Mortgage Updates

IRS is using advanced computer screening tools

to catch”illicit first time” home buyers. – My advice is don’t be one! The penalty can be up to three years in prison. So, free room and board? Hardly this comes with a stiff price tag, up to a $250,000 fine.

The $8,000 credit looks like easy money, and it is IF you are buying a house. IF you meet the first time home buyer qualifications; NO home ownership in the last three tax years. You also have to meet the income limitations, and certain other criteria. Previously posted information

The agency says it best- they are using "sophisticated computer screening tools to quickly identify returns that may contain fraudulent claims for the first-time home buyer credit."

If you do qualify, form 5405 is easy to complete. It can also be used to amend your 2008 tax return so that there is no need to wait until April to get your funds.

But, act now. The inventory of available homes is low and buyers are writing multiple contracts before they actually get one accepted. The Completion time frame for the loan, inspection and escrow process can take up to 60 days depending on the financing.

Most FHA transactions can close within 30-45 days. VA will be 45 -60. Since the deadline for this opportunity is November 30 for a closed purchase transaction if you’re a VA buyer you will need to be in contract by September 30. If FHA you’ve got until the middle of October. And, if you’re later than that – don’t blame your lender or realtor for your procrastination by missing the final closing date.