To purchase a home is probably one of the most basic desires people have, and the advantages of receiving any type of discount will make it more affordable.
Until recently, first-time home buyers enjoyed a tax credit, but that discount is no longer available.
However, the mortgage tax credit for low-income, first-time buyers is available for those whose applications to their state or local governments are approved.
It provides a credit of a percentage of mortgage interest payments. If a certificate is obtained from the governing agency, the buyer can claim this credit every year.
Other assistance programs are available for both the first-time buyer and those who have previously owned a home.
The average credit score to purchase a house is 600 and above, but the Federal Housing Administration (FHA) helps buyers whose credit is less than stellar by allowing them to make smaller down payments and offering lower interest rates.
Although buyers will be required to pay mortgage insurance against a possible default, it is a good way to obtain a home and build credit at the same time.
Veterans Administration Loans
Another common loan is the Veterans Administration (VA) loan. It is available to current or past military personnel and their eligible spouses. If borrowers do not have enough money for loan fees and down payments, they can roll those into the loan, making this a popular loan.
In addition, there is no minimum credit score nor is there any mortgage insurance to be paid. All in all, this loan is a very good deal for those who are financially strapped.
One program that does not get that much attention is the Housing and Urban Development (HUD) Good Neighbor Next Door program that is available for
- Police Officers
- Emergency Medical Technicians
They can actually receive 50 percent off the list price of a home in areas that are being regenerated. This is especially beneficial for people who plan to remain in the area for a while since they must commit to staying at least three years. This program is available in all states. You can check online for available houses.
For example, if you live in Florida, and you are interested in the Orlando area, do an online “Orlando property search” to find properties that match the specifics you have set.
A real estate agent can help with any kinds of programs that may benefit his or her client. If you are interested in any type of assistance program, develop a list of questions to ask a realtor and prepare to put together any and all documents that may be necessary. If you want to purchase a home, do not let the disappearance of the tax credit for buying a house deter you.
You still get a tax break for buying a home through the various deductions available to homeowners. The property tax deduction has seen a few changes with the advent of the new tax laws, but it is still available for the majority of homeowners.
In some higher tax states, a new cap has been added. The deduction for mortgage interest has seen some changes, as well, in the limitations it incurs, but, once again, the majority of homeowners will not be affected – only those with home values of $750,000. In states with higher real estate prices, this could cause some concern.
Interest For Home Equity Loans
Unfortunately interest for home equity loans is no longer deductible unless the funds are used to make home improvements, but the mortgage insurance premium deduction, which was also disallowed, has been reinstated for 2018 tax period.
Whether it will be extended into 2019 is yet to be determined. This is a big deal for FHA mortgagees, who purchased a home with less than 20% down payment.
Solar Tax Credits
For some good news, state and federal governments allow tax credits to purchasers of solar energy. The solar tax credit is still viable until the end of 2019, where you can claim the full benefit of 30 percent.
Afterwards, the value will reduce each year until 2022 on the federal level, when it will disappear for homeowners, altogether. However, the state tax credits may still be available.