There's still hope for those trying to buy, keep a house
While mortgage foreclosures continue to rise along with the growing unemployment rate, there are a few small rays of hope for homeowners in trouble -- and those looking to buy a home.
Tax credit expansion
(AP)
Last week, Congress approved the extension of the current $8,000 First-Time Homebuyer Tax Credit. Instead of expiring Nov. 30, it will be available for purchase contracts signed by April 30 (with closings by June 30).
The FTHB credit is still $8,000, but the income limits to qualify for the program have been increased to $125,000 for each borrower.
Congress also added a tax credit opportunity for existing homeowners who buy a new home. They will now be granted a $6,500 credit toward their next home purchase, if they have lived in their current home for at least five years. In other words, speculators need not apply.
These credits apply directly against income taxes owed, and may actually create a refund for some home buyers. Or, the $8,000 credit can be used to lower the mortgage payment over the course of the first year or two for first-time home buyers -- a solution for those less disciplined with their cash.