Bank of America Offers Tips for House Hunters as the Home Buyer Tax Credit Deadline Nears

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Anyone considering buying a home should circle April 30 on the calendar.

“As consumers consider the advantages of the home buyer tax credit for their own personal situation, Bank of America’s mortgage loan professionals are prepared to walk them through the process and answer their fundamental questions.”

Bank of America is offering tips to prospective homeowners interested in taking advantage of the Home-Buyer Tax Credit, which is set to expire on April 30. In order to qualify for this tax credit, contracts to purchase homes must be signed by this date. The credit is an added bonus for eligible first time buyers and existing owners ready to move up to another home.

First time buyers are classified as single people, or both partners of a married couple, who have not owned a principal residence in the three year period prior to the new home purchase. The Home-Buyer Tax Credit allows these buyers to earn a tax credit up to $8,000 or ten percent of the purchase price of a home, whichever is lower.

Repeat buyers, or those who have owned and lived in the same primary residence for five consecutive years within the last eight years, can earn a tax credit up to $6,500 or ten percent of the purchase price of a home, whichever is lower.

According to Bank of America, both first-time and repeat home buyers should be familiar with several things before beginning the search for a new home, including: his or her ability to comfortably afford and pay for a mortgage, the home buying process, how the tax credit works and the deadlines for closing dates.

“As a leader in responsible lending, our mission is to educate consumers on their mortgage options and the responsibilities inherent in long-term successful homeownership,” says Todd Dal Porto, Enterprise Sales Executive for Bank of America Home Loans. “As consumers consider the advantages of the home buyer tax credit for their own personal situation, Bank of America’s mortgage loan professionals are prepared to walk them through the process and answer their fundamental questions.”

Home buyers looking to take advantage of the Home-Buyer Tax Credit should be aware that:

  • The credit applies only to homes valued at $800,000 or less.
  • The home must be used as the buyer’s principal residence for the next three years or the full credit will be recouped.
  • To qualify, a purchase contract must be in effect by April 30, 2010. The sale must close before July 1, 2010.
  • Home buyers that purchase a home before the 2010 deadline can claim the credit on their 2009 or 2010 federal returns.
  • The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as a buyer’s income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.
  • For those home buyers who do not pay enough federal income tax to offset the credit, the Internal Revenue Service (IRS) will send them a check for the difference. For example, a first time buyer who earned an $8,000 dollar tax credit, but who owed only $4,000 in Federal taxes would get a $4,000 check from the IRS.

To learn more about the Home Buyer Tax Credit contact your local Bank of America mortgage loan officer, call 888.866.6711, or go online to http://promotions.bankofamerica.com/firsthome/#tax-credit.

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