Mark Slade - FirstTimeBuyer

PENALTY-FREE IRA WITHDRAWAL FOR FIRST-TIMERS First-time homebuyers are eligible to take $10,000 during their lifetime out of their Individual Retirement Accounts (IRAs) without paying the 10% penalty for early withdrawal. If yours is a traditional IRA, you will have to pay income tax on the money withdrawn. Roth IRA accounts are not subject to additional taxes as they are funded with money that has been taxed. Since the $10,000 lifetime amount earmarked for penalty-free withdrawal is for each individual, a couple could collectively withdraw $20,000 to pay for their first home. The money must be used within 120 days, though, or it becomes subject to the normal 10% penalty. OTHER HOMEOWNER TAX BREAKS s TheMortgage Interest Deduction. This is one of themost beneficial tax breaks that homebuyers can take advantage of, first-time buyer or otherwise. The IRS allows you to deduct from your taxable income the interest you pay to your lender. Home mortgage interest is one of the largest deductions for those who itemize. Lenders will report your mortgage interest on a 1098 form sent out annually. TheMortgage Interest Deduction is valid for loans up to $1million. Homebuyers receive a large benefit in the first years after buying, as the first repayments have the highest interest. To claim theMortgage Interest Deduction benefit, a homebuyer will have to file an itemized tax return. s Mortgage credit certification. The Mortgage Credit Certification is another program that helps thousands of first-time homebuyers secure a tax break.This IRS program is aimed at helping lower-income groups afford their first home. The MCC program is designed to offset a portion of the mortgage interest on a newmortgage to help homebuyers qualify for a loan. Because it is a tax credit and not a tax deduction, mortgage lenders will often use the estimated amount of the credit on a monthly basis as additional income to help the potential borrower qualify for the loan. Depending on the price at which you purchased your home, you can get back up to 30% of the interest you pay as tax credit. The program is administered by local authorities and can vary according to the state you live in. To qualify


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