Home Buying for Beginners

With the tax-credit deadline looming, our reporter decides whether to jump in now or bide his time.

My wife, Christina, and I watched last year as home prices in Washington, D.C., seemed to bottom out, bummed that we couldn't take advantage of the generous federal income-tax credits for first-time buyers because we didn't have enough money for a down payment. Then the credit, which is worth up to $8,000, was extended to first-timers who have a home under contract by April 30.

It's never a good idea to make a life-changing decision based on a tax credit. But we've been talking about making the leap from renters to owners for a while, and we did a gut-check to gauge our commitment. Are we ready for the extra expenses? Yes. In the months since the tax credit was extended, we have put aside enough to cover a down payment and closing costs. Our jobs -- and income prospects -- are stable. We have good credit and no debt. Can we stay put for the next five years and make a home purchase worthwhile? Sure. Washington has a stable job market and plenty of opportunities for fun.

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Contributing Editor, Kiplinger's Personal Finance