For those who missed out on the deadline to take advantage of the $8,000 tax credit, the good news is that there is still plenty of opportunity for saving money when purchasing a home. In fact, according to many experts, those who purchase a home today could actually save far more on their purchase than those who purchased a home in time to get the tax credit thanks to the low mortgage interest rates that are currently available.
Although mortgage interest rates were already at attractively low levels while the tax credit was still in play, the rates have continued to drop ever since the credit expired. As a result, those who purchase a home today are likely to save more over the life of the loan than they would have received from the tax credit. A buyer who purchases a $180,000 home and borrows $173,700 at an interest rate of 5.125%, for example, can expect to save more than $15,000 over the lifetime of a 30 year loan when borrowing at an interest rate of 4.75%.
In addition to saving due to the lowered interest rates, many buyers are finding that the asking prices on homes have lowered since the tax credit expired. Furthermore, many homebuilders are offering special incentives to those who purchase a home now. In many cases, these incentives are actually more valuable than the $8,000 tax credit. For example, some are offering free appliances, basement upgrades and special discount programs that help buyers save even more money.
So, while it might be disappointing to some that they weren’t able to take advantage of the tax credit, it might actually be a blessing in disguise. While you might not be able to see the savings right off the top, there is a very good chance that you will enjoy an even greater savings on your home now that the tax credit incentive has passed.
