Belt Auction

How does the first time home buyer tax credit work?

Do you know about the first time home buyer tax credit? How does it work? Will I get that 8,000 credit back in my taxes in the following year? Would my sister and I qualify? I have never owned a home before and my credit fico is fairly good at 765. I have a credit line of 30,000 and only 5k debt. My sister on the other hand has about 40k debt in loans and has owned a home within the last three years. Her credit is lower than mine but she makes nearly a six figure income. I know if we buy a house together we will not exceed the 150k limit requirement to qualify for first time home owner tax credit since my income does not exceed 50k but would the fact that she has owned a home recently disqualify us from the tax credit or would me being a first time home buyer fulfill the requirement regardless that she has owned a home recently if we buy together? Would it be advisable that I purchase the home in my name if she will not qualify and just transfer her into the deed and mortgage at a later time once the tax credit is received in the next tax year? Also, in regards to foreclosures through auctions do you think they are a good idea? Do you deal with foreclosures auctions? I know a home can be obtained for much less than market value via these means.

Public Comments

1. They will do a credit background.
2. Be careful with this First Time Homebuyer thing. It's a zero interest loan that you have to pay back with extra tax payments or with your refunds. If your sister has $40,000 in debt and a lower credit score, consider very carefully before tieing your credit to a joint venture with her. A six figure income doesn't count for much if she's not a good money manager. A joint purchase is like co-signing with someone you're not married to. Why would you buy a house together if she has owned a home already? And, if she has, she is not eligible. This whole deal sounds like a recipe for trouble and hard feelings to me. Buying a foreclosure can be a fiddly business. First right of redemption and all that. Best to talk to a real estate agent in your area to get useful information.
3. First off you only get 10% of the the price of the house, up to $7,500. For example if the house is $60,000 you would only get $6,000. If the house is over $75000 you would only get the $7,500. It has absolutely nothing to do with your credit. You don't start to pay it back until your 2010 taxes. As far as your sister, she will not qualify. You may be able to get half of the money. I'm not for sure about if you and he in later or not. Go to the irs website there is many scenarios and it would help you to understand a little better.