The Glade 4.0

http://www.cnbc.com/id/32874022

Here's an article on the whole tax credit for first time home buyers. It is putting me in a somewhat difficult situation. I really need to buy a house, for a number of reasons. I would be a first time home buyer, but the problem is that I don't qualify because I make too much. Well there is a bill in congress right now (mentioned in the article) that will get rid of the income limit and first time homebuyer status, and increase the tax credit to $15k. I went looking at houses this past weekend, and found a house that I really like.

Now comes the conundrum. I would feel like an idiot if I buy a house, and then a couple weeks after I close they pass the bill and I pissed away $15k. But if I wait, and they don't pass it, or they "compromise" and put the income limit in this bill, then I've waited for nothing, and perhaps housing prices will have gone up by then and I'd be out money. Of course, they could not pass any extension at all and home prices could take a dip, in which case it would be good if I wait. The $15k would go a long way towards helping me furnish the house, buy appliances, etc.

So now I'm stuck trying to figure out if I should wait, or buy.

P.S. I know some may have political issues with the bill. I understand that, but try an keep the politics to a minimum in this thread. And no, I won't feel a bit guilty for getting a small portion of the exorbitant taxes I pay, as a single person living in an apartment, back.

Hmm... tough call, however, from what I've read about the tax credit thing is that you do wind up paying it back, resulting in a hit in your tax returns. Personally, I'd try and get into a house without touching that thing, because you're going to potentially lose a lot of your tax return paying that back, and at the end of the day you could potentially use tax return money to purchase appliances. A lot of it depends on what kind of appliances you need though.

From my personal experience, if you find a house that you fall in love with, chances are you're not the only one. Gems don't tend to stay on the market long.

Have you given any thought to perhaps renting appliances and replacing them with purchased ones as money permits?

There was a bill passed last year that had a $7500 tax credit that you had to pay back. The current one that expires Dec 1st is $8k and you don't have to pay it back. The new one would be $15k that you wouldn't have to pay back.

Yeah, the house I'm looking at has been on the market since 7/31. So it isn't new to the market, but it hasn't been on the market that long.

As far as appliances, it depends on what is included with the house. I have no major appliances except a microwave.

Well, if you have your facts straight on that bill, I would hold out for the money. Most people aren't in their first house longer than 5 years. I'd say your odds of getting a new house probably go up if you're not already married. Unless you think you'll be in that house for the next 10 years, I hold out for the money.

The house is going to be one of your biggest sources expenditures every month with most of that money being interest. If the savings from that $15k are dumped straight into principal, that will probably save you at least 5 years on your mortgage. There are plenty of nice houses out there, many of which you will likely be just as happy in. Don't let urgency drive you into something that doesn't make financial sense.

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The Dude abides.

Yeah, and really, if I were moderately sure the bill would be passed, than I wouldn't even be considering not waiting. I'm just not sure if the bill will pass in its current form, as I'm betting one of the first things on the chopping block will be the removal the income limit. And if they do pass the bill without that income limit removed, but still open it up to non-1st time homebuyers, than it will likely cause housing prices to rise. So the house would be more, AND I wouldn't get the tax credit.

I guess the "Really like the house" factor is the key. If you want this house more than you want to make a potential financial gain then maybe you shoudl get the house. You could likely make do with a 2nd rate (used, rented) fridge and oven. If you want to avoid the laundry mat you can make that investment now too. If you buy the house today and get the discount you'd still need a stove a fridge to hold you over until january, right?

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I prefer to think of them as "Fighting evil in another dimension"

Well, I wouldn't need to wait until January. You can change your witholding to get the money now. Also you can claim it on your 2008 taxes and amend your 2008 return.

So I looked into it more and found that it is actually phased out from $75k to $95k, and since I can use 2008 income, and it is MAGI rather than gross income (so the money I have going into my 401k doesn't count), I would actually get about $6200 under the current plan.

So now it is buy now and get $6200, or wait and get $15000 if they pass the new bill, $6200 if they renew the existing plan, or $0 if they do neither.

Sheesh...

If you think the house is available for a good price and you're comfortable with the market, etc. I'd buy now.

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"Dress cops up as soldiers, give them military equipment, train them in military tactics, tell them they’re fighting a ‘war,’ and the consequences are predictable." —Radley Balko

A bird in the hand is worth two in the bush. You don't know what is going to happen tomorrow. Take what you can get when you find the house you want to buy. Gambling that the price will remain the same and the tax breaks will be higher at this point is a double factor gamble and has less than a 25% chance of realization.

Sometimes you just have to be happy with what you can get and not beat yourself up over 'if I had waited I could have saved more.' If you have inside information favoring one side or the other that is one thing, and will still occasionally get you stung. Gambling on what house prices are going to do and what the government is going to do may leave you wishing you had moved when you could afford to.

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The U. S. Constitution doesn't guarantee happiness, only the pursuit of it. You have to catch up with it yourself. B. Franklin

"A mind needs books like a sword needs a whetstone." -- Tyrion Lannister, A Game of Thrones