Posts Tagged ‘first time home buyer’

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Update: Divorce is final! What happened with the First Time Home Buyer Tax Credit:

Saturday, April 9th, 2011

My divorce was finally official this week.  We both agreed to have my husband (spouse) keep the home.  I have not signed my interest in the home over yet (waiting on my lawyer).  In the divorce decree it states that I transfer all interest and rights to the home to my ex-husband.  It also says specifically that he will assume all responsibility for the IRS First Time Home Buyer Credit repayment.

According to the IRS, he will not have to pay that money back to the IRS unless he moves or sells the home.  Then he will have to pay the full $8,000 back.

I want to give some advice regarding divorce and the First Time Homebuyer Tax Credit.  If you are thinking of divorce, it is best for both of you to stay in the home until the divorce is final or you have transfered your rights and interest to the home over to your spouse.  Lucky for me, we were able to get the divorce done fairly quickly before the IRS came after me for having moved out of the house.  I do not know what triggers them to act on that or how long it takes them to demand the money, but if they did… it would have made things extremely complicated.  I do wish that I had stayed in the home because it really worried me. 

It also caused me to wait until the last minute to file our 2010 taxes.  I still have not filed because I have not transfered my interest to him yet.  I can’t remember what it’s called… maybe a Quitclaim Deed?  I have been too scared to file my taxes because of my new address and I am not trying to do anything to alert them of the move before he has full legal posession of the house.  I also want to send in a copy of the divorce and transfer documents with the tax return to avoid any issues in getting my 2010 refund.

A reader shared this link on one of my previous posts.  I found it to be extremely helpful.  It is the IRS rules and guidelines for divorce and repayment of the First Time Home Buyer Credit and also how moving or selling the house affects repayment.

http://www.irs.gov/newsroom/article/0,,id=206293,00.html

Hope this helps!  And remember, share your experiences with this too.  I’m sure others would find it very helpfull.

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Getting closer to owning our first home!

Wednesday, February 3rd, 2010

My husband and I are much closer to being first time home buyers!  It’s been such a long drawn out process!  We are working our way toward closing.  We are purchasing a HUD foreclosure home in Ohio.  Working with HUD and their property management staff has been a bit difficult.  They have a lot of ridiculous rules and seem to be slow about responding to communications.

We got our estimates for our contractors that will be installing a new water heater and carpet.  We are now waiting on our bank to get a second appraisal that will give them the “improved” value.  Once that is done, then we can apply for our first time buyer grant money with the Columbus Housing Partnership.  Then we just have to wait for that to come through and hope it shows up before our closing date at the end of February.  Otherwise, we have to pay HUD a $25 per diem.  That is really annoying.

I want to say that not all banks are created equal.  Definitely do your shopping around and be thorough about it.  We have gone through 4 banks in the process.  Their costs were all different and the way their procedures vary as well.  Also make sure that they have experience with the grant program you plan to use.  I had banks telling me totally different things and practically calling each other liars.  It’s been insane.  Also, be prepared for the numbers they give you in the beginning to change a lot.

In the end, I chose a bank that was a small amount more expensive just because their customer service blew the other banks away.  My mortgage banker with Union Savings has been absolutely fantastic.  He has gone above and beyond.  He made himself available late at night, on the weekends, and was always super fast at getting back with me.  Let me tell you from personal experience, customer service is VERY important.  The other bankers didn’t seem like it was very important to them.  Like they didn’t care if they got our business or not.  You get what you pay for I guess.

More updates soon!

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On the road to being first time home owners!

Friday, November 20th, 2009

A lot has happened since I last posted about our housing situation!  As I mentioned in an earlier blog, we were working with 5th 3rd to get a preapproval for a mortgage.  We were having some issues with the fact that my husband was 3 months short of a full 2 year work history and that he had been in prison prior to that.

It turned out to get really frustrating working with 5th 3rd.  They gave us a conditional preapproval but said they wouldn’t finance us until February.  Initially they said they would accept hubby’s prison work history, but after I went to all the trouble to get it and send it to them… they said we still had to wait.  Needless to say that pissed me off.  So then my parent’s said they would cosign and they have excellent credit.  Fifth Third STILL was going to make us wait until February!  Between all the lengthy delays and not hearing from them in a timely manner, I finally got fed up and said “screw them”.

So, we went to Strategic Mortgage as recommended by our realtor.  I explained what I had been through with 5th 3rd right off the bat and made it clear that I expected quicker results and for them to be straight up about our situation.  They said they didn’t see any reason why we wouldn’t get approved, even with hubby being 3 months short of the 2 year work history.  We have had some frustrating moments in our communications, but we finally got our preapproval!

We had found a house on 3 acres that we really liked.  But 2 hours before we were about to make an offer, they took it off the market and we haven’t been able to reach the bank that owns it.  So, we continued looking and found another 1,800sqft property in a nice neighborhood for a really good deal.  We just made an offer on it last night… literally… in the middle of the night!!  So, we are just waiting now.  Fingers crossed!

Our realtors have been fantastic!  We have been working with a second agent while our primary is out of town.

The house we are buying needs some roof repairs and a small amount of drywall repairs.  Because of that, we have to go with a FHA 203k rehab loan.  We can’t use straight FHA apparantly.  That sucks a bit because the 203k loan has a slightly higher interest rate.  Not much… about .25% higher.

The lender was trying to get us to use the Ohio Financing Agency (OHFA) grant that offers 2.5% of the purchase price for down payment and an interest rate increase of 5%.  I just told him that’s not the program we want to use.  The city of Columbus has a better program that offers up to 6% or $5,000 of the purchase price for down payment, closing costs, and/or principle reduction.  There is no interest rate increase with that one that I know of.  So you can see, that is a much better first time home buyer down payment assistance program.

We lowered the price on my parents home by $2,000.   We are hoping that if we move out, it may help people see the potential of the house better.  Of course, we will leave some furniture for staging purposes, but I do think it will be much easier this way.  I’m tired of constantly having to keep this house spotless anyway!  Haha!

Everyone… keep your fingers crossed and pray for us that we get our first home!!

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