TIME IS RUNNING OUT: First-time home buyers must have a property under contract by April 30 to enjoy their $8,000 in free government money.
Congress has already extended and expanded the $8,000 first-time home buyer’s tax credit once, and it’s unclear that lawmakers have the appetite to do so again. So if you are still considering buying a home, you now have about two months left to scoop up thousands of free dollars.
This is a great deal for buyers, but many of them aren’t quite ready to act. Here’s why they should:
1) First-time buyers (who earn up to $125,000 as a single person or $225,000 as a couple) can get $8,000 back on their taxes. This is free money, one of the primary ways the government is helping regular people rather than banks and other corporations. Buyers who have already owned homes can now qualify for a $6,500 tax credit if they purchase a home they intend to occupy.
2) Interest rates are phenomenally low right now. I just had a buyer lock in a rate of 4.83% on a 30-year loan! But we will not see rates of 5% and below for much longer, because the government has already announced its intention to stop buying the mortgage-backed securities that are keeping rates artificially low. Many experts predict mortgage rates will rise half a point to a full point this year, beginning at the end of March.
3) There are tons of real estate bargains out there right now. More foreclosures are hitting the market, holding down prices across the board, and even new condo developments in trendy neighborhoods like River North, Gold Coast, Streeterville, West Loop and the South Loop have seen dramatic price reductions in an effort to attract buyers.
Remember, to qualify for the tax credit you must sign a contract to buy the home by April 30 and close by June 30.
