First Time Home Buyers Tax Credit Extension into 2010 Running Out of Steam

Posted on | October 26, 2009 | 27 Comments

The first time home buyers tax credit extension has been an extremely popular topic over the last few weeks. Home buyers hoping to benefit from this tax credit have essentially run out of time because it generally takes between 35 to 45 days for a first time buyer to close on a house. The tax credit expires on November 30th but this expiration date is the closing date. With that in mind, it is now too late to get started on the home buying process to receive the credit.

There has been much talk about extending the current tax credit but this idea seems to be losing its luster. There are many government officials who are in favor of the extension into 2010 but the amount of money it is going to cost has pushed many officials in the other direction. For those of you who may not know; At this time, Senator Johnny Isakson is urging for the tax credit to be extended to December 1st, 2010. He not only wants the credit extended he also wants it increased to a maximum of $15,000 and available to all home buyers. Senator Ben Cardin is in favor of a six month extension which is supported by Senate Majority Leader Harry Reid.

There is very little doubt that tax credit has aided the recover of the housing market but it could all turn around with the expiration nearing. It will be very interesting to see what the mortgage application data shows for the month of October and November. These are the months we are likely to see a decline in application because first time home buyers are weary of not closing in time to get the tax credit.

We have seen great interest in the idea of an extension of the tax credit on Subprime Blogger. We would like to thank all the readers who have read and responded to our articles. The goal is to get 10,000 votes in favor of an extension and possible expansion of the tax credit. If we get enough votes we can take this to government officials and let them know how the public feels. If you would like to help please vote at the following poll:

First Time Home Buyers Tax Credit Extension Poll.

Please make sure to return to Subprime Blogger for all your mortgage and financial news. To stay up to date on the current state of finances make sure to bookmark the current news category below.

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Author: Alan Lake

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Comments

27 Responses to “First Time Home Buyers Tax Credit Extension into 2010 Running Out of Steam”

Madeline
October 26th, 2009 @ 7:13 am

Please extend the homebuyers tax credit. I have just been approved for a house and I won’t make the closing by Dec 1st. The homebuyers tax credit was actually the incentive that pushed me to want to a buy a house at this time for my family. Extending this credit for another 6 months would really help us 1st time homebuyers who are already in process of closing or about to start. Please extend.
Dustin
October 26th, 2009 @ 7:48 am

What are we doing for the 1st time homebuyers who have been tied up in a short sale for over 5 months??? We began the home purchase process over 5 months ago, and have been jumping through hoops with Washington Mutual. Their negotiators are paid a low hourly rate, so they have no incentive to excel. They are paid the same if they process 2 short sales or 20. What are we doing for the citizens of this country who began the home purchase process over 5 months ago, and will not close in time soley due to the incompetence of these institutions who don’t have workers interested in doing their jobs?

We were told over 45 days ago, that if we agreed to the terms of WaMu, then the short sale would be approved within 7-10 days, and we would definitely close by Nov 30. THAT WAS 45 DAYS AGO!!! We have since gotten replies that the file was transferred to another negotiator??? Should we really miss out on the tax credit because of their incompetence?

EXTEND THE TAX CREDIT. THE END WILL JUSTIFY THE MEANS!
Krys
October 26th, 2009 @ 8:01 am

Please put an extension on the First time home buyer tax credit. the process has been long and because of it I am going to miss out on this great offer because of all this red tape and deadlines and the abuse that some have caused for the truly First time home buyers.
Extending it another 6 mos to a year would make some of us who now are making the attempt now can make our dreams come true…
Thanks
Maurice
October 26th, 2009 @ 8:20 am

It needs to be expanded to include more buyers, not just first time buyers. I know of so many who are stuck because they can’t sell their homes. Some have had their jobs relocate them and the familes are either split up while one stays and tries to sell the home or they just move to a rental in the new location and still have the burden of their house payment until it sells. Most of these homes have been on the market over a year with reduced prices. It is a terrible situation for these familes. The expansion of the tax credit would greatly increase the chances of families trapped in these situations to finally get their homes sold so they can move on with their lives.
Mark
October 26th, 2009 @ 8:30 am

Tough luck, Dustin. However, I wasn’t really eager to use my hard-earned tax dollars to pay you to buy a house anyway.
Le`O
October 26th, 2009 @ 8:45 am

I and apparently quite a few others are in the midst of “trying” to buy a home solely based on the availability of this tax credit. Extending the expiration of this credit for another 6 months would GREATLY help to ensure that countless people who have already started this process will be able to realize their dreams of “Home Ownership”.

In the midst of all this financial chaos, bail outs, etc. this is one of, if not the BEST idea that has come out to help “the people” (non-corporate/businesses).

PLEASE give serious consideration to extending this as it would be a win-win for ALL !!!

Thank you
Shay
October 26th, 2009 @ 8:48 am

I agree with the previous comment I have been tied up with a short sale as well and the extension would most def. help me. We still have no info on the property.
The Financial Suite » First Time Home Buyers Tax Credit Extension into 2010 Running Out of Steam
October 26th, 2009 @ 8:53 am

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Trea
October 26th, 2009 @ 9:22 am

Please extend date, I need the credit to use as my down payment and house will not close before Nov 31st!!!
Tony reeves
October 26th, 2009 @ 10:04 am

It be nice to see them extend it cause get mine closed before the nov 30 still waiting on rural devlpment. been waiting 3 weeks already .
Jose Batista
October 26th, 2009 @ 10:05 am

Our house is going to be done in Mid December now. The tax credit would help us in a big way. Extending this program will help people in houses.
Jose Batista
October 26th, 2009 @ 10:06 am

Our house is going to be done in Mid December now. The tax credit would help us in a big way. Extending this program will help people get in houses.
Brandt
October 26th, 2009 @ 10:51 am

Please extend the tax credit. I am putting an offer on a house today and am in fear of not closing in time to receive the tax credit.
Rachel
October 26th, 2009 @ 11:00 am

I was under contract in plenty of time (mid-September), only to find out that the seller was unable to pay off the liens on the property and now the contract was cancelled. Don’t have enough time to find another house and close by November 30th… please extend it!
Nik
October 26th, 2009 @ 11:10 am

Hey Mark, don’t worry about it, maybe some of us will be using our own tax dollars to support. Believe it or not I have paid quite a bit in taxes over the years and would have no problems accepting the credit since I have more than covered it.
Ines
October 26th, 2009 @ 12:49 pm

Please extend and expand the first time home buyers tax credit incentive to ALL BUYERS living on the purchased property from January 1, 2009 to December 31, 2010!!!!
Robert
October 26th, 2009 @ 1:58 pm

Please extend this tax credit. There are many good people out there who could really use this extension.
cp
October 26th, 2009 @ 4:57 pm

I would like to see the tax credit extended. I could really use it, but have gave up since most of the good deals are short sales and they take a long time to close. If they extend it I would definately be buying a home soon and I’m sure many others would too.
Jack
October 26th, 2009 @ 5:21 pm

Shame on all of you. The fact that you have paid quite a bit of taxes over the years (Nik)before or “really could use the money” is no different from anyone else in this country, buying a house or not. Do you not realize that all these tax credits are put on our communal credit cards at the National Bank of China? If $8,000 makes or breaks you on a purchase, than guess what…YOU CAN’T AFFORD A HOUSE! This whole problem was brought about by government interference into housing markets…what happens when this extention runs out? Even if the housing markets are stable, when are we going to repay these Billions back?
PWES#1
October 26th, 2009 @ 5:24 pm

Please place an extension on this tax credit. My wife and I are in the process now of attempting to buy a home. Our only incentive is this $8000. We will deeply appreciate your actions in this matter. Demand that this is extended through at least the 2009 tax year.
Mark
October 26th, 2009 @ 5:25 pm

Hey, Nik
Use your own money to buy your house, you deadbeat.
Jim
October 26th, 2009 @ 5:30 pm

If it takes an $8000 tax credit to sell houses, then it looks like houses in general are overpriced by roughly $8000. Let the market determine the price of these houses, and keep the government and Americans’ tax dollars OUT of the real estate business.
Ryan
October 26th, 2009 @ 5:34 pm

My wife won’t know where she is stationed until june of 2010. If they have the credit around then we’ll buy a house, if not we won’t. The credit tips the balance on if it makes economical sense to buy vs rent.
William
October 26th, 2009 @ 5:39 pm

The government should give me eight or fifteen thousand dollars because I really deserve it. The people who don’t get this money are skinflints if they oppose it. Real tightwads.
mike g
October 26th, 2009 @ 7:40 pm

First, if you can’t afford the 3.5% down payment you have no business even thinking about buying a home.

Second, home prices are still too high no matter what standard is applied. Historically they haven’t gotten much above 120K (in 2009 dollars) even during boom times. They are currently about 160-170K. The other standard is the median income compared to median home prices. Americans do not have the income to support homes at the current prices.

Why are we so eager to re-inflate the bubble?

If they do pass the credit extension it will just slow down the correction or worse create another bubble that will burst later. If they don’t home values will fall through the floor and housing will be truly affordable again.

Nobody should spend more than 25-30% of their take home pay on a mortgage. If you do you need to cut out savings and go into debt to fund your lifestyle. It isn’t worth it.

Oh, and if someone tells you real estate that you live in is an investment they are deranged or making a profit from selling the lie.
CARLOS D.
October 26th, 2009 @ 9:52 pm

PLEASE EXTEND THE TAX CREDIT UNTIL DEC.1 2010 THIS WILL HELP EVERYONE.
Mark S
October 27th, 2009 @ 10:56 am

Please extend the tax credit for at least 6 more months. The process to buy a house is not easy. The easiest part of the process is getting approved by the mortgage bank. The hardest part is finding the right house that its going to meet your needs because its a long commitment.