If you thought that buying a home was cheap because prices are down, buying a home just got cheaper - $6,500 cheaper.

Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6,500. First-time homebuyers — or anyone who has not owned a home in the last three years — would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010, and close by June 30.

"This is probably the last extension," said Mike DeAnna, Broker at Ohio Family Realty, Inc. based in North Olmsted. “The typical closing costs on an average home loan are around $4,000. This more than offsets what is required to close on a transaction.”

The credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.

“People should realize that you need only 3.5% down payment to buy a primary residence using an FHA type loan. That is only $5,600 on a $160,000 home and the government is giving back either $$8,000 or $6,500 depending upon your situation,” said DeAnna.

Your principle and interest payment is only approximately $926 per month on a $160,000 purchase with 3.5% down at 6 percent interest amortized over 30 years. Many people do not realize that renting is the most expensive way of living. “You can be in your own home or condo for $800 - $1,200 per month depending upon how fancy you want to get,” said DeAnna. “It makes sense to pay off your own mortgage instead of someone else’s.”

Buyers wanting free buyer representation should contact Ohio Family Realty, Inc. at 440-801-4444 or visit their web site at Ohio Family Realty.com.

The credit would be extended an additional year, until June 30, 2011, for members of the military serving outside the United States for at least 90 days.