If your grown children are thinking of taking advantage of the best buyers' market in years, perhaps you are considering assisting them. There are several reasons why now is a great time to help your child realize his or her dream of homeownership.
Home Buyer Tax Credits
First-time home buyers are eligible for up to an $8,000 tax credit. Current home owners may be eligible for a tax credit up to $6,500. The IRS has issued new regulations saying that under certain circumstances, even if a parent co-signs on the home loan, the buyer can collect the credit.
Low Interest Rates
We continue to see historically low interest rates. While the Red has pledged to keep them as low as possible, it is inevitable that rates will creep up over the next several months. Low interest rates give you and your child greater purchasing power. When interest rates go up a percentage point or two, purchasing power is decreased by as much a $100,000.
Great Selection of Homes
As 2020 gets underway, pent up inventory will enter the market, creating a wiser selection of affordable homes to choose from.
No Tax Consequences for You
Under current tax law, an individual can gift up to $13,000 each year to any individual with no taxable consequences to anyone. If you and your spouse gift to your child and his or her spouse, that gift can total $52,000 - a sizeable down payment.
For more information abut helping your child become a homeowner, please contact me anytime.