out right? If not would it be better to seek a mortgage in the price range I am looking for, take the tax credit and then pay it off early?

Also do you have any advice on how to overcome the shadowy bidding process that surrounds acquiring a property?

Thank you so much for your time, Leon

Kate Answers: Home Buyers Tax Credit - Does the tax credit for first time home buyers apply to cash purchases?

Leon, I believe the tax credit is dependent upon buying a house, not getting a mortgage. Of course you should be checking with your certified public accountant to verify this information as the IRS has a say in the guidelines.

Many who are attempting to purchase condos are experiencing the same delays and disappointments as you. Depending on the area, condo markets are hot. Values have dropped considerably and prices are equal to what would have been a 20% down payment just a few years ago. Most of the condos and townhouses are bank owned or short-sales which slows down the process.

The fact that you feel it is shadowy is shared by many. My recommendation is to use a Realtor to represent you and prepare yourself for a lengthy process. But don't give up!

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Best Wishes,

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