Are you Taking Advantage of the First-Time Home Buyer Tax Credit?
Submitted by G.E. Miller on Sunday, 27 September 200917 Comments
The First-Time HomeBuyer Tax Credit
The first-time home buyer tax credit is something that I wish would have been around when I purchased my first home. Not only are home prices lower now than they’ve been in a long time, but you get $8,000 to boot. Recently, there has been talk that it might be extended through at least the early part of 2010 (as of right now, you must close on the house before December 1, 2009).
The first-time homebuyer credit specifically targeted the demographic of readers of this blog. So, it begs the questions:
- Did you buy your first home this year? If yes, were you motivated by the credit?
- If you didn’t buy your first home this year, would you do it if the credit were extended?
- If you don’t plan on buying a home to get the credit, what are you waiting for?
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Given how precarious our financial situation is now, we decided that we’re never financing ANYTHING, EVER. So we’ll only buy a house if we can afford to do so without right. That’ll save us WAY more than $8K, even if we have to wait!
I think one should not really buy a house because of tax credit. If you think about, 8K is less than 5% on average 200K house. You probably can save more than 8K with better negotiation or spend 8K on minor house repair. So I would look for real need, real cost, and real risk of buying house rather than get entice with $8000.
I would never buy a house because of the tax credit, but I wanted to buy one this year and the tax credit would have been a bonus. However, I have yet to find the right place and am hoping they’ll extend the tax credit to next year.
There are several reasons to why now is a great time to purchase a house– tax credit, low interest rates, depressed home values. However, it still fundamentally comes down to, can you afford it? Do your cash flows adequately pay for the mortgage? Do you have a down-payment? Also, remember that jobs are a lagging indicator meaning that people will continue to lose jobs even as the economy rebounds, how secure is your job?
Here is a great article I found from CNN Money,
http://money.cnn.com/2009/02/13/real_estate/homebuyer_tax_credit_finalized/index.htm
I have voted for “Yes. The tax credit is great!” I this year will buy the house.For me it is an important reason
I voted yes too, although I probably wont be able to purchase this year.
Sadly, the tax credit has an income cut-off.
GE, I just replied to your email but it got rejected because your mailbox was full. I didn’t know how else to contact you to let you know so I resorted to a comment on your latest post.
Cheers,
Jim
I think the tax credit is a wonderful opportunity if you were already planning/are in a good position financially to purchase. My hubby and I are waiting to purchase a home. We’ve been married 3 years now we both are working and attend school and have not decided whether we will keep living in our current city or if we want to move somewhere else out of state. So we will not take advantage of this opportunity.
Hubby and I have decided that we will put 40-60% down on our home when we are ready to buy/build. Its quiet a large amount of money, but it was a good compromise for us. My hubby is not from the US, and expected to wait until we had 100% of the cash. Of course being from the US, I was thinking 3-20%. 40-60% turned out to be a sweet spot for us. We know its a very conservative move (definitely influenced by 2008)but it gives us a lot of freedom from worry. Our monthly mortgage payments will be low enough that it could be covered with only one unemployment check (the worst of bad scenarios).
I bought a home this year not because of the tax credit (although its a nice added bonus) but instead because interest rates are so low on 30yr fixed mortgages. I got a 4.5% – which makes my monthly payments low enough to rent the house out if I ever move and still make a bit of profit.
I wonder if more people might be interested in taking advantage of this tax credit and buying their first house if they new the steps to take?
I was reading some great stuff online at this site http://www.firsthomeexperience.com and thought others might enjoy the info too.
The tax credit is such a great equity kicker. Yes it is not substantial or life changing but do you rather get nil? 8k of guranteed built in equity does not sound bad.
Sadly i won’t be able to purchase this year but would surely try to look for it the next year. I vote my yes for it.
I’m a 32 year old single mom and have been with my company for 5 years. I took advantage of the first time home buyer credit and purchased a 100k older duplex with 3 bedroom, 2.5 bath and 2 car garage in the beautiful city of Frisco, TX.
Not only did I get the 8k credit to use towards furnishing and upgrading the home, I got a 5% interest rate and the added security of knowing my parents don’t have to bust their a**es anymore to pay a $1200 monthly rental on a crappy 2 bedroom apartment in Jersey.
This credit couldn’t have come at a better time!
It is definetely a great time to buy a home. I think many folks are making a wise decision and buying a home. However, just like any other purchase, make sure you buy right and get it for a good price. The tax credit can at least help you if the house falls in value.
thnks admin
Can anyone answer this question about the tax credit? We bought our house from my wife’s parents in May 2009. At this time the IRS didn’t specifically say you weren’t eligible for the credit if you buy a house from family. This rule was added more recently to combat fraud. If we can prove that we paid fair market value determined by two appraisals, can we still file for the credit?
Thanks for any help.
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