Mortgages – Did The Tax Credit Save You From Foreclosure?
The tax credit that was available for real estate purchases has gone and, apart from those still trying to conclude everything by the end of this month, a memory now to many. However, the tax credit, while bringing buyers into the market and helping to stabilize home prices, may just have had one other welcome benefit. I am sure there are many home owners who were on the brink of foreclosure that were saved by the tax credits, or at least, their mortgage was.
It’s an interesting spin-off. The majority of foreclosures over the past two years have been brought on mainly by issues of equity. Many mortgage holders found that properties had fallen in value to the point where the mortgage value was greater than the home’s value. This of course results in negative equity.
The tax credit brought buyers into the market and with more buyers comes an increase in demand. This increase in demand helped to stabilize prices and to prevent and further large drops in home valuations. Those that were close to negative equity found that prices remained at least high enough for them to sell out without a loss, or to maintain their properties. Those that maintained their properties will soon reap the benefits as home prices start to rise again.
Now that the tax credit effect is starting to wear off, is this a good time to sell? Every situation is different and a blanket answer would be irresponsible. Talk to your lender, talk to a real estate agent then consider your own situation.
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