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Old 02-04-2009, 06:24 AM
 
30 posts, read 92,283 times
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Couple the 4% rates with a 15,000 credit, which may not have to be repaid, and houses will be selling alot faster, which they already are anyway.
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Old 02-04-2009, 07:45 AM
 
27,903 posts, read 33,448,961 times
Reputation: 4016
Quote:
THE BASIC PLAN
1. Plan in effect through 12/31/2010
2. GSEs will purchase mortgages at a rate of 160 basis points over the 10‐year treasury
3. Maximum loan amount of $721,000 (increased GSE limit for this plan)
4. 2 pools of loans:
a) GSEs would refinance all current GSE borrowers regardless of their credit or LTV
(30.7 million borrowers). [This part of the plan is essential to allow lots of
households to qualify and also to streamline the process so that other
borrowers can access the banks who would otherwise be unable to handle 30
million applications at once.] Since the GSEs already have all the credit risk on
these borrowers, they would reduce rates for this group while also lowering the
government’s credit risk exposure.
b) NON GSE Borrowers: Additional refinancings would occur as borrowers qualify
(we estimate another 9.7 million borrowers). For 80% LTV, rate would be 160
basis points over 10‐year. Would do higher LTV at slightly higher rates to
compensate for additional credit risk. Maximum LTV is 95% (after that use FHA
and Hope for Homeowners)
ASSUMPTIONS FOR SIMULATIONS
1. Only borrowers that save at least $100/month would take up the plan.
2. Mortgage rate of 4% for these simulations (current rate would be 4.4%, so more models
will be run shortly)
http://www4.gsb.columbia.edu/null?&e...file_id=571696

http://www4.gsb.columbia.edu/null?&e...file_id=571697
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Old 02-04-2009, 03:10 PM
 
Location: Humboldt Park, Chicago
2,686 posts, read 6,835,845 times
Reputation: 1174
Default c5turbo

You forgot to account for the 20% down you will need to put to qualify for those 4 and 6 percent rates.

That will reduce your loan amount and thus your interest savings.

So you have:

$330K - $66K (20 percent down payment) = $264K loan amount @ 4%
=$1260/mth

$330K - $66K (20 percent down payment) = $264K loan amount @ 4.5%
=$1338/mth

I included this as well as I think unless you time it perfect as I feel 4.5% is a more realistic rate.

$290K - $58K (20 percent down payment) = $232K loan amount @ 6%
=$1391/mth

Also, don't forget about the opportunity cost of additional $8K you have to put down. We should also account for additional interest deduction you will get from more interest payments at higher rate.
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Old 02-04-2009, 08:48 PM
 
27,903 posts, read 33,448,961 times
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Senate OKs $15,000 tax break for homebuyers - Yahoo! News (http://news.yahoo.com/s/ap/20090205/ap_on_go_co/congress_stimulus - broken link)
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Old 02-04-2009, 09:31 PM
 
199 posts, read 474,892 times
Reputation: 69
Any word if this needs to be paid back?
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Old 02-04-2009, 09:42 PM
 
27,903 posts, read 33,448,961 times
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The way I understand it is it's all stimulus meaning it's debt that will be paid back through taxes or long term stagnation or just slightly shorter term of deflation or we increase or income or cut down on spending (don't hold your breath on the latter)
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Old 02-04-2009, 09:42 PM
 
8,758 posts, read 8,641,696 times
Reputation: 1422
Quote:
Originally Posted by HappyTexan View Post
hyper promoted fear ?

Take a look at this link..these layoffs are not "hyper promoted".
They are real, very real.

Layoff Daily

I think you need to reread what I said. I said some of the doom and gloom is very real. The economy has a psychological component to it and that has been hyper manipulated to achieve an end result. Does everyone like the end result now?
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Old 02-04-2009, 09:43 PM
 
27,903 posts, read 33,448,961 times
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I think the main point is to ease those folks that were interested in buying but held off while the cardiac arrest was happening.
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Old 02-05-2009, 06:49 PM
 
Location: Durham, NC
426 posts, read 1,296,844 times
Reputation: 176
Quote:
Originally Posted by dixiegirl7 View Post
I think you need to reread what I said. I said some of the doom and gloom is very real. The economy has a psychological component to it and that has been hyper manipulated to achieve an end result. Does everyone like the end result now?
Wow, are you in a state of denial. The financial industry is *falling apart*. My Citibank stock has lost over 90% of its value. Banks are losing billions upon billions quarterly. How is that psychological? People are losing their jobs. Banks aren't lending money. Credit has tightened up for everyone. Small businesses can't pay their bills.

Or do you really believe Phil Gramm's "psychological recession" statement? (I can't believe some people actually believe that drivel...) What part of the problem can you attribute to psychology?
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Old 02-05-2009, 07:14 PM
 
132 posts, read 312,012 times
Reputation: 63
Quote:
Originally Posted by Bryan29 View Post
Couple the 4% rates with a 15,000 credit, which may not have to be repaid, and houses will be selling alot faster, which they already are anyway.
Huh? What do you base your statement on?

If people who are in a position to buy now at 5% or 5.5% are not buying, then a 100 basis point reduction won't make that much of a dent in most marketplaces.

You have to reduce 'risk' facing potential homebuyers. And the biggest risk most of us face is losing our jobs.
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