Things always seem to come down to the last minute.
The $8000 First-Time Home Buyer's Tax Credit, set to expire on November 30, 2009 has been extended. 1st Time buyers now have until April 30, 2010 to sign contracts on their new home and have 60 days beyond that to close the transaction.
BUT WAIT, THERE'S MORE
In addition to the extension, the program has now been expanded to include "move-up" buyers. As long as you have occupied your current home for 5 of the last 8 years, you are also eligbile to apply for a tax credit. It's a little less, capped at $6,500 instead of $8,000 but hey - it's nothing to sneeze at. The following is a summary put out today by the National Association of Realtors. If you want to explore this further, speak with your lender.
BUT WAIT, THERE'S EVEN MORE!
Yup - one more thing. In a separate measure Congress has also passed an extension - through 12/2010 of the new higher limits on conforming loans.
You can read the definition of Conforming Loans and Jumbo Loans for more detail, but the bottom line of it is that better interest rates are typically available on conforming loans than on jumbo. By raising the limit for conforming loans, it enable more folks to get better interest rates on larger loans. This is good!
THE DEBATE!
There's been a lot of discussion in the Real Estate community as to whether extending and expanding these programs is good for the economy in the long term.
There are those who feel that it will provide a "false" feeling of improvement if people buy up houses over the next several months for the tax break. The feeling is that when it ends, we could move back to a very slow market.
Those in favor of it feel that getting people moving into new homes could very well be the impetus needed to jump start the economy. When people move, there is a lot of cash pushed into the economy in the form of moving costs, renovations, furniturepurchases , hiring of contractors - etc. So it may be that things will be better BECAUSE of the temporary burst in home sales that is expected.
Whichever side you fall intellectually on is moot at this point. The extension is here and if you've been thinkikng about buying a house - buy one, while the program is on. This is one more low-pressure system in the Perfect Storm for Home Buyers.
