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Did you want to use the first time home buyer tax credit but you couldn’t get it to work for you in time (it’s set to expire the end of November)?  You may be in luck!  Senate is considering extending the first time home buyer tax credit until Spring of next year.  The current proposal would allow potential buyers to sign contracts up until April 30th and they would have to close within 60 days.  The amount of the credit would still be $8,000.  Income limits would also be raised from $75,000 to $125,000 for individuals and from $150,000 to $225,000 for couples.  Above that the credit starts to phase out.

But what about current home owners? They are in luck!  Under the proposed bill, current home owners could be eligible for up to $6,500 for the purchase of a new home.  This would have to be a primary residence and have lived in their current home five out of the last eight years.

The tentative bill may possibly be attached to a separate bill looking to extend unemployment insurance benefits (a bill likely to pass) but nothing is settled yet.

What’s interesting is this comes as the IRS is investigating apparent fraud cases involving the first time home buyer tax credit.  Cases are showing up where people claimed the credit but didn’t purchase a home while other cases are showing tax claims on homes that aren’t first time homes.  This adds fuel to the fire on the question of whether this tax credit stimulus is really helping.  The program is costing billions and many question if the tax credit is really helping the economy.

This can turn out great for those who were already looking for a new home but buyers should be careful to run out and try to use the credit, if passed.  Combined with low mortgage rates, this can be a great time to purchase a home.  Remember though, a home is still a great expense and buying one shouldn’t be one that you jump into.

Here are some other takes on the credit extension:

Senators Agree to Extend First Time Homebuyer Tax Credit

First Time Home Buyer Tax Credit Could Be Extended

First Time Home Buyer Tax Extension

photo credit: *Susie*

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Senate Possibly Extending First Time Home Buyer Tax Credit