$7500 Federal Tax Credit First Time Home Buyer Minneapolis

Take advantage of this deal now! This only lasts under July 2009. The credit is for first time home buyers who are purchasing a home for $75,000 or more. Using this program is cash in your pocket. Right now this is important because the economy is in a crazy spot. In addition to getting this tax credit, when you purchase a home you get a lot of other tax deductions. You get to deduct the mortgage interest paid, property taxes, insurance, and repair or improvements to the property. This can save you a lot of cash. For example, say you purchase a home for $100,000. Your interest payments for the first year will be about $5460 on a 5.7% 30-year mortgage. Your yearly property taxes will probably be around $2500. Your yearly homeowners insurance will probably be about $1000. Say your tax rate is about 30%. Multiply the total of these numbers $8960, by your tax rate of 30% and you get $2688. This $2688 is the tax amount you don’t have to pay because of the deductions. This is an extra $224 in your pocket every month. On a $100,000 house your payment would be around $900 per month, which is about what you can rent a one or two bedroom apartment for in Minneapolis. With this tax savings it is actually cheaper, $900-224=$676 per month to own a home. So it makes sense to purchase a home if you are responsible. Check out the link below to the IRS website about this first time home buyer tax credit and let me know if you have any questions. Thanks a lot.

http://www.irs.gov/newsroom/article/0,,id=186831,00.html