Buy Now! Time is running out to take advantage of the $8,000 tax credit made available earlier this year through the American Recovery and Investment Act.
The real estate market has never been better for qualified buyers. When you factor in ridiculously low interest rates + low housing prices + the financial incentive from the government, it’s easy to see why right now = a great opportunity to invest in a home.
To receive the tax credit, a first-time buyer must purchase and close on a principal residence before Dec. 1, 2009. Since closing on a home generally takes anywhere from 45-60 days, that leaves buyers a short time to take advantage of the tax credit.
Another reason to buy now is the stabilizing real estate market. Last week, the National Association of Realtors announced that home sales increased in 39 states in the second quarter of the year compared to the first. Last month, the S&P/Case-Shiller index showed an increase in the monthly value of homes for the first time in nearly three years.
Buying a home might not only be the opportunistic thing to do but also the more practical decision. In many instances, renting is more expensive than owning. By choosing a fixed-rate mortgage, you can lock in to a lower payment that will stay the same--unlike rent which can increase yearly. And, consider that each mortgage payment builds your financial bottom line rather than your landlord's.
First-time buyers, as well those who haven’t owned a home in more than three years may be eligible to claim all or part of the tax credit based on their income level. Congress will even allow individuals to still claim the credit as part of their 2008 tax return if they file an amended tax return. Individuals can also elect to receive the credit on their 2009 tax return. As with any tax law, check with a tax advisor to discuss any specifics regarding the use of this provision.
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