In theory one can use the 8k tax rebate as a down payment. I say in theory because I have not found a lender yet who will process this way. But assume this will work out should you use the money as a down payment? I think it depends.
If you are using USDA or VA I say no. Here is why. Assume the 8k as a down payment will save you about 10-15 dollars a month on a 30 year fixed. So at the end of year one you will have saved 120-180 dollars. But if you take the 8k at year end you could put it in a CD and make 10-15 dollars a month and HAVE 8k in case something comes up.
For FHA this may be the way to get to your 3.5 percent down and if that is the case this is a good thing. At the end of the day a Realtors role is to point out these things to you and maybe direct you to your accountant. With all the programs out there our role has become even more important
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Charlie Ragonesi All Mountain Realty Big Canoe and Mountain Blog
On line at www.allmountainrealty.com Call at 706 579 1098
Hi Charlie
Did I understand you correctly? You said the 8K could be used towards the FHA 3.5% down payment on a loan. I was under the impression that was not the case; the money could be used for all other fees (title insur., commision, title fees, ect) but not the 3.5% down. Maybe I misunderstood what you wrote or maybe I am misunderstanding the 8K credit. I have not done one yet so I am glad you are letting us know the banks could be an issue.
Charlie...
It's still up in the air ...who knows which way the $8K wind will blow tomorrow. We all need to stay tuned for more information!
Charlie: have they worked out exactly how this will work?
Hi Charlie:
I have yet to hear about a transaction that used the $8K as a down payment.
I've read that it will be allowed, then it won't, then it will...etc. etc.