Need Help with Down Payment?

This might be a solution…

Earned Income Tax Credit (EITC)

Here’s a link to the IRS Webpage about EITC: EITC on www.IRS.gov

The Earned Income Tax Credit (EITC) is a financial boost for lower income working people. You may qualify for the first time if your financial, marital or parental status changed in 2011. Eligibility is based on several factors, including the source and amount of your income, or combined income if married, whether you have qualifying children and how many. Workers without children also may qualify.

What is Earned Income?

Earned income includes all taxable income gained from working. To qualify for the EITC, a person must work full or part-time and have earned income during the year. If married and filing jointly, at least one spouse must work and have earned income.

Here’s a CNN Money article on EITC: EITC – CNN article

How can this help me with a down payment?

In 2011, EITC refunds averaged $2,240, according to the IRS. If you qualified for the tax credit you could use the refund to pay for all or part of the down payment required on an FHA loan. If you have already filed your 2011 taxes you can file an amendment.

Here’s an example: If your a family with 3 kids and you earned $49,078.00 you could get a refund for up to $5,751.00. That amount would cover the down payment or in other words, about half of the amount money you would need to close on a house priced at around $161,000 with an FHA loan. FHA requires that you have a 3.5% down payment. Depending on the seller and their situation you may be able to get the seller to help you pay for closing costs. Typical closing costs are: the loan origination fee, the mortgage insurance premium, appraisal, Hazard Insurance reserve escrow, Real estate Tax reserve escrow, title insurance fee, etc which total another 3.5% of the purchase price.

If your considering purchasing your first home , you can see that you may have to start planning and saving for that purchase. I would be happy to help you with your planning. I can explain the process and the different costs involved in more detail. So call me if you would like to get started. By the way, you as the buyer do not pay any of my commission, the seller does.