Over the last few days, I have had several people ask me if they should buy a house now. My answer is that they should if they have the cash to buy now. Houses and property are on sale and purchasing now will prepare you for the future. This preparation will only be successful if you purchase with cash. That tends to stop many people.
However, over these last few days the question has been more in time with the expiration of the $8000 tax credit that expires at the end of this week. Should you buy or not.
The simple answer is this – can you afford to buy? If you are not in a position to buy then the answer is no. If your finances allow you to buy, and you are working according to your plan, then take advantage of the tax credit and buy a house.
Most people think they are missing out on something if they do not get this “huge” credit. While the tax credit is nice, what will that credit do if you wind up unable to pay the mortgage. What will the $8000 do when the “joys” of being a homeowner actually kick in and you have already spent the $8000? By the way, to those of you who have never owned a house, the “joys” are things that break down that we are typically financially unprepared to handle.
For me, as a coach, I have not and will not encourage someone to buy a house to get any tax break unless they are ready to take on the challenges that home ownership provides and are financially set to manage a mortgage.
What about you – buy or pass?
