If you’ve talked me at all, you’ve probably heard about the $7,500 Tax Credit that first time home buyers get.  I posted a pretty good FAQ on it earlier (Tax Credit Will You Get It) , but I’ve come across 2 additional questions I thought it would be worth sharing.  Keep in mind all of this should be verified with a CPA for your individual situation.

1. Can I use the $7,500 for my down payment?

   The short answer is no.  Basically, since it’s from the IRS/Government, it would bring the IRS into the HUD statement. [soap box] Basically, the Government is too big to be bogged down by your transaction, instead they would rather focus on taking your money at gun point for other projects.[/soap box]

2. So I can’t get the $7,500 until I file my 2008 Tax Return?

   Short answer.. Yep, you have to wait. The best suggestion would be consult with CPA then adjust your income tax witholding or adjust quarterly estimated tax payments.

If you watched CNBC today you likely heard "Bond Guru" Bill Gross comment on interest rates.  His prediction is that rates will continue to fall, likely as low as 4%’s.  1% reduction in rate is the equivalent of a $10,000 reduction in price.  So homes will be slightly more affordable.  The big question is whether buyers who are taking advantage of the market will wait after hearing this news.

The bottomline should require you to ask these questions:

1. Why am I moving?
2. What is my motivation for moving? (yes ask it again)
3. Why do I NEED to buy?

If you are buying investment property then there might be a reason to pause.  If you are renting, you should have already bought something.

Here’s more from the interview:

"The mortgage rate will come down another 50 to 100 basis points," Pimco’s founder and chief investment officer said. "That’s basically what the government needs. They need a 4 1/2 percent to 5 percent 30-year rate in order to support home prices and, yes, to encourage refinancing and the process of reliquification within the economy. "

His advice: "[OWNERS] Don’t refinance yet. "

Purchasers on the other hand should move forward, especially, first time home buyers who should take advantage of the $7,500 Tax Credit while it lasts.

Some time next year, he sees stabilization coming to the economy, and lower mortgage rates are an essential part of that process.

Just a little note to remind folks that I’m pretty much jumping into to becoming a social media guru.  I want to be the one on the internets for all your real estate needs, so be sure to follow me @JarvisTeam .

I’ll be posting some follow up to the tax credit in the coming days.  In addition, I’ll be covering some blog topics to use in my class.

On July 30th Pres. Bush signed a major housing bill (HR 3221) into law.  As part of the bill, Congress created a new, temporary tax credit to provide some incentive to buy a home.  Here’s a quick check list to see if you qualify:

• Bought and CLOSED after April 9th, 2008
• YOU MUST CLOSE BEFORE JULY 1st, 2009
• Must be your first home (or you must be an individual who has not owned a principal residence in 3 years)
• You must make under $75,000 or have a joint income of less than $150,000 (you still get partial credit if you are over)
• The credit is 10% of the purchase price of the home, with a cap at $7,500
• Obviously, this property must be in the US
• Finally, you must have use Joshua Jarvis as your Realtor (ok, so I am kidding about that one)