I am in the process of closing on a home in Michigan. I heard that the $8000 tax credit that the government approved for first time home buyers can be used to help offset the closing costs. I am aware that you can claim this credit on you federal taxes but I have not been able to find out how to use these funds immediately at closing. Is there anyone out there that is aware of any lenders that has used these funds at the time of closing?
In some states, lenders ARE offering a bridge loan on the 8K to help with closing costs. You would need to contact your lender and see if they offer such and if you qualify.
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4 Responses to “HOW CAN THE $8000 TAX CREDIT BE USED TOWARD YOUR DOWN PAYMENT?”
It does help offset closing costs — as a sort of "reimbursement." You must have your own funds for the down payment and closing costs. There is NO way you can use this money at closing because you are not eligible for the credit until after you have already closed!
After the closing, you will need the closing documents to prove the purchase has been completed & then you can submit for the tax credit. It will take at least 12 – 16 weeks after submitting the tax forms to receive the tax credit. References :
CAN’T (definitely not in Illinois). It is not intended for those who can’t save up for a down payment and closing costs.
This is a tax credit. You get the money only by amending your tax return AFTER you have closed. You should put it down as additional principal payment on your house GREATLY reducing the amount you pay for your home over time. Look at how you pay 3-5 times home’s cost by all the interest you pay over time. Takes about 12 weeks for amended return to be processed, as IRS is validating every Form 5405. References : tax pro
Kitty:
The wording should give you a clue to the value of the $8000.00
It is a tax credit and nothing more.
It can not be used for a down payment it is what you can use in the first year of a tax credit. References :
In some states, lenders ARE offering a bridge loan on the 8K to help with closing costs. You would need to contact your lender and see if they offer such and if you qualify. References :
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It does help offset closing costs — as a sort of "reimbursement." You must have your own funds for the down payment and closing costs. There is NO way you can use this money at closing because you are not eligible for the credit until after you have already closed!
After the closing, you will need the closing documents to prove the purchase has been completed & then you can submit for the tax credit. It will take at least 12 – 16 weeks after submitting the tax forms to receive the tax credit.
References :
CAN’T (definitely not in Illinois). It is not intended for those who can’t save up for a down payment and closing costs.
This is a tax credit. You get the money only by amending your tax return AFTER you have closed. You should put it down as additional principal payment on your house GREATLY reducing the amount you pay for your home over time. Look at how you pay 3-5 times home’s cost by all the interest you pay over time. Takes about 12 weeks for amended return to be processed, as IRS is validating every Form 5405.
References :
tax pro
Kitty:
The wording should give you a clue to the value of the $8000.00
It is a tax credit and nothing more.
It can not be used for a down payment it is what you can use in the first year of a tax credit.
References :
In some states, lenders ARE offering a bridge loan on the 8K to help with closing costs. You would need to contact your lender and see if they offer such and if you qualify.
References :