First-Time Homebuyer

What it is:

A first-time homebuyer an individual or couple purchasing a home for the first time. The IRS also considers someone who has not owned a home in the past two years to be a first-time homebuyer.

How it works/Example:

First-time homebuyer status entitles individuals to certain privileges, like the right to use an early withdrawal from an individual retirement account (IRA) to put toward the purchase of home.

An individual or couple who holds an IRA or Roth IRA and is purchasing their first home is allowed to withdraw a penalty-free distribution if the purchase occurs prior to the minimum distribution age (59 ½).

[For more on this, see 5 Safe Ways to Tap Your Roth IRA Before You Retire]

In the recent past, first-time homebuyers have also received special tax credits and deductions, though the programs are not permanent.

Why it Matters:

A first-time homebuyer is eligible to receive penalty-free, early distributions from their IRA or Roth IRA if they are to use the funds towards a primary residence (usually towards a down payment or closing fees). If a first-time homebuyer is to take an early withdraw from a Roth IRA, they may not have to pay taxes on the earnings as well. See the IRS publication for more details. 

Best execution refers to the imperative that a broker, market maker, or other agent acting on behalf of an investor is obligated to execute the investor's order in a way that is most advantageous to the investor rather than the agent.