The Washington Times recently published my article with the details of the extended and expanded homebuyer tax credit and a discussion about how much of an impact the tax credit should have on your decision to buy a home.
The tax credit can be used to reimburse savings accounts or even a retirement account if you choose to borrow from one for down payment and closing costs, but the credit cannot be used upfront or considered as part of your qualification for a loan.
So, before jumping into the housing market, financial experts say you should start by carefully looking at your current budget and coming up with an amount you would be comfortable spending on housing. While rules of thumb vary, many experts say that the housing portion of your gross income should be about 28 to 31%.
After coming up with an educated guess about your budget, visit a lender (or two or three) to get an idea of what loans are available and how much you can qualify for. The historically low interest rates won't last forever, so this is a good time to try and lock in a 30-year, fixed rate loan at an amount you can comfortably afford.
After you've done the financial work to prepare yourself, then you can begin looking for a home in your price range and take advantage of that tax credit.
For more information on buying a home, purchase: "HOMEBUYING: Tough Times, First Time, Any Time" today.
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