Real Estate Reality

Tax Credit?  We don’t need no stinkin tax credit!

So, by the end of April many people had hurried up and purchased a home so they could take advantage of the federal tax credit for first time home buyers. Good for them. This helped sell homes which allowed those home owners purchase their new home (and, by the way, possibly take advantage of a federal tax credit of up to $5600) and so on down the line. So far so good. People bought new homes and had some cash to improve their new home, or buy appliances, or, if they were very thoughtful, pay down the principle on their mortgage by $8000.

But what about the rest of us HUMMMMMMMMMM? What if we never found the house of our dreams, or circumstances conspired against us, or we just couldn’t decide what we wanted to do? What about us?

If you purchased a home in April the interest rate on a thirty year fixed mortgage was hovering around 5.25% at this moment the same loan is about one percentage point LOWER! This translates to a saving of over $50,000 in interest payments on a $200,000 loan over the life of the loan as compared to the rate in April. How do you like them apples Mr. $8000 tax credit? How do you like that?

My point is it is better to purchase a home when you are ready, not for some artificial inducement. As you see, good things come to those who wait.

Eric Lowrey is a licensed Realtor at Prudential Lucien Realty.

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Volume 6, Issue 18, Posted 2:15 AM, 09.08.2010