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In previous posts we have referenced the "existing" homebuyer tax credit that was created with the expansion of the First Time Homebuyer Tax Credit late in 2009. We thought we would provide some additional details on how move up buyers can properly utilize this credit when using mortgage loans for their home purchase.

Current homeowners who have lived in the same home for five of the past eight years may be able to claim the credit upon the purchase of another home to be used as a primary residence. The amount of the tax credit is equal to 10% of the purchase price of the new home, with a cap of $6,500. The purchase contract on the new home must be dated between November 7, 2009 and April 30, 2010, and you must close by June 30th.Here are some details you may not know about the new credit:

• Purchasers are not required to sell their existing home to qualify for the credit, though they must show that the new home will be their primary residence. Declaring this new property as their homestead should do the trick.
• The maximum purchase price on homes eligible for the credit is $800,000.
• To claim the credit, buyers should complete the revised IRS Form 5405 available on the IRS web site http://irs.gov. They should also be prepared to provide a signed copy of their HUD-1 Settlement Statement, evidence of ownership of their current home for the required five-year period.
• The tax credit can be maximized as long as your Modified Adjustable Gross Income is less than $125,000 if you are single, and $225,000 if you are married filing jointly. The tax credit is phased out completely at $145,000 and $245,000 respectively.
• If you sell the new property within 36 months of purchase, convert it to rental property, or lose the house to foreclosure, you will have to repay the tax credit received.

With low mortgage rates still hanging around, just 14 weeks left to sign a contract, and five months to close on the home, get your sneakers on and start searching!