Dear Liz: Do you foresee the $8,000 tax credit for first-time home buyers extending beyond the current Dec. 1 deadline?
Answer: When it comes to taxes, nobody has a crystal ball. You’d be smart to take advantage of the credit now if you’re financially able to buy a home and willing to stay put for a while rather than hope the credit will be extended and be disappointed.
If you’re not ready to buy a home, though, no tax incentive should rush you into the purchase prematurely. Savvy buyers make sure they have a decent down payment (10% is good, 20% is better), that they can afford the payments using a 30-year, fixed-rate loan and that after closing costs are paid they still have savings equal to at least three mortgage payments.