It was big mortgage news when the government proclaimed an $8,000 tax credit available to qualifying first-time home buyers and a $6,500 tax credit available to repeat home buyers who bought a new primary residence.
To qualify for the tax credit, a buyer must have entered into a contract by April 30, 2010 and completed the transaction by June 30, 2010. This mortgage news sent homebuyers who had been on the fence rushing to purchase properties from possibly the largest and most attractive inventory in decades in time for the deadline. Most economists agree that the surge in property sales was a result of this incentive.
Recently, there have been some rumblings about the possibility of another tax credit being offered. This mortgage news has been met with mixed reviews for several reasons.
Those in favor of another tax credit believe that it will help sustain the real estate recovery and allow home buyers who were unable to close in time for the previous tax credit deadline an opportunity to benefit from another tax credit. Since some feel that the economic downturn appears to have stalled and may even be reversing course and turning positive, those in favor of this latest mortgage news assert that continuing to create incentives for homeowners to purchase property will contribute to the economy moving in the right direction.
Opponents to the latest mortgage news pertaining to another possible tax credit cite a few reasons of their own. One suggestion is that it will create resentment and possible lawsuits from those individuals who settled on their homes after the prior tax credit deadline expired. Many of those homebuyers saw their transactions dragged out as a result of complications from foreclosure or short sale processing delays or a backlog of mortgage loan requests and not enough staff to handle them in a timely manner.
Unless something could be offered retroactively to buyers who settled in the period between the initial and proposed new tax credit, this mortgage news would not be welcomed by those home buyers. Still others oppose this mortgage news because they believe it is time to let the economy and the real estate market follow a “natural course” of recovery and a tax credit for a selected few will simply increase our country’s deficit.