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Mortgage loans and the approval process have NOT been reformed. And now the government has now conspired with the mortgage companies and the next wave of sub-prime borrowers, the later being those who need an $8,000 tax credit to buy property. This conspiracy is even more insideous than the previous.
First off, this program has been in play for some time - and it is actually coming up on its expiration time
Then we must remember that the borrower IS QUALIFIED as for their credit, income and debt ratios. Keep in mind that there are still government guaranteed loans (to purchase a home) with nothing down whatsoever (100% LTV) - and they have been around for decades - literally.
Last, the tax credit type program has been used before during similar downturns in the real estate market. So, this one is nothing new.
Housing is one area where I am against a lot of the socialistic policies of the American government, such as the mortgage interest tax deduction. All that does is keep the price of housing inflated. The $8,000 tax credit is doing the same thing, although I think it's effect is very minor.
Considering that the tax credit is limited to first-time homebuyers, you would be correct that any affect on housing prices would be very minor. When looking at home purchases in an area where the average home price is about a quarter million, (such as where I am) that $8,000 credit is literally a drop in the bucket.
A few questions
A 3% down payment is all that is needed?
With interest rates set low isn't that what got us into trouble in the first place?
How does this encourage savings?
Please do let me understand. So everything you speak of is from "personal experience" rather than knowledge? Kindly show your pride and answer the question that I've just asked.
Yes EVERYTHING I speak of is from personal knowledge, and before you respond any further I do not qualify for the $8K credit due to the phase out at $75K. I also know those personally who still can not obtain a mortgage because of the debt to income ratio as well as the amount of the homes in their area. The 8K credit means absolutely NOTHING if you can not obtain a mortgage.
Wait until the Gubmint reveals its plan to reduce the amount you can contribute to your 401K. They've got to get their revenue somehow. More hidden taxes on the way. Bend over America. Grab the ankles and enjoy it.
Lending guidelines have gone back to where they were in the Mid-90's. Sub-prime loans, stated income, no doc loans are gone - and have been gone for close to two years now.
Not sure what the agenda is with your post - but relax - the free market has policed itself and the banks/companies who offer mortgages - will have a long memory regarding mortgage risk and future slackening of guidelines.
I'd just like to know why my tax dollars are going to buying people new cars and houses. If you couldn't afford the darn things without the 'credit' (aka, handout), then you should not buy it.
A few questions
A 3% down payment is all that is needed?
With interest rates set low isn't that what got us into trouble in the first place?
How does this encourage savings?
Just wait. Legislation will soon be passed thanks to the lobbying of greedy Real Estate agents, which will expand and extend this bogus tax credit.
These Real Estate agents are the same ones who were jumping for joy when sticking people with $50,000 incomes in $400,000 homes.
Now they want taxpayers to foot the bill for an increase in their commissions. Meanwhile it will only put off the rest of the market correction that has to take place.
What a bunch of BS!
Addendum: I am a first time home buyer in the market who would qualify for the tax credit.
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