First Home Buying Info

Looking for a Credit Card for Christmas Shopping? Before you submit a credit card application, first review the main points which will help you choose the right credit card for your needs.

What Charges You'll Make - If you're going to use the credit card mainly for booking airline reservations and hotels, it might be best for you to get a travel credit card that offers sky miles and hotel points or cashback. If this will be an emergency credit card only, then your main concern may be for a low interest rate credit card with low fees.

When You'll Repay Charges - Will you pay off credit card charges in full every month, or will you carry a balance month to month? If you're going to carry a balance, you want the lowest possible interest rate as well as a low introductory rate. But if you'll payoff balances in full every month, then interest rate really doesn't matter so no annual fee and/or a long grace period would be a bigger concern. If you're going to carry a balance, be concerned about how the finance charge is calculated. The most common method is the Average Daily Balance, which means that the daily balances are added together and then divided by the number of days in the billing cycle. Stay away from credit cards that compute the balance using two billing cycles, as this method costs more money in financing fees.

What Amount You'll Charge - If you're going to use the credit card for all your monthly expenses, then you need a card that has a high credit limit and a high cashback percentage.

More info about Interest Rates, Credit Limits, Incentives, Fees and Penalties

Interest Rates - The interest rate (Annual Percentage Rate) APR can either be a fixed rate or a variable rate that is tied to another financial indicator, most commonly the prime rate. With a fixed rate credit card you know what the interest rate will be every month, whereas a card with a variable rate can fluctuate. Of course, even the interest of a fixed rate card can change based on certain events, such as paying your credit card bill late, exceeding your limit, or simply because the credit card issuer decides to change it after providing you ample advance notice.

Credit Limit - This is the amount of money the credit card company will let you charge to the card. This amount varies depending upon the card offer and your credit history. Be sure to get a credit card with an ample limit, because getting close to your max can hurt your credit score. Just remember that you don't have to max out your limit just because it's available.

Incentives - To compete for and to gain customers, many credit card companies offer rewards. Even if you normally use cash, why not use your credit card and then use the cash to make the payment during the grace period? You still won't pay interest and meanwhile you'll rack-up rewards. A credit card with 5% cashback will earn you $5 for every $100 charged. If your total bills come to $2,000 per month, you'll earn a free $100 every month. Look for a rewards program that you'll use and which offers flexibility, such as cashback or travel.

Fees and Penalties - Compare common charges such as late fees, overlimit fees, balance transfers, cash advances, and for making payments by telephone. Regarding balance transfers, look for credit card offers with no transaction fees and zero percent interest for at least 12 months.

Affiliate Program

» Articles » News » First Home Buying Info

Credit Federal

Personal loan and credit card resource serving millions of good and bad credit U.S. consumers.

View all news by Credit Federal...

First Home Buying Info

By Credit Federal | Published 02/24/2009

Planning to Buy Your First Home? For a home loan, click here.

If you are considering buying your very own home for the first time, take advantage of the Housing and Economic Recovery Act of 2008 which outlines a new tax credit. This credit is available for a limited time and is for purchases after April 8, 2008 and before July 1, 2009.

Here are the Important points of the credit:

*Applies to home purchases after April 8, 2008, and before July 1, 2009.
*Reduces a taxpayer�s tax bill or increases his or her refund, dollar for dollar.
*Is fully refundable, meaning that the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax that they owe.

The credit operates like an interest free loan and must be repaid over a 15 year period. If an eligible taxpayer buys a home today and claims the maximum available credit of $7,500 on his or her 2008 federal income tax return must begin repaying the credit by including 1/15 of this amount, or $500 on the 2010 return. Tax payers claim the credit on new IRS Form 5405. This form and instructions on claiming the first-time homebuyer credit will be included in 2008 tax forms and instructions and be available later this year on IRS.gov, the IRS Web site.

Only the purchase of a main home located in the United States qualifies and just for a limited time. Vacation homes and rental property are not eligible. The purchase must be after April 8, 2008, and before July 1, 2009. For a home that you construct, the purchase date is the first date you occupy the home.Taxpayers who owned a main home at any time during the three years prior to the date of purchase are not eligible for the credit. This means that first-time homebuyers and those who have not owned a home in the three years prior to a purchase can qualify for the credit.

If you make an eligible purchase in 2008, you claim the first-time home buyer credit on your 2008 tax return. For an eligible purchase in 2009, you can choose to claim the credit on either your 2008 (or amended 2008 return) or 2009 return. The credit is 10% of the purchase price of the home, with a maximum available credit of $7,500 for either a single taxpayer or a married couple filing jointly. The limit is $3,750 for a married person filing a separate return. In some cases, the full credit will be available for homes costing $75,000 or more. Whatever the size of the credit a taxpayer receives, the credit must be repaid over a 15-year period.

The credit limit is reduced or eliminated for higher-income taxpayers. The credit is phased out based on your modified adjusted gross income (MAGI). MAGI is your adjusted gross income plus different amounts excluded from income, like for example certain foreign income. For a married couple filing a joint return, the phase-out range is $150,000 to $170,000. For other taxpayers, the phase-out range is $75,000 to $95,000. The full credit is available for married couples filing a joint return whose MAGI is $150,000 or less and for other taxpayers whose MAGI is $75,000 or less.

Share this Financial Article with a Friend - click here

Webmasters: Free Financial Content for Your Website!

Multiple ways to use our financial content:

1) You can use our RSS Feeds for automatic insertion and updates

2) You can simply link to this article

3) You can copy/paste the HTML code below (do not remove any links).

First Home Buying Info - by <a href=http://creditfederal.com>CreditFederal.com</a> <div style="text-align: left; font-family: Verdana;">Planning to Buy Your First Home? For a <a target='_top' href="http://creditfederal.com/home-loan.html">home loan, click here</a>. If you are considering buying your very own home for the first time, take advantage of the Housing and Economic Recovery Act of 2008 which outlines a new tax credit. This credit is available for a limited time and is for purchases after April 8, 2008 and before July 1, 2009. Here are the Important points of the credit: <ul style="color: rgb(25, 25, 112);"><li>*Applies to home purchases after April 8, 2008, and before July 1, 2009. </li><li>*Reduces a taxpayer�s tax bill or increases his or her refund, dollar for dollar. </li><li>*Is fully refundable, meaning that the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax that they owe. </li></ul> The credit operates like an interest free loan and must be repaid over a 15 year period. If an eligible taxpayer buys a home today and claims the maximum available credit of $7,500 on his or her 2008 federal income tax return must begin repaying the credit by including 1/15 of this amount, or $500 on the 2010 return. Tax payers claim the credit on new IRS Form 5405. This form and instructions on claiming the first-time homebuyer credit will be included in 2008 tax forms and instructions and be available later this year on IRS.gov, the IRS Web site. Only the purchase of a main home located in the United States qualifies and just for a limited time. Vacation homes and rental property are not eligible. The purchase must be after April 8, 2008, and before July 1, 2009. For a home that you construct, the purchase date is the first date you occupy the home.Taxpayers who owned a main home at any time during the three years prior to the date of purchase are not eligible for the credit. This means that first-time homebuyers and those who have not owned a home in the three years prior to a purchase can qualify for the credit. If you make an eligible purchase in 2008, you claim the first-time home buyer credit on your 2008 tax return. For an eligible purchase in 2009, you can choose to claim the credit on either your 2008 (or amended 2008 return) or 2009 return. The credit is 10% of the purchase price of the home, with a maximum available credit of $7,500 for either a single taxpayer or a married couple filing jointly. The limit is $3,750 for a married person filing a separate return. In some cases, the full credit will be available for homes costing $75,000 or more. Whatever the size of the credit a taxpayer receives, the credit must be repaid over a 15-year period. The credit limit is reduced or eliminated for higher-income taxpayers. The credit is phased out based on your modified adjusted gross income (MAGI). MAGI is your adjusted gross income plus different amounts excluded from income, like for example certain foreign income. For a married couple filing a joint return, the phase-out range is $150,000 to $170,000. For other taxpayers, the phase-out range is $75,000 to $95,000. The full credit is available for married couples filing a joint return whose MAGI is $150,000 or less and for other taxpayers whose MAGI is $75,000 or less. </div> This article provided courtesy of <a href=http://creditfederal.com target=_new>www.CreditFederal.com</a>, a personal credit resource of good or bad credit credit cards and loans.

Credit Tip: Need a high limit for Christmas credit card charges? If you have bad credit, consider a personal loan by refinancing your mortgage. Even if you have cash to buy Christmas presents, we recommend using a prepaid card to make purchases because it's safer than carrying cash.