Residential
Reasons to Build Your New Home Now
Unprecedented Reasons to Build Your New Home Now
Now might very well be the best time in our living memory to build a new home. A number of factors have come together to provide some excellent opportunities for people who have long had dreams of building their new home.
As you probably already know, interest rates are truly at historic lows. But what does that mean when it comes to affordability? A monthly payment at today’s 5% interest rate would save you $125.00 per $100,000 borrowed on a monthly basis when you compare it to a more typical 7% mortgage rate. As our country’s economic condition improves, mortgage interest rates are sure to climb. Therefore, now is a great time to take advantage of low rates and guarantee yourself a low payment for the next 30 years.
The recent federal stimulus package also provides a number of incentives for people who build new homes now. If you’re a first time home buyer or have not owned a home in the last 3 years you may qualify for an $8,000 federal tax credit. This is a refundable credit, not a deduction, which means your tax bill will be reduced by $8,000. And that’s money in your pocket! However, when building your new home, you must occupy it by November 30, 2009. For more information on this credit, please return to our Home page and read the In The News article entitled First-time Homebuyer Tax Credit. There are also numerous credits available to people who install energy saving technologies. These technologies are not only good for the environment but they will save you money in utility bills for the life of your home.
The other upside to our down economy is the reduction in prices in the products and materials we use to build your home. Construction costs are down by about 8% across the board and land costs are also reduced. In some cases lots can now be purchased for 25 to 40% less than the asking price from a just few years ago.
These benefits are available TODAY and make NOW the best time to build your new home. Please know that some of the federal programs have a very short life span and may not be available at this time next year. And as our economy improves, some of the lower prices we have now for land and building materials will begin to disappear. If you would like to learn more about today’s opportunities, please call Chad Wuebben at 608-270-9600 ext 11.
First-time Homebuyer Tax Credit
Housing Stimulus Bill Synopsis First-time Homebuyer Tax Credit
Information from National Association of REALTORS.
| Feature | Effective for purchases on or after January 1, 2009 and before December 1, 2009 |
|
Amount of Credit |
Maximum credit amount $8,000 |
|
Eligible Property |
Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence. |
|
Refundable |
Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser |
|
Income Limit |
Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000). |
|
First-time Homebuyer Only |
Yes. Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase. |
|
Revenue Bond Financing |
Purchasers who utilize revenue bond financing can use credit. |
|
Repayment |
No repayment for purchases on or after January 1, 2009 and before December 1, 2009 |
|
Recapture |
If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009. |
|
Termination |
December 1, 2009 |
|
Effective Date |
All revisions are effective as of January 1, 2009 |
The information provided here is for general use only. Encore Construction, Inc. does not advise on any personal tax matters. Please consult a qualified tax professional to establish how this is relevant to your current situation. For further details on the Tax Credit, visit FederalHousingTaxCredit.com.
