The White House has just provided even more incentive for renters to buy real estate this year. Interest rates are already at their lowest rates ever, most cities have more real estate selection than ever, sellers are desperate and have drastically dropped prices, and for the icing on the cake you will receive $8,000 as a direct tax credit just for buying a home as a first time home buyer.
The tax credit will have an immense effect to encourage buyers for the US real estate economy and will help the struggling economy to heal. It reduces the risk out of buying real estate in markets that may still have potential to go down in value, as the credit will supplement eight grand of potential value decline with the biggest government home buying incentive ever.
Home buyers can qualify for this stimulous money that meet these guidelines:
* The credit is only granted to up to 10% of the homes purchase price.
* This Tax Credit is available for single wage earners who make less than $75,000 per year and married wage earners who make less than $150,000 per year. People with more income may qualify for a lesser credit.
* The classification for First Time Buyers if they haven't owned real estate for more than three years.
* The credit has to be paid back at sale of home if home is sold before 2012.
* Applies to real estate purchased between January and December 1st.
To realize the value of the tax credit, lets look at what $8,000 would do if it will be used to pay down the loan value.
If you purchased a $160,000 house with a $10,000 down payment, giving you a loan total at $150K. With an incredibly low interest rate at 5% (which is currently realistic), you would have a p&i payment of $805.23 on a 30 year mortgage. Not a bad payment for a home loan.
Over the length of the loan you would pay $139,884.83 towards Interest. Now if you hurried and purchased a new home now, and qualified for the $8,000 tax credit this year, and immediately used that $8,000