VA Offers Savings Plan For First Time Buyers
Posted 08/19/2014 by admin
This innovative platform lets parents and grandparents assign savings or investments for a child’s future home purchase, just as they would in the age-old “college fund” concept. Investments into the plan can grow up to $150,000—a pretty nice nest egg to start house hunting with. The program allows parents and guardians or other relatives to set money aside and allow it grow without being taxed—another very attractive perk.
First-time Homebuyer Savings Plans in Virginia are similar to a likeminded program in Montana, but unlike its counterpart, the Virginia plans do not require applicants to open any special account at financial institutions. Those interested in First-time Homebuyer Savings Plans need to complete a form every year as soon as they file their state income taxes. So, those who try to use the appointed account for anything else other than buying your first home will be fined and subject to back taxes.
The program is still new and will soon be promoted to homebuyers and financial organizations across the final summer months and fall of 2014. While this is excellent news, it won’t help people who are already in the market now for a home today, as it is a financial instrument for future home investments. Again, as a parent or grandparent you wouldn’t know if the child you’re saving for would be interested in buying a home in Virginia versus a different state in the long run—this could cause an issue, but it’s one that will have a resolution once the program comes a little further out of its “beta testing” phase.
Overall, the First-time Homebuyer Savings Plans is a progressive tool that is likely to inspire other states and lenders to hop on board, with the hope of making home buying enticing to the next generation.
Source Material: Washington Post