First Time Home Buyer Programs Ready to Buy Your First Home? To buy a house, you’ll need to start saving money for the closing costs and a down payment. My First Texas Home is a Taxable Mortgage Program (TMP Program 79) offering mortgage loans at more competitive, fixed, low interest annual percentage rates with down. Low rates and a huge range of mortgages for Lake Travis, Austin, and all of Texas. First Time Home Buyer Programs in the Dallas Fort Worth area of Texas are available with LOW or No Down Payment Required in all cities such as Frisco, McKinney. First-time home buyer loans, tax credits and education by your state. Find the home buyer assistance programs in your city and state. First time home buyer program, tax credits and grants are available to those who qualify. With the mortgage crisis of recent years, lending standards have tightened dramatically. First time home buyer loans are more difficult to obtain than they were just. ![]() What Deductions Can a First- Time Home Buyer Make? The most common deductions are for mortgage interest, mortgage points and property taxes. To claim these you will have to use Schedule A, and your total itemized deductions will have to exceed the amount of the standard deduction ($5,9. Other possible tax benefits for home buyers include mortgage interest credits, energy credits, sales- tax deductions and exemption from IRA early withdrawal penalties. Mortgage Interest. For most home buyers, the biggest deduction in the first years will be for the mortgage interest you pay during the tax year. You can claim a deduction on the interest for up to $1 million in home debt, or up to $5. Include any prepaid mortgage interest you paid at closing to cover the first partial month of interest. Your lender should send you a Form 1. Mortgage Points. You also can deduct the amount you pay for mortgage points that reduce your interest rate. ![]() Mortgage points are sometimes referred to as loan origination fees, maximum loan charges, loan discounts or discount points. Even if the seller agrees to pay the points for you as part of the deal, you can still claim them as long as you paid at least that much toward the equity of your home that year. If you paid for points, you should be able to find that amount on the Form 1. Property Taxes. Property taxes paid on your house also are deductible from taxable income. This deduction covers taxes only for the period you actually own the home. You cannot claim back taxes that you paid off as part of the purchase arrangement. But you can claim any amount you paid the sellers to reimburse them for property taxes they had prepaid in advance. ![]() ![]() Also, you cannot claim a deduction for local assessments that pay for direct improvements to your home, such as the installation of sidewalks or sewage lines. Mortgage Interest Credit. The federal Mortgage Tax Credit allows qualified lower- income home buyers to deduct some or all of their mortgage interest payments from the amount of income tax they owe. This credit is limited to mortgage interest on the first $1. You must get a Mortgage Credit Certificate from your state or local government before buying your home to qualify for the credit. If you do claim the credit, you must deduct the amount of the credit from any mortgage interest you claim as a deduction. Energy Credits and Exemptions. There are several federal, state and local tax credits available to people who buy certain energy- efficient homes or who make energy- saving improvements to their home. You can get a dollar- for- dollar federal tax reduction up to 3. California residents also can apply for a property tax exemption equal to the value of solar energy systems they install in their house. Various local governments also offer incentive programs. Sales Taxes. If you paid enough sales taxes on a mobile home, prefabricated home or house boat, you may want to deduct state and local sales taxes instead of state and local income taxes on your Schedule A. The same applies if you paid sales taxes on materials used to build your home. You can find out your maximum sales tax deduction using an online calculator at the IRS website (see Resources). IRA Penalty Exemption. You can avoid the 1. IRS funds if you use the money toward the purchase of a home within 1. Each spouse can withdraw up to $1. IRA funds without penalty. To qualify, neither you nor your spouse can have owned a home within the past two years. Home Improvements. If you make improvements to your home when you buy it, keep good records of how much you spend, Although you won't get any deductions for the improvements (except for certain energy- saving improvements), you can add the cost of the improvements to the value of your home. This may help you later if you claim depreciation for the business use of your home or if you have to pay taxes on the profit from the sale of your home. First- Time Home Buyer Credit. The federal First- Time Home Buyer Credit, which gave up to $8,0. It is not available for 2. About the Author. Alan Sembera began writing for local newspapers in Texas and Louisiana. His professional career includes stints as a computer tech, information editor and income tax preparer. Sembera now writes full time about business and technology. He holds a Bachelor of Arts in journalism from Texas A& M University. Photo Credits. Jupiterimages/Brand X Pictures/Getty Images.
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