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Old 02-16-2009, 06:04 PM
 
169 posts, read 607,799 times
Reputation: 63

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Quote:
Originally Posted by MikeinIE View Post
20 or 30 years ago houses costed a fraction of what they are today which makes a huge difference on the amount you have to put down.
They cost a fraction b/c we didn't have creative loans like what we have now (no down, 5%, 40 year, 30 year, etc). The existence of loans like these pushes the price up. Reality is the prices need to come down still and we need to start thinking of a home as something other than an ATM or a short term investment.
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Old 02-16-2009, 06:10 PM
 
739 posts, read 2,697,088 times
Reputation: 308
Quote:
Originally Posted by bproven View Post
They cost a fraction b/c we didn't have creative loans like what we have now (no down, 5%, 40 year, 30 year, etc). The existence of loans like these pushes the price up. Reality is the prices need to come down still and we need to start thinking of a home as something other than an ATM or a short term investment.
I doubt it was purely the "creative loans" that drove up prices. What about places like Southern California where there is literally no more land to build on. My wife comes from an Orange County beach city where there are literally 2 more lots to build on (he dad is a code enforcement officer for the city and is where I got that from).

But I do agree that people need to treat their homes like, well, HOMES. Not short term investments. I want to buy in Texas and you really can not make money, even in a good market, off short term investments (generally speaking of course). Sort of forces people to buy homes and not notes of investments.
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Old 02-16-2009, 06:28 PM
 
169 posts, read 607,799 times
Reputation: 63
Quote:
Originally Posted by shaxs View Post
I doubt it was purely the "creative loans" that drove up prices. What about places like Southern California where there is literally no more land to build on. My wife comes from an Orange County beach city where there are literally 2 more lots to build on (he dad is a code enforcement officer for the city and is where I got that from).

But I do agree that people need to treat their homes like, well, HOMES. Not short term investments. I want to buy in Texas and you really can not make money, even in a good market, off short term investments (generally speaking of course). Sort of forces people to buy homes and not notes of investments.
True, but south CA is really a special case here. I was oversimplifying this - it is not purely these types of loans. However they are a major contributor. People looking for their first home should be saving (tough word) for their home not expecting to jump into one with no money down or less than 5%. In most cases, these people are just starting careers and may lose their jobs or have to move (especially in this economy). With no money down or (low money down) they will end up upside down if the chips don't fall just right - especially now more than ever.
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Old 02-16-2009, 06:29 PM
 
67 posts, read 85,327 times
Reputation: 28
The details of the 8k tax credit are yet to be revealed, make sure all of you first time buyers do not overlook the requirments.Big govt. has been known to throw us a few curveballs, just like in the proposed 15k tax credit package.
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Old 02-16-2009, 07:06 PM
 
397 posts, read 735,532 times
Reputation: 498
Default What's it all about, Alfie?

Quote:
Originally Posted by MikeinIE View Post
Beware of the minimum 5% down stipulation. I personally hope they take that out.It doesnt help first time buyers who cant afford more than the 3.5% FHA loan.
I just read through the Section 1006 re: FTHB credit and didn't see anything about a 5% stipulation.
Please enlighten me...I'm SO confused...am I alone? My DD may be in the market for a house before the end of the year (an $8K credit might be incentive) but now I can't decipher the plan at all. What do they mean "strike out $3,750.00 and replace with $4,000.00"...is this a credit that MUST be taken over 2 years? Is that what the "5% stipulation" is about????????????????
Yikes!
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Old 02-16-2009, 08:12 PM
 
67 posts, read 85,327 times
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I was reffering to the proposed plan of 15k which would have applied to any home buyer. It was however, cut down to 8k first time buyer, but im not sure if the same 5% down requirement applies to this tax credit.Hopefully they removed it.Also in the original plan you would have had to keep the house for a minimum of 3yrs. otherwise you would have to pay the 15k credit back. Like I said I am uncertain of the requirements and conditions of the new 8k package other than the fact that you would have to be a first time buyer.
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Old 02-16-2009, 09:15 PM
 
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,101,771 times
Reputation: 952
Quote:
Originally Posted by bproven View Post
See my same response from your post in the RealEstate forum - a bit of a cross post, but we have dup thread already anyway :

http://www.city-data.com/forum/7493045-post200.html

---
I think people better get used to 10 or better yet 20% down again - anything else is what got us into the mess in the first place. If you are not hanging around for 5 years (you may need to move) then maybe you should rent. If you cannot afford 20% - rent till you can. Home ownership is not a right. I'm not seeing what is so bad about going back to the way things were 20-30 years ago.
Wrong. VA loans are no money down, and their default rate is lower than FHA and conventional, regardless of loan to value. The reason we are in this mess is strictly due to the lack of underwriting. 20-30 years ago FHA and VA existed as well. Unfortunately people seem to have this perception that 20 years ago everybody put 20% down and paid off their homes within 15 years, which is simply not the truth. Anyone that experienced the housing downturn in CA in the '90s can tell you that. I do agree that homeownership is not a right, as well as the fact that some people should just rent. Just realize that FHA has been around (in it's current incarnation) since the 1960's, if I'm not mistaken. It has helped many a first time buyer achieve homeownership and for years has had a very low default rate as well, again regardless of loan to value.

Quote:
Originally Posted by bproven View Post
They cost a fraction b/c we didn't have creative loans like what we have now (no down, 5%, 40 year, 30 year, etc). The existence of loans like these pushes the price up. Reality is the prices need to come down still and we need to start thinking of a home as something other than an ATM or a short term investment.
They cost a fraction because money was worth more back then. Simple inflation. Why do groceries, rent, utilities, gasoline, cars, insurance, etc. cost more? There is no exotic loan driving the price of these things up. Since when is a 30 year fixed mortgage "exotic"? Not only that, but blanket statements simply cannot be made regarding real estate prices. Prices in Las Vegas right now are below 2003 levels. Some are at 1999 levels. These numbers are not even inflation adjusted. This is well below replacement cost. Try building a home for what you can currently buy one for in Vegas (I believe we are averageing between $80 and $90 a sq ft). It's not going to happen. Many places in the country did not even experience a bubble, and are at historical inflation adjusted norms. I do agree that people need to change their perception of housing though.
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Old 02-16-2009, 09:57 PM
 
Location: West, Southwest, East & Northeast
3,446 posts, read 6,454,729 times
Reputation: 867
New homebuyers to get $8,000 cash back - Feb. 16, 2009
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Old 02-17-2009, 04:42 AM
 
397 posts, read 735,532 times
Reputation: 498
Wink Adding to the confusion!

From the link above:
"Not exactly. Billings won't get $8,000 on top of his current refund, but he would turn that small refund into a much larger one. If his total tax liability came to $6,000, but he had $7,000 withheld from his payroll, he would normally receive a $1,000 refund. With this credit, his refund would total $8,000. If the credit were non-refundable, as was originally proposed in the Senate version of the stimulus package, he would have only received $6,000, or the total amount he paid in."
See? This just adds to people's confusion...a "refundable credit" is just that...refundable! So, using the figures above, with tax of $6K and w/h of $7K your overpayment (refund) would be $1,000...add in the $8K credit and your total refund would be $9,000 (not $8,000). [and, if it were NON-refundable he would have rec'd his full $7K withholding, not $6K]
I also do NOT believe that no forms are required. That's a misleading statement because w/o a legal form everyone and his cousin would just take the credit, figuring what-the-heck!!

Clear as mud?!
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Old 02-17-2009, 10:12 AM
 
67 posts, read 85,327 times
Reputation: 28
Thats the problem with the last one they tried to pass.Its not really clear. We will have to read this new one in its entirety.They always try to slip something in there to make it either hard to get the credit or so that you dont get the full credit.First time buyers should be very cautious if you are counting on this bill and read all the fine print. Like I said earlier in some of my other blogs, no one even mentioned the 5% down requirment in the 15k credit bill that got shot down. Oh and btw, is there even such a thing as a 5% down loan? I was told no by my lender. So what kind of BS were they trying to pull on that last proposed bill? you decide.
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