First-Time Home Buyer Credit Set to Expire
Buyers hoping to take advantage of the government's first-time homebuyer $8,000 tax credit need to be aware of the pending deadline of December 1, 2009. The purchase of a home must be totally completed by the deadline in order for a buyer to qualify for this credit. Since the process of selecting, purchasing, and closing on a home can take weeks, buyers still hoping to qualify for the credit will need to act quickly.
Over 1.4 million people have used the credit, which is 10% of the purchase price of a home, up to a maximum of $8,000. More information and details about the credit can be obtained at the web site: irs.gov/recovery
Some considering first-time home buying may be hesitating to make this move during some questionable financial times. If you want to be very conservative, yet still enjoy the advantages of home ownership, including this tax credit, here are some very good suggestions from Ron Lieber of The New York Times:
- Put 20% down - this will give you a cushion if prices should fall.
- Get a fixed-rate mortgage, so you don't get caught with unexpectedly greater house payments than you can afford.
- A very conservative rule is not to spend more than about 35% of your pretax income on mortgage, property tax, and home insurance.
- When considering how much home you can afford, don't forget to budget for the added expenses of home maintenance.