Will $6500 Tax Credit Get You Moving?

Will a $6500 Tax Credit Get You Moving.




Have you been thinking about Moving Up or Downsizing? Well... I think with the tax credit incentive there is not a better time than NOW!!! Here is some info on the Tax credit to help you decide.

If you have owned a home as your primary residents 5 out of the last 8 years, you may qualify for a $6500 tax credit. There is a cap, the house your purchase cannot exceed $800,000. Here is a link to NAR for the entire scoop on this http://www.realtor.org/home_buyers_and_sellers/2009_first_time_home_buyer_tax_credit


Here is a quick snap shot in a chart
http://www.realtoractioncenter.com/realtor-party/documents/2009-NAR-Issue-Brief-Homebuyer-Tax-Credit-Changes-1104-1107.pdf

Here is a link to some frequently asked questions about the tax credit http://www.realtor.org/wps/wcm/connect/d336a1804033a163816af5205f470b6e/government_affairs_tax_credit_FAQs_110509.pdf?MOD=AJPERES&CACHEID=d336a1804033a163816af5205f470b6e

If you are confused, just give me a call. You can also call your accountant, they will know if you qualify.

But wait...there is more ,think about it, there IS more to consider.
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If you have been watching you know that house prices have been slowly making their way back up again. Let's say that they go up next year by 11% which is what some have been predicting. Here is an example that will help you understand the effect of that.

Let's say your house is worth $300,000 and the house you are interested in is $375,000.
Your current house ($300,000 x 11% estimated gain in a years time) = 33,000
Your new house ($375,000 x 11% estimated gain in a years time ) = $41,250

If, the houses were to go up buy 11%, You would have gained an additional $8,250 in equity if they went up by the same value. That is on top of the additional $6500 for a total gain of$14,750. Purchase price difference of $75,000.

If you wait a year to buy.....Let's say you don't move for another year and then decide to move and we will use the same dollar values for the house
 You will sell your house for $333,000 and you will pay $416,250 for the house you wanted. The purchase price difference will be $83,250 with no additional gain of equity.

Instead of gaining $14,750 you will pay an additional (83,250 - 75,000) = 8,250 to purchase that same home. So the overall difference....it will cost you  an additional $23,000 to move in a year based on the figures and percent estimates presented. And that is not counting the additional interest you will pay for that additional 8,250 so it even will compound to be a bigger number.

Soooo, if you are thinking about moving, NOW is the perfect time. This tax credit is NOT expected to be extended past April.