$8,000 / $6,500 tax credit
Remember the old $8,000 tax credit? Well, this is not last year's credit! The $8,000 credit has been extended through April 30, 2010. Actually, you have until June 30, 2010 to *close* on the transaction, though you must be under contract by April 30th.
Would you love to take advantage of this but can't -- because you've owned a home in the past? Well, not so fast. If you've been renting at least three years, that's long enough to be considered "first time" once again for this credit (and other programs as well).
And, new with this year's credit, you may qualify for a slightly reduced credit even if you are a homeowner! If you've owned a principle residence for five consecutive years (of the previous eight), you can sell it and claim the credit. For instance, if you've owned your current home for at least 5 years and want to move up, you can sell and claim the credit. If you owned a home for 5 years, then moved up three years ago to a different principal residence, retaining your old home as a rental -- you could sell that rental now and claim the credit.
There are still income limits, as with last year's credit, but they are more lenient. Up to $125,000 for single buyers (up from $75K), and $225,000 for married buyers (up from $150K).
As always, buy responsibly! You can now afford $8,000 more house (don't tell sellers! Let's hope they don't just raise their list price $8,000 :-) Consider the total monthly payment, including all your other bills, and leave a margin for error. Try to have at least 3-6 months' living expenses in savings. Avoid overextending (the classic case is a couple who buy at the absolute limit of both their incomes -- then one loses his job and they can no longer make the payments).
This is an historic opportunity to buy -- depreciated home prices, impossibly low interest rates, and a large tax credit to boot. If you take prudent advantage of this opportunity, you'll be safe from the foreclosure woes experienced by so many others.
