Are you tired of making your landlord rich? Can you and your significant other, save $60 per check every other week for 2 years? Are you or your children first time home buyers in Virginia?
Then simply put, Virginia's new First-Time Homebuyer Savings Plan is a game-changer! I have done the math, and it goes like this: Say you and your spouse have recently moved to, and started working in Northern Virginia. The only thing is, you have come from the mid-west, and are shocked and awed by the rising home prices, but do not want to continue to write checks to your creepy landlord indefinitely. You have eyed a modest single-family home in Bealeton, or a two-level townhome in Manassas, as equal distance commuting options.
For two years,you work hard to pay off bills, improve credit, and attempt to avoid the financial treadmill effect here in Virginia. You, along and your sweetie, and with $916 pre-tax help from your Uncle Ernie, could save the 3.5% down payment, that FHA requires on a $250,000 home, and do it pre-tax. That would be $8750, not including the interest you made on your investment. So you say your savings account, is not making you enough of a return? Then spread the love and the risk, with a "Cul-de-sac Fund".
Simply designate those accounts as your First-Time Homebuyer Savings Plans, when you file your Virginia taxes,and assuming you do not invest in anything too risky, those funds along with interest will be there, when you close on your home in the Summer of 2016. While I am a Realtor, and not a financial advisor, assuming you pay down those bills, receive a modest return on your investment, and are able to get approved for the home loan, this is a great opportunity for First-Time Homebuyer's in Virginia. Federal income tax on investment may exist, consult a tax professional or financial advisor.