Homeownership has many advantages, including tax benefits and the ability to build equity. And now, current market conditions make purchasing a home an even more attractive option than ever before.
In fact, a report earlier this month showed that the National Association of Realtors’ Housing Affordability Index rose in April to the second highest monthly reading on record. That means homes are more affordable now than at almost any other time. What’s more, the limited-time $8,000 first-time buyer tax credit makes purchasing a home an even better deal.
Those considering a move from renter to homeowner should keep these factors in mind:
- Length of ownership: How long do you plan to own your new home? Because of the costs associated with a home purchase, buying now could be a great choice if you plan to own the home for at least five years.
- Cost: How much should you spend? Contact a mortgage professional to find out your price range, and then crunch the numbers so you don’t buy a home that is more than you can afford.
- Quality of life: In addition to greater median wealth compared to renters with comparable incomes, research shows that homeowners have better physical and psychological health, as well as higher life satisfaction and self esteem.
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Don’t forget that the $8,000 tax credit is available only if you close before December 1, 2009 – that might be sooner than you think given that you should allow enough time to find the perfect home and then 60-90 days for everything that needs to happen between contract and close.
This $8,000 tax credit does not need to be repaid. Combined with historically low interest rates and more affordable home prices, the tax credit has made the decision to purchase real estate an easy choice for many buyers.
Review the following information to see if you are eligible to take advantage of the tax credit:
- The home purchase closed/will close on or after Jan. 1, 2009, and before Dec. 1, 2009.
- The home is being used as a principal residence.
- You have either never owned a home, or have not owned a home in the last three years.
- Your modified gross income is less than $95,000 for single tax payers or $170,000 for married filers.
An additional bonus: you can now take advantage of a Federal Housing Administration program to allow qualified home buyers to apply the credit as a downpayment when purchasing a home. This is possible through a short-term bridge loan that will let qualified home buyers use the tax credit to either make a larger downpayment above the FHA required 3.5 percent, cover closing costs, or buy down their interest rate.
Contact me at www.Basking-Ridge-Real-Estate.com for additional information.
