Eligible first-time home buyers can receive up to an $8,000 tax credit, while eligible repeat buyers can receive up to $6,500. A first-time home buyer is defined as someone who has not owned a principle residence in the last 3 years. Repeat buyers must have owned their current home for 5 consecutive years out of the last 8 years at the time of closing on the new home. For both first-time and repeat buyers, the home being purchased must be used as a principle residence. Income limits also apply; to ensure eligibility buyers should speak to their tax professional as well as their REALTOR.

Tips for Buyers:

1. Don’t procrastinate: To have any chance at finding a home and having an offer accepted by the end of April, buyers will want to wade into the home buying process right away. The immediate steps include making a final list of desired home attributes, scouting favorite neighborhoods and areas, contacting a bank for mortgage pre-approval and beginning the home search process. Home buyers who have a house to sell need to act NOW and should price it aggressively to generate interest and a sale in time to close on their new house by the June 30th deadline.

2. Don’t count on another extension: The tax credits won’t be available forever. To guarantee you can take advantage of it, act now.

3. Mind the interest rates: Interest rates are low right now, hovering around 5%. Anyone considering a home purchase in 2010 should do it now to take advantage of the cheaper cost of borrowed money in addition to the tax credits if they qualify.

For more information on the Tax Credit or to get started with the home-buying process, please contact me right away and I will be happy to assist you. If you have a house that you will also be selling, I would be happy to provide you with a market analysis showing the value of your current home.

For a complimentary Tax Credit Fact Sheet, please email me at roger@homesofalaska.com

Best Regards,
Roger

Extension of the First Time Home Buyer Tax Credit, as well as the expansion of the program to qualified repeat buyers, is expected to entice more buyers into the market. This in turn should keep housing inventories low in Eagle River throughout the winter and into spring. To learn more about the Home Buyer Tax Credit, please see my previous blog post.

Until next time…

Best Regards,

Roger

Under the new law, qualified first-time and repeat buyers have until April 30, 2010 to enter into a binding contract, and until June 30^th to close to be eligible for their respective tax credit. A first-time home buyer is considered a buyer who has not owned a principle residence within the last 3 years. Eligible repeat and move-up buyers must have resided in the principle residence they are selling for at least 5 out of the previous 8 years.

The new law also raises the income limits, allowing more people to take advantage of the tax credits. Eligible buyers with incomes up to $125,000 for singles and  $225,00 for couples will qualify for the full tax credit.

For more information about the new tax credit law, please contact me and I will be happy to assist you.

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.