March 31, 2010

Tax Credit to help those Buying First Home!!!

In 2008 when the economy tanked one of the sectors to be hit the hardest was the real estate. When President Obama assumed office in 2009, the first thing he did was to start the first time home buyer credit to stimulate the economy. The program was initially for 2009 but now it has been extended until April 30, 2010. As per the guidelines, if you are one of those buying first home or have not owned a home during the past 3 years then you qualify for the $8,000 tax credit. There are other criteria that make home buyers qualify for the tax credit these include those that are upgrading to a bigger home after having lived in their primary residence for the past five years.

Now how does this program work? Does it really help the American economy? How does home sales affect/ benefit people other than the seller and real estate professional? Well there is a long winded explanation by banking professionals to these queries. The answer to all the questions is a resounding Yes.

Whenever a home is sold there are several things happening to the economy. According a research every sale adds approximately $60,000 into the local economy. I must agree with this because when a home is sold there are many people involved including the buyer, seller, real estate agent, banker/ mortgage professional, home inspector, title company, and home improvement firms, etc.

Naturally with every additional home sold many people get jobs and make some money. This will put the money back into circulation and thus spurring the economy. This tax credit program is really beneficial to the American people and the national economy.

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