Buy Hugh's House Calculator

Using the Federal Home Buyer Tax Credit

News Flash: Believe it or not, we sold our house at 7.5% under our listing price. That may not sound too great until you realize we purchased the more expensive house we bought at 15% under the then reduced sales price, and more than 20% less than its original listing price. And the person who bought our old house most likely is a first time homebuyer who will receive the $8,000 tax credit, so I can honestly say Obama's stimulus package has helped me sell my house. So it has helped me, helped my buyer, the two realtors involved and helped everyone associated with the sale here in St. Louis. Now we can take the sales proceeds and spend some of the proceeds on our new house, and our buyer will receive his tax credit and will probably spend a bit making the house his own. More people buying houses and spending money in their local economy. That is what the stimulus package was supposed to do!

That is what President Obama and Congress intended when they passed the federal housing tax credit. The tax credit is $8,000 for any first time homebuyer or $6,500 for any repeat homebuyer who buy a house until April 2010. The state of Missouri also wants people to buy houses, and they are willing to give any first time buyer up to $6,750 up front to help buy it. You will have to pay the state back with your federal tax credit after you file your 2008 or 2009 taxes. The original 2008 $7,500 tax credit required repayment in $500 increments over 15 years, but the new credit will not require any repayment. The tax credits are fully refundable, which means if your tax liability is less than the credit, you receive the balance as a check.

Let's look at the bottom line numbers after you get your interest free loan. Since I know all the figures for our house all you need to enter is how much you want to put down, your interest rate (currently 4.75 to 5.75%) and your term (15, 20, 30 or 40 years). I am requiring a minimum downpayment of 3.5% (the FHA minimum) but you may be required to put 5% down if you do not qualify for a FHA loan.

Original Listing Price: $199,900
Final Sales Price: $185,000
Interest Rate
Term of Loan
Down Payment from Missouri$6,750
Down Payment from You
Total Down Payment $ 6,750.00 ( 3.649% )
Real Estate Tax$ 2,163
Home Insurance$ 800
Loan Amount$ 178,250.00
Monthly Principal/Interest$ 984.30
Monthly Tax/Insurance$ 246.92
Monthly PMI$ 74.63
Total Monthly Payment$ 1,305.84
Remaining Tax Credit To Receive$ 1,250

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