If you took advantage of the 2008 First-Time Homebuyer Credit (which was actually an interest-free loan), you’ll repay it in equal portions for 15 years.
But also remember that under the Roth distribution ordering rules , the first money out will be annual contribution money, which is never taxed or penalized. Next out would be conversion money, and that also would not be taxed or penalized provided it has been in the Roth for five tax-years. And last out would be earnings. Therefore, because of these distribution rules, that means the only money taken from a Roth IRA that might pose a problem would be either earnings or conversion money that has been in the Roth for less than five tax-years if used for home purchase.
Improve your chances by: setting aside money every month. A good rule of thumb: On average, you’ll spend 2.5% to 3% of your home’s value annually on upkeep, repairs and maintenance, according to some home purchase experts. If you’re buying a $250,000 home, aim to save $520 to $625 per month.
The American Recovery and Reinvestment Act of 2009 expanded the first-time homebuyer credit by increasing the credit amount to $8,000 for purchases made in 2009 before Dec. 1. The Worker, Homeownership and Business Assistance Act of 2009 extended the deadline.Taxpayers who had a binding contract to purchase a home before May 1, 2010, became eligible for the credit. Buyers must have closed on the home before July 1, 2010. That closing deadline was extended to Sept. 30, 2010 by the Homebuyer Assistance and Improvement Act of 2010, enacted July 2, 2010.
To see what is happening for your first time homebuyer purchase in 2017, check with your local lender. Also, find out what other downpayment assistance and loan programs are available.Read More