You have 22 days left to buy a house
Is getting the homebuyer tax credit worth rushing your purchase? Maybe and maybe not.
But should you feel pressured by that deadline?
If you’re already looking for a house and you find the house you want in time, it makes sense to try to lock in a deal by the April 30 deadline for the credit, which is 10% of the purchase price or up to $8,000. But if you haven’t started looking or you don’t find a house you love in time, remember that a tax credit is just one piece of the financial puzzle you’ll need to solve to decide when (or whether) to buy a home.
“If, absent the tax credit, you wouldn’t make that purchase, don’t do it just to save a few thousand dollars,” John Scherer, a certified financial planner and president of Trinity Financial Planning in Middleton, Wis., told SmartMoney.
- Video: Tax credit deadline
Pros: Low interest rates that are likely to rise and affordable prices make now a good time to buy.
Cons: An $8,000 tax credit is just a 4% discount on a $200,000 house. Sellers who know buyers are pressed by a deadline may be less inclined to negotiate, prices could fall still further -- and if you buy a house and it doesn’t remain your primary residence for the next three years, you’ll have to pay the credit back.
Remember that it’s already too late to try to purchase a short-sale home and expect to get the credit.
Will the credit, which was originally set to expire in November 2009, be extended again? Your crystal ball is as good as mine.
“Even if Congress allows the credit to expire, don't think that's the end of the tax credit game,” he wrote. “It could very well be brought back again in a few months as sales and prices slump again.”
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