If I Refinance, Will I Have to Repay the First Time Buyer Tax Credit?

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If you were a first time home buyer in 2009 or 2010, chances are you either heard or took advantage of the government’s $8,000 tax credit.

As you may or may not know, there were some stipulations that went along with the credit. You could not sell the property for at least three years and it had to remain your primary residence. When it comes to refinancing, however, homeowners are free to do so.

Here’s an excerpt from the IRS website:

“Generally, there is no requirement to pay back the credit for a principal residence purchased in 2009 or early 2010. The obligation to repay the credit arises only if the home ceases to be your principal residence within 36 months from the date of purchase. The full amount of the credit received becomes due on the return for the year the home ceased being your principal residence.”

With mortgage rates hitting new record lows, it may be worth your while to talk to a lender or broker about refinancing options.

For more information: http://www.irs.gov/uac/First-Time-Homebuyer-Credit-Questions-and-Answers:-Homes-Purchased-in-2009-or-2010

Steph Meyer is a contributor to the ForTheBestRate.com Blog and keeps us up to date on interesting happenings within the world of home financing and real estate. She’s got a quick wit and keen eye on making smart financial decisions. My Google Profile+

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