There is huge debate now about the first time home buyer tax credit and whether or not it will be extended into 2010.  The rumors now fly that the cap may even be raised.  Some say to $15,000.  I believe this is all speculative right now.  Nothing is set in stone.  Of course not, the government needs people buying now to boost the economy.  Not waiting until 2010.

So the next question becomes… Do we buy our houses now?  Or do we wait and buy them in 2010, crossing our fingers that there will be a tax credit then?

There is a lot of controversy surrounding this first time home buyer tax incentive.  Many people are abusing it, manipulating it, and basicly stealing it.  According to an article published by the LA Times, people are filing claims on homes that were never purchased, claims for children under 18, claims for nonresident aliens, claims for IRS employees, and more.  They have also discovered over 167 criminal schemes, opened 115 criminal investigations and temporarily frozen more than 110,000 refunds.  Because of this and the programs projected overall costs, many are against extending the tax credit beyond it’s expiration date.

On the other hand, there has been marked improvement as expected from the first time home buyer tax credit.  There are fears that letting it expire will cause further decline in the market.  Those people believe it is imperative to continue the credit.

So what do you do?  Knowing all of that, do you buy now or wait until 2010?  As you may know, my husband and I have been trying to put ourselves in a position where we have the option to buy now.  So far, so good.  We just have to wait for the house we are in (not our home) to sell before we can move.  My personal opinion is that I am not willing to take the chance of not having the tax credit available to us in 2010.  What a lot of people do not know at this point is that not everyone gets the full $8k credit anyway.  For us, $80,000 is the most we can comfortably afford to buy at this time.  So anything higher and we can’t use it anyway.  So unless you are planning on buying a mortgage for more then $80k, the only thing the extension will do is give you more time.  For those who are planning to buy a larger mortgage, ask yourself if the extra few thousand are worth risking not getting anything at all?  It’s lot like playing “Let’s Make A Deal” on television.  Do you accept what’s in front of you, or risk losing it all for the sake of pocketing more money?  We are not taking that risk if we are able to avoid it.