First-Time Home Buyer
It’s really easy to look at the term “first-time home buyer” and think, “Well duh, that’s a person buying a house for the first time.” And yes, that is one of the types of buyers that is considered a first-time home buyer by HUD, the U.S. Department of Housing and Urban Development. (Whew, we can see why they just call it “HUD.” That’s a mouthful.)
Anyway, a person who has not bought a primary residence within the last three years is also considered a first-time home buyer. And we say “primary,” because rental homes and Flip or Flop-type real estate purchasing scenarios don’t count. In addition, single parents or otherwise displaced people who lived in a house owned with or by a spouse are first-time home buyers, as are people who own property that isn’t up to code and can’t feasibly be brought up to code. Mobile home owners, or anyone who owns a residence that isn’t attached to an actual foundation, are also considered first-time home buyers.
In other words, the term “first-time home buyer” is, like baking a souffle, a lot more complicated than it appears on the surface.
So why are these details so important? Because first-time home buyers are eligible for all kinds of grants, tax incentives, and other government programs that can help them buy a new home. FHA loans, offered by the Federal Housing Administration, often come with little goodies like lower closing costs, smaller down payments (like, say, 3% versus 10%, which can be yuuuge), and decent interest rates. So even if we’re not in the market to buy our first house ever, it’s worth finding out if we’re still considered a first-time home buyer.
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Finance: What is a Mortgage?345 Views
Finance allah shmoop shmoop What is a mortgage Well people
a mortgage is just dead it's alone but one with
special tax treatment For most people simply put Any interest
you pay on a mortgage to buy a home is
tax deductible Morty morton's inputs down a hundred thousand bucks
to buy a home that costs four hundred big ones
his mortgages three hundred grand at five percent interest per
year So that's fifteen thousand dollars a year he pays
to rent the money from the bank which he uses
to buy his dream home with the loop de loop
waterslide Morty earns one hundred grand a year and pays
tax on his last fifteen thousand of earnings soas faras
The irs is concerned since morty can deduct his fifteen
thousand dollars in interest against his earnings he does not
in fact earn taxable wages of one hundred grand annually
Instead he earns taxable wages of eighty five thousand dollars
a year Essentially with government is doing is sharing in
some of the cost of renting the money Taub i'm
ortiz home well why would the u s government be
so charitable Well because home ownership has been integral part
of the american dream since the u s of a
i po'ed in seventeen seventy six easy access to mortgages
and then home buying can be a hugely beneficial asset
In the vast majority of cases homes create family stability
a store of wealth and tax dollars for local schools
in the form of real estate taxes So don't feel
bad about splurging on that water slide there Morty Just 00:01:42.93 --> [endTime] remember you're doing it for the kids Hello
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