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TO BUY OR NOT TO BUY, That is the question.
By Stephen Ferrebee, President, Warren Area Board of Realtors
With the Federal Tax Credit coming to an end on April 30th of this year, many homebuyers, experienced or first time, may be feeling a sense of urgency to make a decision to purchase a home. This past weekend, while attending an Ohio Association of Realtors conference in Columbus, I was looking for any updates or additional information about the current tax credit bill being extended past April 30th of this year.
It is important to note that the current tax credit bill includes tax credit assistance to current home owners who have owned their home for at least 8 years and have used it as their principle residence for at least 5 of those 8 years, that if they choose to sell their current home and purchase a different home may be eligible for the tax credit of up to $6500. First time home buyers, (someone who has not held an interest in a principle residence for 3 years prior to purchase), may be eligible for the tax credit up to $8000. One requirement is that there has to be a written binding contract to purchase in effect on or before April 30th, 2010 and the property must close on or before July 1st, 2010. All buyers need to consult with their tax preparers or accountants to discuss the other requirements they must meet in order to receive these respective tax credits.
I want to use the remainder of this article to address First Time Home Buyers. As a Buyers' Agent I deal with a numerous people who are buying their first home. They are excited, have lots of questions and concerns. First Time Buyers need to do a budget and establish if they really can afford homeownership.
Remember Homebuyers: you will normally need to expend somewhere between $1100 to $1500 out of your savings prior to the closing of your new purchase and this is in addition to your down payment. Here are some examples:
Appraisal: $300 to $375 (Required by your Lender)
Home Inspection (optional & recommended): $190 to $250 (varies upon size of home and home inspector).
1year Home Insurance Policy: $500 to? (Required by your lender, prior to loan approval & closing).
Can you afford these fees? It is very important to review your personal finances to insure that your dream of purchasing a new home does not turn into a nightmare. There are local programs that may assist you with your down payment and closing costs, but no one should ever drain their savings or checking account. It is important to keep a cushion of security. It's just the smart thing to do! Wait until you feel ready and comfortable about purchasing a home. There are a lot of foreclosures on the market today because individuals took the plunge to purchase a home when they just were not fiscally ready to do so. Purchasing your first home should be everything you dreamt it should be! Contact a local Realtor and make an appointment to meet with them and discuss all the aspects of homeownership before you make that final decision. You can find a realtor at www.wabor.org . Realtors, we make the American Dream come true everyday.