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My Turn

October 5, 2009

My Turn: Now is the time to buy a house

This week's "My turn" column is by Joan Fox and Barbara Roberts. brokers and owners of Prudential Fox Properties in Oneonta and Cooperstown.

Time may be running out to take advantage of the federal government's first-time homebuyer's tax credit.

If you buy a house for at least $80,000 before Dec. 1 and make less than $75,000 a year ($150,000 for couples), the government will give you $8,000!

You can use this money to reduce your bank fees (related to the purchase) or put it into your pocket. It's called a tax credit because the government considers it a refund of your federal taxes _ even if you owe less than $8,000 in federal taxes.

In other words, if you qualify, buy a house this year and owe and pay $2,000 in federal taxes in 2009, Uncle Sam will send you a check for $8,000.

All of your federal taxes will be refunded, and you'll get a gift of $6,000. If you owe $6,000 in federal taxes and have already paid $2,000, Uncle Sam will send you $4,000. The other $4,000 will cover the additional federal taxes you owe.

The federal government defines a "first-time homebuyer" as anyone who has not owned a home in the past three years.

The tax credit may be applied only to primary residences, including single-family homes, townhomes, condominiums and co-ops.

In Central New York it can take up to two months to complete a home sale. Mortgage lenders are seeing an increased volume of applications and are scrutinizing borrowers' paperwork and property appraisals much more closely.

Unless the Nov. 30 deadline is extended (and many believe it will be), that means first-time buyers should select a property and make an offer by the end of this week to safely meet the deadline.

First-time buyers are advised that the purchase of a home, especially the first one, is a decision that should not be taken lightly.

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