mortgage

Timeline for the homebuyer tax credit

Timeline for homebuyer tax credit
Highlights
  • To collect either tax credit, homes must be under contract by April 30.
  • "The first thing they need to do is make sure they can get a mortgage."
  • Insurance premiums on FHA loans increase after April 2.

Time is running short for people who want to take advantage of the homebuyer tax credits.

There are two homebuyer federal income tax credits: the first-time homebuyer tax credit of up to $8,000, and the move-up homebuyer tax credit of up to $6,500. Both come with deadlines.

To collect either tax credit, buyers have to have homes under contract by April 30. That means that buyer and seller must have signed the purchase contract by that date. After that, there's another deadline: The transaction has to close by June 30.

If you want to collect the tax credit, don't wait until the last half of April to begin looking for a house. Yes, it's possible that you could do it all in a couple of weeks: find a house that you like, negotiate a price and secure mortgage financing. Possible, but not probable.

"Don't wait till the last minute, and be prepared to stay on top of things from the very outset," says Neil Garfinkel, a lawyer with the law firm of Abrams Garfinkel Margolis Bergson LLP, on New York's Long Island.

Below is a timeline for homebuyers who want to complete the transaction on time to collect the federal income tax credit. The following dates aren't ironclad; the real estate agent, lender and title company will know if you need to deviate from this timeline because of your situation or location. Use this timeline as a general guide and as motivation to take action quickly.

Above all, let everyone -- from the lender to the seller to the inspector -- know about your deadlines.

Click on the synopsis for full details on what to do on that date.

Mortgage timelineApril 27April 15March 31Now - mid-MarchApril 30April 2Mid-MarchNow

 

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