Friday, April 23, 2021

4 Benefits to Being a First Time Home Buyer

If you have been renting for years and have now decided to finally purchase your own home, the journey ahead will be filled with excitement and anticipation. 

Also, since this will be your first home purchase, it will include many great financial perks along the way. Whether it's tax advantages, help with a down payment or other incentives, you will have plenty of opportunities to see your home purchase become easier than you ever imagined. 

As a first-time buyer, here are four of the biggest benefits you'll gain as you move forward with your transaction.

No IRA Withdrawal Penalty

As a first-time buyer, you can look to the money in your IRA to help fund your purchase. In fact, you can take as much as $10,000 out of a Roth IRA or traditional IRA without being required to pay the dreaded 10% penalty for early withdrawal. 

Once withdrawn, the money can be put toward closing costs, a down payment, or other related expenses.

Down Payment Assistance

When you are a first time home buyer, some states have programs in place to provide down payment assistance. Based on your income, these programs may also have limits as to the cost of the property you wish to purchase. 

However, if you qualify, you'll get help making a down payment, paying closing fees, and even making repairs to your new home.

Home Mortgage Interest Deduction

One of the biggest benefits you'll gain as a first-time buyer, the home mortgage interest deduction, will probably be the largest deduction you will take on your tax returns. 

To make sure you take full advantage of this perk, be sure you have your tax returns completed by an accountant or CPA who is up-to-date on the latest federal tax regulations.

Residential Energy Credits

If you have bought a new home and want to make it as environmentally friendly as possible, you will get plenty of help from the federal government to make this happen. 

By taking advantage of the Residential Energy Credits from the IRS, you can install solar panels, energy-efficient windows, heating and cooling systems, or even geothermal heat systems or wind turbines and be eligible for tax credits equaling 26% of your total costs.

Now that you are aware of the many great benefits you'll gain from being a first-time homebuyer, you can contact a real estate agent and get closer and closer to making your dream of homeownership a reality.

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