The FTHB Credit of $8,000(and $6,500 for repeat homebuyers) will be expiring soon. Those wishing to utilize the tax credit need to enter into a home purchase contract by April 30, 2010 and fully close the loan by June 30, 2010. The homebuyer’s tax credit can be used to offset expenses for a home purchase from the down payment to improvements. (Don’t forget the up to $1,500 energy tax credit for all home owners that receive energy efficient upgrades or additions in their homes.)

Buying a home is a big step for most; however, when considering your housing options, while reviewing your housing budget, sometimes seemingly more expensive moves may prove to be the most financially astute decision. Example – I purchased my first home…through FHA…. as a fulltime working student because I couldn’t afford the increasing rent at the time. My rent was increasing from $780 to 840/month and I was barely making ends meet and going to school. I took my father’s advice and decided to buy a home. Although I had to come up with approximately $1700 to close my loan, my new mortgage payment was $340/month and I had created a tax deduction with my mortgage interest payments. As the years went by the property became a pool of equity and eventually rental income. As a college student, it was strenuous to come up with $1700, but the temporarily more expensive choice made financial sense.