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Consider this! America is offering generous incentives to taxpayers who will buy a home. As you read every word of this article you will discover why the government is offering first time home buyers an amazing incentive to buy a home. You will also learn four reasons why this may be the best time ever to enter the home buying market. President George W. Bush recently signed into law the Housing and Economic Recovery Act of 2008. This newest act for the weakened housing market is a reaction to the SOS being sent out by plummeting home prices. The Housing and Economic Recovery Act includes temporary tax incentives for first time home buyers. If you are a first time buyer you may qualify. One of the most intriguing features in this Act is the temporary tax credit for qualified first time home buyers. The $7500 tax credit amounts to a dollar for dollar reduction of what the taxpayer owes. If the taxpayer owes less than $7500 the government will send a refund check for the difference between what the taxpayer owes and the $7500 credit. Here are some of the details. The tax credit is for first time home buyers only. But don't quit reading simply because you owned a home in the past. The government has its own definition of first time home buyer. According to the government if you haven't owned a home 3 years prior to the purchase of your next home, you qualify as a first time home buyer. When you hear the government is offering a program like this, you might feel as skeptical as I did. Is there a catch? There is. Keep reading and by the time you reach the end of this article you will know what it is. My first question regarding the tax credit qualifications was what kind of home can I buy and still receive the credit? Can I buy a new home? The answer is yes. How about a resale home? The answer is yes again. I could feel myself getting pretty excited so I figured I'd better slow down and read more about it. The maximum credit amount is $7,500. The government wants to credit you $7500 for going out and buying a house. Why? Is it because they are a bunch of really nice people up there in Washington DC? That is a question I doubt I need to answer but in truth the House of Representatives and the Senate both have a method to their madness. Here is why this first time buyer credit is important to all of us and may be something you want to take advantage of. Homeowners are truly feeling the tight squeeze inflicted on them by the mortgage crisis. Real estate values have fallen. Credit has tightened. Homeowners and home buyers are having a difficult time obtaining mortgage loans. So Congress is motivating home buyers with incentives to stabilize our financial markets. The tax credit to first time buyers is one of those incentives. To qualify for this government incentive you need to act soon. The offer which began on April 9, 2008 is not open ended. For anyone buying a house, this limited offer ends July 1, 2009. Most likely we are seeing the formation of a bottom in the housing market. House prices may retreat a little more before we see an absolute national bottom. But in several cities and metropolitan centers, real estate values have remained steady. It is beneficial to be a first time home buyer today. First, home prices are low. You may never see such affordable housing again. Prices have slid for now but the fact remains that as long as the United States continues to grow and prosper, the value of our homes will increase over the long term. Second and unique to today's market, current mortgage rates are affordable. 1979 was another time I experienced a real estate crisis of this magnitude. The market conditions were very similar to today except for one thing. Interest rates were high. Many of us remember interest rates soaring to 18%. Compared to that market, today's interest rates are cheap. Third, the cost of homeownership becomes even more affordable for those who itemize income tax deductions. Fourth, to enlist home buyers, George W Bush is creating tax incentives. You can qualify for this tax credit up to the full amount if you are a single tax payer with an income up to $75,000. Married couples are allowed $150,000. But you can qualify for partial credit even if your income exceeds the limits. Okay if you're like me, I know you've been waiting for the catch. The incentive resembles a 15 year loan without interest being charged. Essentially the tax credit is a tax free, interest free loan from the US Government to help make buying a home more affordable. The only thing the government asks is that you return the money over the next 15 years or when you sell the house. Not a bad deal! As always, consult your financial adviser for more information regarding this program and your own personal financial situation. Good Luck.
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