Reports say the home sales dropped in January, but many are holding onto the home that the first-time homebuyer tax credit will promote more home purchases as the deadline for the tax credit nears. The first-time homebuyer tax credit rules state that a homebuyer must be under contract on a home by April 30th and must close by June 30th to qualify.
Home sales are suffering due to possible home price drops and many fearing that they may buy a home and find that, in the near future, they have an underwater mortgage, meaning they owe more than their home is worth. However, these fears by a few are not stopping many individuals who are using the tax credit, along with other incentives, to buy an affordable home.
Many homebuyers are using the first-time homebuyer tax credit and taking advantage of low interest rates currently offered, as well as low home prices, to buy a home that is more affordable than renting. For those who qualify for a low interest rate on a mortgage they are finding that mortgage payments are at or around apartment prices and with the tax credit incentive, many homebuyers are looking to move into a home quickly.
Home prices, while not drastically low, are more affordable due to the rash of foreclosures and defaults that have left many homes sitting empty. These factors are making owning a home more of an attainable goal for many people, but if you are looking into buying a home for one or all of these reasons, first be sure that making a mortgage payment is within your financial means and buying a home is in your best interest.