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Old 07-31-2008, 12:06 PM
 
Location: Cary, NC
1,036 posts, read 3,627,833 times
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In the end it should benefit everyone. If it spurs more to buy homes it will stabalize the housing market (its not going to lift it much) it will benefit current home owners as well.

The important part is its a loan, not a gift. I prefer it that way... I don't want to give up tax money when we are already in huge debt as a country.
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Old 07-31-2008, 12:36 PM
 
3,627 posts, read 12,405,273 times
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I already got a sales call today [somebody trying to push refinance] and they said it would be harder to get a mortgage after October because of this bill.

Well, I blew him off, but is that true? I am looking at putting my home on the market probably in early October and was wondering if anyone new. My home would be a good "first time" home [smallest home in nice neighborhood]
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Old 07-31-2008, 12:40 PM
 
2,639 posts, read 5,057,601 times
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Quote:
Originally Posted by grannynancy View Post
I already got a sales call today [somebody trying to push refinance] and they said it would be harder to get a mortgage after October because of this bill.

Well, I blew him off, but is that true? I am looking at putting my home on the market probably in early October and was wondering if anyone new. My home would be a good "first time" home [smallest home in nice neighborhood]
With the butchering of downpayment assistance and possibly higher down payment requirements, in addition to stricter lending standards being a symptom, it's definitely going to be harder to get a mortgage.
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Old 07-31-2008, 01:12 PM
 
4,542 posts, read 11,547,065 times
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Other than DPA going away, which is a drop in the bucket, it should not be any harder to get a mortgage come fall than right now. The 'big' changes have all ready taken place.
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Old 07-31-2008, 01:40 PM
 
Location: Durham, NC
1,364 posts, read 5,447,934 times
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I have saved for 10 years to have 20% down to buy a home.

I have a 780 credit score.

Do you all resent me for using this tax credit?





(What I don't understand is why make it retroactive? How did this stimulate anything if it wasn't even in the minds of people who bought on May 1?)
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Old 07-31-2008, 02:30 PM
GLS
 
1,985 posts, read 4,740,103 times
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Quote:
Originally Posted by sneezecake View Post
I have saved for 10 years to have 20% down to buy a home.

I have a 780 credit score.

Do you all resent me for using this tax credit?





(What I don't understand is why make it retroactive? How did this stimulate anything if it wasn't even in the minds of people who bought on May 1?)
I am sending you a rep point for fiscal responsibility. If you have the perseverance to save a sizable down payment over 10 years, and the discipline to earn a 780 credit score, your probability of succeeding is better than average. Acknowledging potential set-backs such as job loss or long-term illness, the risk of you walking away and your house ending up in foreclosure is low. I am happy for you because you will be able to buy a home. I am happy for me because the government is less likely to approach me to bail you out if there is a set-back.

As far as my opinion on the tax credit, it's the new rule, so take advantage of it. I have no resentment because you are incorporating it into a proactive plan vs a crutch applied retrospectively to remedy a bad decision. Good luck.
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Old 07-31-2008, 02:41 PM
 
2,639 posts, read 5,057,601 times
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Quote:
Originally Posted by sneezecake View Post
I have saved for 10 years to have 20% down to buy a home.

I have a 780 credit score.

Do you all resent me for using this tax credit?





(What I don't understand is why make it retroactive? How did this stimulate anything if it wasn't even in the minds of people who bought on May 1?)
You're quite responsible. Make sure you reconcile with yourself that this is not a tax "credit". It's essentially a loan against your tax to try and help first time buyers.

The reason I emphasize that point and I'm sure other people will shortly come in and lambaste me for it...is that a credit assumes the money is to you and doesn't need to be repaid. This has to be repaid. If people aren't prepared for the reality of having to pay this back, they're going to end up no better than the people who were forced into foreclosure. That means budgeting accordingly for this new expense that you're taking on by accepting this temporary infusion of funds.
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Old 07-31-2008, 02:48 PM
 
Location: Durham, NC
1,364 posts, read 5,447,934 times
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Quote:
Originally Posted by revelated View Post
You're quite responsible. Make sure you reconcile with yourself that this is not a tax "credit". It's essentially a loan against your tax to try and help first time buyers.

The reason I emphasize that point and I'm sure other people will shortly come in and lambaste me for it...is that a credit assumes the money is to you and doesn't need to be repaid. This has to be repaid. If people aren't prepared for the reality of having to pay this back, they're going to end up no better than the people who were forced into foreclosure. That means budgeting accordingly for this new expense that you're taking on by accepting this temporary infusion of funds.
Of course, but on the flip side, many first time buyers will make up for this credit in the deduction they get in Interest on their mortgages. I've taken the standard deduction for my entire life, and now I will get to itemize. The net result, even though I owe the gov't 500/year, might still be a positive.

Plus, the re-payment won't start for 2 years, and I plan to be making more money in 2 years than I am today
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Old 07-31-2008, 03:00 PM
 
2,639 posts, read 5,057,601 times
Reputation: 2346
Quote:
Originally Posted by sneezecake View Post
Of course, but on the flip side, many first time buyers will make up for this credit in the deduction they get in Interest on their mortgages. I've taken the standard deduction for my entire life, and now I will get to itemize. The net result, even though I owe the gov't 500/year, might still be a positive.

Plus, the re-payment won't start for 2 years, and I plan to be making more money in 2 years than I am today
Like I said, you're clearly responsible. I'm in a similar situation - just without the down payment and while my credit is pristine, the score isn't quite as high due to my not having enough long-term credit established yet.

I just am quite familiar with how these things work. Consumers who don't pay close attention to this are going to get nailed hard and a tax lien isn't something you can walk away from. Plus the Treasury is basically trying to use this under the assumption that the property value will rise again - a big assumption to make right now.

The biggest problem population is going to be the consumers who already owed tax in excess of their "credit", which then gets applied against the debt so they're leaping happy thinking they got a break, when in reality the government just added to their debt load by that amount.

I sure hope consumers not comfortable filing their own tax returns are turning to H&R Block or Jackson Hewitt or something...otherwise there's going to be a lot of tax issues.
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Old 07-31-2008, 04:02 PM
 
Location: Cary, NC
1,036 posts, read 3,627,833 times
Reputation: 503
The only change that makes getting a mortgage harder will be:

FHA requiring 3.5% down payment, a .5% increase.
Seller-funded DPA programs will be gone.

DPA programs will still exist from the comments I have seen on the bill, its just the seller will not be allowed to fund it. This is to close the loophole that was basically the same as a seller/builder giving the buyer a "kick-back" to purchase the home. A bona-fide non-profit, family member or state, county, city government organization can still offer DPA from what I have been told.

That said, I already got 3 emails from the seller-funded DPA organizations today about how they will keep up the "good fight". They are going to take it to court again and try to introduce bills to prevent their jobs from going extinct.

Everything else will either have no effect or be a slight positive. Most of the regulations are to help at-risk borrowers refinance (but will likely not help much) or boost the liquidity and reach of Fannie/Freddie. One aspect that is not getting much attention is the new national loan officer registry will be expanded to cover more loan officers. It requires background checks and minimum standards (too minimum in my opinion) for most loan officers.
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