I would say 90% of my friends rent instead of own.
And out of those 90% of my friends, I would say 100% of them want to punch me in the face everytime I try to encourage them to buy a house. I usually get, “will you please shut up. I’m not buying a house.” And then I say, “but what if I told you that the banks are….” but by the time my sentence is finished, I’m usually standing alone talking to my Utica Club.
Yes, buying a house is expensive. Yes, it’s a commitment. YES, it’s a huge responsibility.
But there has never been a better time in history (I think) to buy a home. Last week when I was vacationing through the foothills of the French Alps with a couple investment bankers and their au pairs, (not really, I was at Cracker Barrel)… a couple friends of mine who work in real estate were telling me about a government program that basically gives free money to first time home owners. Wait, what??
Here is the program…
Between now and April 30th, if you buy a home for the first time, you will get an $8,000 tax credit. That’s FREE MONEY! Look at it this way, if you buy a home for $200,000, you will most likely need to put down $10,000 as a down payment (5% of the price of the home). With this tax credit, you’ll only be paying $2,000 out of your pocket. That’s not bad. And if you find a nice little condo or apartment that is priced under $160,000, it’s basically zero money out of pocket.
PLUS, if you already own a home, and are looking to move up, the government will give you $6,500 to upgrade into a new home.
Interest rates for buying homes have never been lower (I think), and there are so many benefits to owning your own home. It’s an investment, you can borrow against it, it will make you feel good about yourself.
I know a little bit about it, and would be happy to answer any questions you may have, but here is a realtor I have enjoyed working with in the past who can help you find a brand new beautiful home that’s yours. All yours.
Michael Crisafulli (Albany area)
mjc@crisafulliassociates.com
(518) 464-9782 ext: 102
-or-
Steven Sanders (NYC Area)
ssanders@elliman.com
(917) 604-0499
GOOD LUCK!!!!
Loading ...
No question now is the time. It’s a buyers market and interest rates are ridiculously low. 4.85% on a 30 year fixed, seriously, thats crazy.
What, no T shirt link?
I used this program & am thrilled to say I’m getting a HEFTY refund from the feds. However, I don’t think you can use this $ as part of your downpayment – at least I couldn’t :(
You can’t use the $8,000 (which you won’t get until you file your taxes next year), but if you have good credit I imagine that in theory you could get a bank to loan you the $8,000 and then pay off the loan once you get the tax return. Sure, you’d have to pay interest on that loan, but if it makes the difference between buying a house and continuing to toss rent money down a bottomless pit, then I think it’s worth it.
You guys are lucky. Back in my day (2008), I only got a $7,500 tax credit and I have to pay it back at $500/year!
Sorry, meant to say you can’t use the $8,000 toward your down payment, at least not this year. Check the rules — usually these credits work for houses bought through April/May/June of the following year, so you could file your taxes in February 2011, claim the credit, and then buy the house before the window closes.
You can’t use the $8k as a downpayment since you have to apply for it AFTER you buy the house. We bought one back in June 09 and are still waiting for that money… c’mon IRS, mama needs a new dishwasher.
I must agree the time is now. We pay only a little more per month than we were paying in rent, plus we can garden, paint the walls any color, and are done with bad-landlord-craziness. Sooo worth it.
Does Steve Sanders still drive the same Corvette he had at West Beverly High?
Re: Lines like “(not really, I was at Cracker Barrel)” are why I love this blog.
I also have friends who rent, who pay almost as much in rent as I do for my mortgage. I just don’t get it. Why would anyone do that? I realize its less responsibility to rent, but come on, how hard is it to own a house? Owning a house is fun. Just go buy one already…..
My wife and I bought a 2 family house last fall. Including the income from the guy upstairs, we’re now paying a few hundred bucks a month LESS than we were when we were renting. Now I just have to get around to actually DOING our taxes so we can get our $8k…
Speaking of home owning… anyone know a good roof person? I have one place to patch and I want to find someone I can trust…
Jacky, Dave Brackett phone:469-8101
He is the best and no job is too small. I’ve referred him to others for small jobs and they all make sure to let me know how well he did the jobs.
We owned a home for 4 years and after moving up here to NY, we in no way wanted to buy another house up here. We got very lucky that our house down south sold VERY quickly and didn’t have to pay both rent and mortgage on 2 places for long. But the new job that my husband has does not make it convenient to own a home. We have no kids, no pets and 1 house plant and enjoy having no responsibility. We will be moving every few years and don’t want to have to worry about trying to sell or rent the house. Sorry Matt, and yes everyone has tried to convince us to buy here.
We bought a home in October, and yup we get the 8k credit (yay!) However we still won’t see that for months, so it’s a no go to use on the down payment. There are other ways to go about the down payment, an FHA loan I believe requires only 3.5% (but then you get to pay a lovely mortgage insurance each month until you hit 20%). Also, it’s good to know that you can’t sell your house for 3 years or you owe the government that $8,000 back (bummer). Any of this can be learned from a great real estate agent, for sure. Good luck to all!
Listen – I rented in and around Albany for more than 7 years until someone finally kicked me in the ass and basically stalked me into just looking at houses for sale…I agreed, started looking and found a house that I loved. Sure, the whole closing process is a nightmare for me and all those other non-committal folks, but the end result is that I have a house that is ALL MINE, that I can paint, contort, and do anything I want with AND I got about a 9K tax refund…You will never see that renting no matter what the interest rate is. So, even if there are these government incentives right now, it’s always been a better investment to buy than rent…and I learned that after years and years of renting…
If you are planning on purchasing a home and want to get the tax credit you must be in contract by April 30 & close by June 30th.They may decide to extend this but time is running out quickly.If you already did your taxes talk to your accoutant because you still may be able to apply for it.
We are working on buying a family member’s house. Unfortunatly we don’t get the 8k tax credit. We are getting the house at under value though. It is insane at all of the bs taxes you have to pay etc. I thought we were doing good with a down payment but its mostly going to closing/ At least now banks are really looking at your stats before giving you a loan. 2 years ago we looked at getting a condo and used an online mortgage company and they said we could get way more then we could afford….no wonder things happened how they did. Id like to know where mike is getting 4.85%. We just locked in at 5.25%
I totally agree in buying a home….my husband and I after high school moved out and bought a mobile home instead of renting. It wasn’t the Ritz but it was a nice park in Latham and cheap…We always felt renting an apartment was like throwing money away. We sold it a couple of years later for more than what we paid so basically lived for free and made money while our friends had no return for their rent. There are such good buys out there at any given time and it’s scary at first but so worth it and the only sure investment one can do.
I agree. I bought a house in Center Square in 2005, and it was the best decision I made since I moved in the area. I rent the first floor, and that covers pretty much 40% of my mortgage payment, the remainder is almost lower than what I used to rent on State St. If you have never owned, I wouldn’t recommend too many rental units (if any), but one helps a lot (and if you find a great tenant, keep him/her at all costs).
@jacky: Ken Youngs (518) 272-3038. He is working on my roof now as we speak, but I’ve nothing to complain about so far, and he was highly recommended by a friend. Furthermore, he will warranty workmanship for a long long time (5 to 10 years, depending on the deal I guess). Whoever you pick, do it as *soon* as you can, do not neglect your roof :)
No bank will look at you without 20% down these days (except FHA). don’t fool yourselves! Also if you’re building… I could not find one bank to finance the construction of my new home (banks do NOT like new construction… with the idiot contractors out there, it’s risky).
But for the regular end loan I did get a 4.99% with SunMark (and I am building alone) solely based on my good credi score.
The $8,000 is a sham. All it does is keep house prices elevated an extra 8K. If there wasn’t this tax incentive houses would be selling much cheaper than they are now. Even more than 8K. This program was designed to help the sellers not the buyers. Sure it is a “quick” 8K cash influx for the buyer but it is not a reduction the actual home price. Wait a few months or a year after the program ends when people can’t sell their homes. Then you’ll see the prices drop dramatically and really get a deal. Matt, you should write a blog that says “sell your house already”.
Think about it this way as well: That tax credit is the only thing keeping prices slightly higher than where they should be. As of May 1st, the housing market will probably drop again, maybe by about 10% and then instead of saving a mere 8K you would save 20K on a 200K house. It might pay to wait and see.
I will be the first to admit that buying a home isn’t for everyone. Hell I rented a two bedroom apartment for 6 years and loved it. However, the $8K tax credit definitely made me rethink the renting thing. I’ll spare you the details of how I found an amazing place, but I ended up with a two-family in fantastic neighborhood, landed one kick-ass tenant, and pay $300/month more than I paid in rent. Plus I was able to lock into a Mortgage Credit Certificate (MCC) through SONYMA which allows for a substantial tax break annually for the life of the loan. No too shabby of a deal.
Good luck to those about to embark the home buying journey. My partner Xanax got me through my dreadful trip.
[...] has a great, must-read post about why you all should buy a house. Well, not all, but most [...]
Don’t forget–Albany is surrounded by rural areas. The USDA offers a no money down, no pmi mortgage to folks who are income eligible who buy in approved rural areas.
I’m a single mom with two children. I have a very good job in Albany, but I’m far from rich. I met the income requirements and close in April on a really nice house in Washington County. I locked in at 5.25% and my mortgage payments will be the same as my current rent–for twice the amount of space I had by renting. My seller is paying my closing costs–so I’ll have no money out of pocket. Plus, I get $8,000 back as a first time homeowner.
My children are in local colleges and live with me. In just a few years, I’ll lose the ability to claim them as deductions. But I will be able to claim my interest and taxes.
Is the incentive keeping prices high? I don’t think so. We “missed out” on the huge spike in prices and were spared a bit when the bubble burst–unlike places like Las Vegas and parts of Florida and California. Plus, our rental rates are fairly high in this area compared to the cost of buying.
Home ownership isn’t for everyone–particularly if you need to be mobile. And, I had a great landlord who did a fantastic job with maintaining my rental. But there’s something inside of me that really wants to own my own place. I encourage you all to do the math–there are a lot of great “rent or buy” calculators out there!
Be aware that there are some criteria you need to meet to qualify for the credits – including having income below a certian level. Married taxpayers have to be very cautious that they both meet the criteria. Tax professionals are the ones to contact about the credits; do not take just the advice of the bank and/or real estate professional.
I am a tax professional and have needed to deliver some pretty sad news to some people this year who were thinking they were getting an $8,000 credit and ended up getting zero.
Excellent article, I think this is tremendously helpful. Keep up the invaluable work!