Real Estate News for North Pinellas County

Tax credit money UP FRONT for your Pinellas County home?

  money-bagsIf you read my earlier post on the $8,000 first time homeowner tax credit, you know how you can turn the purchase of a new home into some much-needed cash.
     “But,” you wail, “I’ll have to wait until sometime next year to get the cash, and I really need it NOW — in fact, it would sure come in handy as down payment money on the new house.”
     If you live in Florida, you’re right — you do have a bit of a dilemma. You can get an $8,000 tax credit if you buy a new house, but you can’t get the house without a down payment, and you aren’t really expecting any extra cash until, well, next year, when the tax credit money comes in.
     However, if you live in a number of other states — 10, to be exact — your governor and legislature has already considered your problem, and come up with a fix.
      Let’s say you live in, oh, Missouri. In that state, you can get something called a “tax credit advance.” The state will advance you up to 6 percent of the home’s selling price, and you don’t have to pay it back until next August (That’s August of 2010.)
     If you fail to pay the money back once you get your tax credit, it is still not a mortal sin — the state of Missouri will simply roll that advance into a second mortgage with a 10-year payback.  The interest rate on that second mortgage is half a percentage point higher than the first mortgage’s interest rate.
Colorado, New Mexico, Delaware, Tennessee, New Jersey, Washington State, Ohio, Idaho and Pennsylvania now have similar versions of this bridge loan idea. Not every plan is exactly the same, but they all share the idea of providing that tax credit money sooner rather than later.
     Do you like the idea? Do you think we should have something similar here in Florida? Write or call your state representative and say so.
     “But,” you cry again, “I don’t know who my State Rep is!”
     No problemo. Go to the Florida House of Representatives web site and punch in your ZIP code — the site will tell you who you should write or call. Here’s the link: http://www.myfloridahouse.gov/sections/Representatives/myrepresentative.aspx

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