This is really great information to share with any first-time Virginia home buyers from We Are The R. Information is power!
A First-Time Homebuyer Savings Plan allows any Virginian to set aside up to $50,000 toward
the costs of closing on a new home. The earnings on those funds—interest and capital
gains—are free from Virginia state taxes.
These accounts are a great way for future homeowners to start saving early for the costs of buying
a home, such as a down payment, closing costs, inspections, lender fees, etc.—anything included
on the settlement statement. These accounts are simple and easy to set up. Not only can you open a new one, you can also
These accounts are simple and easy to set up. Not only can you open a new one, you can also
designate almost any existing account as a FirstTime Homebuyer Savings Plan. To create one, simply include a form when filing state taxes. (It will indicate that you should not be taxed on any earnings—e.g., interest or capital gains, because of the account’s FHSP status.)
After you or your beneficiary use the money toward closing costs on a first home, you simply send in another form to the Department of Taxation showing that the funds were used toward an “eligible cost.”
Saving for college is an investment in future earning potential.
Saving for a home is an investment in long-term wealth, stability, and well-being.
A ‘boomarang insurance plan’
As the cost of college tuition continues to rise, many graduates find themselves in considerable debt. This has become one of the largest obstacles for first-time homebuyers. In 2012, 60 percent of students graduated with debt averaging $26,500, according to College Board data.
The outcome: “boomarang kids.”
According to a Gallup poll released in early 2014, twenty-nine percent of adults younger than 35 in the United States are currently living with their parents.
Saving and planning ahead for the purchase of a home can help save thousands of dollars on living expenses down the road.
Not only will monthly mortgage payments be more predictable than fluctuating rental rates; the more
saved for a down payment on a home, the lower monthly mortgage payments are likely to be. Private
mortgage insurance (PMI) payments are also reduced or eliminated when a substantial down payment is made.
For more information on the First-Time Homebuyer Savings Plan and other useful home buying tips, visit www.WeAreTheR.com
WandaFears, Realtor ABR CRS GRI WCR
Richmond, Va. Long and Foster Realtors