How to Maximize the Value of $8000 First Time Home Buyer"s Stimulus Tax Credit
To maximize the value of your $8,000.
00 tax credit as a First Time Home buyer you must think of the best use of it.
Consult with your accountant to get the exact tax deduction you could get base on your income and your mortgage interest.
Even if you are qualified doesn't mean you can take the full amount.
Here are some other ideas where to put that $8,000.
00 for maximum benefit: 1.
PAY DOWN YOUR MORTGAGE - Let say you have a principal balance of $300,000.
00 on a 30 year mortgage with 5% interest rate, when you apply $8,000.
00 tax credit or refund to your mortgage it would decrease your mortgage payment by 21 months and you will save approximately $25,492.
74 in interest.
Do it every time you receive your yearly tax refund, even in varying amount, can easily pay off your mortgage in 14-16 years.
But, before you send that money to your Lender make sure you double check your mortgage contract about any pre-payment penalty.
2.
PAY OFF YOUR CREDIT CARD - Use your tax refund to pay off your highest interest baring credit card balance.
This will help you have more cash flow by saving money on the interest and by eliminating your monthly payment.
Once your credit card has zero balance you can use it again and again.
Remember, if you always pay your balance in full before or within 30 days you will not be charge any interest on that money you borrowed.
It doesn't matter, now, if you have 24% interest or 5% interest rate because you're not paying any interest anyway.
This will also help you look great on your credit ratings.
3.
MAKE AN ADDITION TO YOUR NEW HOME- Any addition or improvement in your new home will help increase the value and give you instant equity.
Example: additional bedroom, bathroom, finishing the basement or remodeling your kitchen.
With this idea you need to consult a professional remodeling/construction company.
4.
WINTERIZE YOUR HOME - Your windows and doors can cost you a lot of electric bills, about 35 - 40% amounts from heating and air-conditioning, on winter and summer, if it's not made of double panel or winterize materials.
This would help you save a lot of money for years to come.
Now that you have some simple ideas it is totally up to you where to use that extra money.
00 tax credit as a First Time Home buyer you must think of the best use of it.
Consult with your accountant to get the exact tax deduction you could get base on your income and your mortgage interest.
Even if you are qualified doesn't mean you can take the full amount.
Here are some other ideas where to put that $8,000.
00 for maximum benefit: 1.
PAY DOWN YOUR MORTGAGE - Let say you have a principal balance of $300,000.
00 on a 30 year mortgage with 5% interest rate, when you apply $8,000.
00 tax credit or refund to your mortgage it would decrease your mortgage payment by 21 months and you will save approximately $25,492.
74 in interest.
Do it every time you receive your yearly tax refund, even in varying amount, can easily pay off your mortgage in 14-16 years.
But, before you send that money to your Lender make sure you double check your mortgage contract about any pre-payment penalty.
2.
PAY OFF YOUR CREDIT CARD - Use your tax refund to pay off your highest interest baring credit card balance.
This will help you have more cash flow by saving money on the interest and by eliminating your monthly payment.
Once your credit card has zero balance you can use it again and again.
Remember, if you always pay your balance in full before or within 30 days you will not be charge any interest on that money you borrowed.
It doesn't matter, now, if you have 24% interest or 5% interest rate because you're not paying any interest anyway.
This will also help you look great on your credit ratings.
3.
MAKE AN ADDITION TO YOUR NEW HOME- Any addition or improvement in your new home will help increase the value and give you instant equity.
Example: additional bedroom, bathroom, finishing the basement or remodeling your kitchen.
With this idea you need to consult a professional remodeling/construction company.
4.
WINTERIZE YOUR HOME - Your windows and doors can cost you a lot of electric bills, about 35 - 40% amounts from heating and air-conditioning, on winter and summer, if it's not made of double panel or winterize materials.
This would help you save a lot of money for years to come.
Now that you have some simple ideas it is totally up to you where to use that extra money.
Source...