First Time Buyers

This is a historic time for new buyers to enter the market.  So many things are "in play" that make it an ideal time to enter the real estate market.  These include:

1. Historically low interest rates: Interest rates on a mortgage significantly impact the amount of your monthly payment.  Since interest rate on mortgages are at an all time low, hovering in the low 5%'s, this allows you to save hundreds on a monthly payment. Homes that were previously out of reach are now affordable.  If you compare this to mortgage rates that can be as high as 11% to 12% as they were in the 1970's, it gives you some perspective as to what a great deal this really is!

2. Home Pricing Down:  The days of sky-high and ever increasing real estate prices has come to an end, and the prices have declined dramatically over the past few years.  According to most economists, the bottom is near, and now is a great time to buy!  Lower prices allows you to buy a home that may have previously been too expensive.

3. Government Tax Incentives:  One of the major areas the government is trying to stimulate is the real estate sector.  They are doing this by offering a huge incentive to get first time buyers into the market.  If you have not owned a home within the last 3 years, you will recieve an $8000 tax credit on your 2010 tax return if you are to buy a home by May 1, 2010.   A tax credit means you get that money back, no questions asked!  It is an additional $8000 you will recieve on your tax return that does not need to be paid back.  You will finally look forward to doing your taxes!!

The House and the Senate passed legislation to extend the $8,000 home buyer tax credit to May 1, 2010, for first-time buyers and add a $6,500 tax credit for repeat buyers if they've lived in their home for five of the past eight years. Home prices are capped at $800,000. The Senate voted 98-0 and the House voted 403-12 on legislation that includes the extension and expansion of the credit. 

The legislation in both houses was included in a bill to extend unemployment benefits and is expected to be signed by President Obama shortly. 

“REALTORS appreciate the swift action by Congress to extend the home buyer tax credit and expand it to some current homeowners,” says NAR President Charles McMillan. “As the leading advocate of housing and real estate issues, we urge President Obama to sign this legislation into law quickly to keep the momentum going in the fragile recovery of the nation’s housing market.”

Under the bill, income limits are expanded to $125,000 for individuals and $225,000 for joint filers. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for reduced credits.

Households who have binding contracts in place by April 30 will be allowed an additional 60 days to complete their transaction. The deadline for members of the military serving out the U.S. for at least 90 days between Jan. 1, 2009, and May 1, 2010, has been extended one year.

Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a check. Taxpayers will be able to claim the credit on their 2009 income tax return for purchases made in 2010.