Potential for Tax Credit extension

By: Collin Ellingson

More encouraging news that the First Time Homebuyer Tax Credit will likely be extended and expanded as the Senate agreed this week to initial terms after intense lobbying from the NAR and NAHB, among others.

A recent U.S. News and World Report article on October 29^th reported that the terms include an extension to April 20^th, 2010 for all contracts, with an additional 60 days allowed for closing.  The new terms would also allow EXISTING homeowners to claim up to $6,500, and would increase the income limits for single and married buyers to $125,000 and $225,000, respectively.

While this is encouraging news for the real estate industry, I wouldn’t let the pending extension delay a first-time buyer purchasing decision today.  There are no guarantees that the new measure will pass with all terms intact, and a November 30^th closing is still within the realm of possibility. First-time homebuyers should take advantage of the sure thing: choosing the home they want, locking in at today’s discounted price, AND taking advantage of the tax credit.  That’s a win-win-WIN.