Latest news with #firstTimeHomeBuyer
Yahoo
14 hours ago
- Business
- Yahoo
Will Trump launch a new first-time home buyer tax credit?
: We are monitoring government moves regarding the first-time home buyer tax credit and will update this page as necessary. Now that the presidential election has been decided, speculation is bubbling up about a possible revival of the first-time home buyer tax credit. While Kamala Harris had promised to offer $25,000 in down payment assistance to prospective home buyers to recharge the housing market, Donald Trump remained mum on the campaign trail regarding any similar incentive. However, there were hints provided about potential plans in Republican campaign documents. With the Federal Reserve rate and mortgage rates holding firm, the housing market is wound tight with stifled demand. Will the new Trump administration find a way to relieve the pressure? This embedded content is not available in your region. The Republican 2024 platform stated that tax incentives and other support for first-time home buyers — as well as opening portions of Federal Lands to new construction while reducing regulations — would boost home construction and ownership. The Republican roadmap also said that "slashing inflation" would reduce mortgage rates. Donald Trump has also expressed an interest in steering the Fed's monetary policy in an effort to lower mortgage rates. The goal: to get home loan rates back down to 3%, "maybe even lower than that," Trump has said. The original first-time home buyer tax credit was created by Congress in 2008 and ended in 2010, though service members and some federal employees had an extra year's eligibility for the tax credit. Providing a tax rebate on income taxes owed, it allowed a credit of up to 10% of the home purchase price on a principal residence to a maximum of $8,000. The IRS defined a first-time home buyer as someone who had not owned a house in the three years before the purchase of the home the tax filer was seeking the tax credit on. With a federal tax break currently nonexistent, first-time home buyers can explore possible mortgage credit certificates in their state. MCCs are issued by state housing finance agencies and allow home buyers to take a portion of the mortgage interest they pay annually as a federal tax credit, up to a $2,000 limit. The tax credit can range from 10% to 50% of the mortgage interest paid annually on a primary residence. MCCs are subject to income limits and other restrictions set by a state housing finance agency and primarily serve low- to moderate-income households. Once approved, the home buyer receives a credit certificate applied to federal income tax owed on their tax return. Find information on the housing finance agency in your state. Some cities, counties, and states also provide down payment assistance programs, reduced interest rates and grants to qualified first-time home buyers. State housing finance agencies and the Department of Housing and Urban Development can help you find these home-buying assistance programs. You can also search your local municipality's website for mortgage programs where you live. Income limits, location, credit score requirements, and other restrictions may apply to these grants, loans or down payment assistance programs. First-time home buyers are often eligible for loan programs tailored to their needs. One of the most important benefits includes lower down payments: Conventional loans offer down payments as low as 3%. FHA loans offer down payments as low as 3.5% for credit scores as low as 580. VA loans and USDA mortgages offer no-down-payment programs. VA loans are for military personnel and their families, while USDA loans are for low-to-moderate-income borrowers in rural areas. The best mortgage lenders for first-time buyers will also help you find loan and assistance programs that you may qualify for. While it is of no help in clearing the hurdle to homeownership, once you are settled in, you can look forward to long-held tax breaks still in effect. The tax benefits include deductions on discount points and origination fees paid during the loan process, as well as a mortgage interest deduction and a tax deduction on the property taxes you pay as a homeowner. There are also tax incentives for energy-efficiency home improvements and more.
Yahoo
3 days ago
- Business
- Yahoo
What's the best age to buy a house?
Buying a home is one of the biggest financial decisions you'll ever make. So, you may be wondering: What is the best age to buy a house? Are you too young to think about homeownership? Or do you feel like you've waited too long to buy? Here's a look at the average age of first-time home buyers and how to decide the right age to make a move. Learn more: A step-by-step guide to buying a house This embedded content is not available in your region. In this article: Average age to buy a house Pros and cons of buying when younger Pros and cons of buying when older Is there a 'right time' (or age) to buy? FAQs Young adults are now waiting longer to buy their first homes. In 2024, the average age for Americans to buy their first house reached a record high of 38, according to a report from the National Association of REALTORS®. The shift is largely due to soaring home prices and student loan debt levels. Many young adults are also delaying marriage and prioritizing personal growth and career development over homeownership. That said, the right age to buy a home may vary depending on your financial situation, desired location, lifestyle, and long-term goals. Building equity. Buying early and owning your own home for an extended period gives you time to build up equity. Your home equity is the difference between what your home is worth and the amount you still owe on your mortgage. You can leverage home equity to invest or meet other financial goals in the future, and even use it to afford a down payment on your next house if you move. However, you don't accumulate equity when you rent. Predictable housing costs. Annual rent increases are relatively common. But when you purchase a home with a fixed-rate mortgage, you get set monthly mortgage payments. (Note: Property taxes, homeowners insurance, and homeowners' association fees, if applicable, may fluctuate over time.) Tax perks. You can save at tax time by deducting mortgage interest, property taxes, and other home costs on your return. Homeowners who itemize deductions can take advantage of this perk. Reach out to a tax professional to learn more. Freedom of expression. Most landlords impose restrictions on the customizations you can make to rental properties. Owning a home, though, means you can renovate or upgrade your space to make it more functional. Lower price point. Home prices generally rise over time. So, buying young means you can take advantage of the lower price point. Plus, if you stay in the house for a long time, you could pay off your home loan before you retire. Limited mobility. Leasing means you only have to stay put for a year (or less in some cases) before you can relocate. But buying a home is more of a long-term investment, and selling too prematurely could be costly. Lending terms. There are loan programs for people with low or no credit scores or those with limited income, minimal cash reserves, or high debt levels. The problem is, you may not qualify for the best lending terms offered to prospective buyers. Specifically, you could get stuck paying a higher mortgage rate. Financial stability. Buying in your middle or older years gives you more time to build a solid financial foundation. Remember, good credit, ample reserves, and a low debt-to-income ratio make you more attractive to lenders. More clarity. It's also highly likely that you'll have more clarity on where you want to live long term when you're older. Whether you're retiring in your dream area or relocating to be closer to adult children, buying a home later in life can bring peace of mind. You'll have confidence knowing you're living exactly where you want to be. Forfeited equity growth. Again, buying young can work in your favor as home values climb. But buying older gives you less time to build up equity that you can convert to cash to use however you see fit. Mortgage payments during retirement. Some homeowners experience a significant dip in income during their golden years. Unfortunately, costly mortgage payments could stretch your budget thin. Uncertainty. There's no way to know what the future holds. You could face medical challenges or other unexpected obstacles as you age that make it difficult for you to afford or maintain your dream home. The right time to buy a home isn't always about age. It's more about your financial situation, future plans, and ability to manage homeownership costs. Here are some questions to ponder: Do you meet the lending criteria for a mortgage? Do you have a minimal debt load? Can you afford to make a down payment on a new home? Do you have at least three to six months of expenses saved for emergencies? Can you comfortably afford the monthly mortgage payments? Do you plan to live in the home for an extended period of time? Do you have the means to cover maintenance and repairs? Do you have a designated point of contact to assist with questions or address your needs? Answering yes to most of these questions is a sign that you're ready to buy a home, regardless of your age. Before moving forward, analyze your situation, needs, and goals to make an informed decision. Dig deeper: Should you buy a house? How to know if you're ready. A 2024 National Association of REALTORS® report revealed that the average age of first-time home buyers is 38. However, depending on your financial situation and goals, the right age for you could be much younger or older. Again, there's no right or wrong age to purchase a home, as it depends on your unique situation. However, most states require you to be at least 18 unless an adult signs real estate contracts on your behalf. If you're financially stable with a solid credit profile, adequate savings, and a clear vision for your future, homeownership in your 20s could be a smart financial move. You'll have several years to build equity, benefit from predictable housing costs, and even enjoy a paid-off home before retirement should you purchase your 'forever home.' Laura Grace Tarpley edited this article.
Yahoo
08-05-2025
- Business
- Yahoo
Home renovation mistakes and how to avoid them
If you're a first-time home renovator there are several aspects to consider, from managing projects to keeping on top of the finances. Mistakes can prove costly, so if you're considering getting any work done on the house, here are some things that you should avoid. Your budget isn't just about what you can afford You need to consider what you can afford, and then what work you can do with that money. However, you also need to think whether you will have added enough value to make it worthwhile. If you add up what the property was worth when you bought it and what you spend on the renovation and end up with roughly the value of the property now, you may have wasted everything you gained as the property's price appreciated. If it's your forever home, it doesn't matter, but life can be unpredictable so it's worth considering how much value you're adding. Do all the research into costs up front In order to control the costs, it's a good idea to get several quotes. Instead of going with the cheapest, it can be a good idea to pick a company that costs everything clearly, and factors everything in at the outset, so you don't get a cheap quote with a bunch of expensive extras further down the line. Read more: How higher house prices are impacting young people's finances However, there are things that will be costed up separately, and you need to properly investigate them. For example, if you're having major work done and need to move out and rent somewhere else for a while, remember that the average local rental cost when you first apply for planning permission may not be the same as when it actually comes to moving out. Never underestimate the power of VAT In everyday life, any VAT is always included when we buy things, so we're very used to the price we're quoted including the tax. In the building world, quotes are often excluding VAT and you need to add another 20% on top. It's vital to check this when you're looking at quotes, so you appreciate the full cost. It's also important to bear the psychological impact in mind. Because we are so used to seeing the price including any tax, it's easy to have the ex-VAT price imprinted on your mind when you're doing rough and ready calculations. It can help to cross out any ex-VAT prices and highlight the real price, so it's this that sticks in your mind. You need to think about whether renovations will add enough value to your home to make it worthwhile. · Hispanolistic via Getty Images Don't get pushed around You don't have to go with every solution suggested by contractors or salespeople — even if it seems like the answer to your problem, it may end up being a lot more expensive.
