The best time to buy your first home is now. Interest rates are at an all time low, home prices have essentially bottomed-out, and the government is giving away an $8,000 tax credit to first-time homeowners who purchase by April 30, 2010.

#1 - $8,000 Tax Credit from the Government Extended Through April 2010.

First-time homeowners are defined as someone who did not own another main home at any time during the three years prior to the date of purchase. For example, if you buy a home on December 15, 2009, you cannot take the credit for that home if you owned, or had an ownership interest in, another home at any time from December 15, 2006 through December 15, 2009. So if the last time you owned a home was prior to December 15, 2006 you are eligible for the credit even though it is really not your "first" home. For married joint filers, both must meet the first-time homeowners test to take the credit on a joint return.

A tax credit is defined as an item that reduces your actual tax. It differs from a tax deduction that reduces only your taxable income. A tax credit is generally much more valuable than a deduction. The tax credit reduces the actual amount of tax that must be paid. A deduction, on the other hand, only reduces the taxable income. Therefore, the tax deduction is subject to the variation in the progressive tax rate. A tax credit does not depend on the tax rate and so it is of equal value to a taxpayer regardless of his income level.

Simply put, a first-time homeowner will receive $8,000 back from the government when a tax return is filed. Of course, the government will withhold any taxes owed first. The point is, THIS IS FREE MONEY!

#2 - Low Interest Rates.

Rates on a 30 year fixed home loan are at about 5% right now. In 2006, 2007 and 2008 rates topped 6.5%. When you consider how interest rates impact your monthly payments, this is a huge savings that you don't want to miss out on.

What this means is that if you purchased a $500,000 home with a 6.5% interest rate, your monthly principal and interest payment would be approximately $3,160. The same home purchased with an interest rate of 5% would have a monthly payment of approximately $2,684. This is a monthly savings of $476. A $1,000,000 home at 6.5% would be about $6,320, and at 5% would be about $5,368. This amounts to a monthly savings of $952.

#3 - Property Values on the Rise.

National home sales have fallen 15.6% from 2006 through 2009, according to The National Association of Realtors. However, for the last quarter property values have seen an increase. With a stabilizing economy, this trend will likely continue. This means that now is the time to get the best price from a prospective seller and have the highest negotiating power.

#4 - Tax Savings.

The ability to write-off property taxes and interest means more money in your pocket. A rent vs. buy calculator is a great tool to use to fully understand the savings dollar for dollar.

#5 - Invest for your Future.

By purchasing a home in a buyers market, you will begin to build equity now, instead of throwing your money away on rent. Assuming property values will continue to climb, in five years you will have added value to your property and will be in a position to upgrade, or stay in your existing home and watch the equity rise.