Sounds like on the compromise the $15K tax credit got scrapped in favor of an $8000 one.
From what I've been able to find, it's a first time buyer credit (have not owned a home in three years), it does not have to be re-paid and will apply to home purchases between 1/1/09 and 8/31/09.
There will be some income limitations, I've not been able to find those yet.
It's for the best that it got chopped. I think that it could've gotten chopped more, and I say this as someone who -- at least at this point -- intends to take advantage of the $8k.
As CF said on a prior thread, it'll serve more to prop up the bubble than allow it deflate. A better fix would've been to require mortgage lenders to attempt a certain percentage of foreclosure workouts relative to their total holdings. That would address a lot of the existing mortgages on the books and indirectly help give a market value to the bundled securities made up of those mortgages.
Really, the only thing the $8k will do is help sop up the extra supply of housing out there. And I can tell you it's going to be hard to be a first time home buyer if I or my wife are unemployed, or are working three minimum wage jobs just to stay afloat.
How about applying that towards the principle on the house I already have and plan to keep?
I agree it is running back into an industry which helped spur this debacle in the first place. It won't make a substantive difference in markets which are affected by high unemployment right now, which happen to be some of the real estate markets which got over-heated. IOW- It's not going to get rid of a glut of foreclosed properties if people don't have enough income to get a loan which was a big piece of this debacle in the first place.
Mortgage work-outs are only appropriate if the borrower has enough income to make the loan perform. If they have no income, how long could or should the government be expected to intervene in the process?
For those who believe in voodoo economics (I do) the $8000 credit *might* be ploughed into home improvements which helps create jobs in the labor markets and in the home improvement product market, or someone might buy a car with it, or invest it in green technology like a ground source heat pump or solar for their home. There's still estimated to be about $1500 in total credits for energy efficient windows, heat/air, roofing, etc.
This $8000 credit will go a lot further for consumer spending than the $400 credit that about anyone (I believe that's the tax cut for 95% of all Americans) will get.
$8000 isn't $15K but it still beats a sharp stick in the eye any old day. [;)]
According to this article workers will get a whopping $13 added to weekly paychecks:
http://www.breitbart.com/article.php?id=D96A51G80&show_article=1
Stimulating.
quote:
Originally posted by sgrizzle
How about applying that towards the principle on the house I already have and plan to keep?
Can we count on you then to take whatever you weren't going to put towards principle and spend it on a(nother) flat screen tv? No? How bout a GMC Yukon? Vacation to the Mall of America? Seriously, it's your call!
And I definitely don't think everyone should get a redone mortgage. There're going to be foreclosures, and that's just the way it is. I definitely understand that. But there're supposedly a lot of borrowers with good credit out there who took subprime loans because of the teaser rates and general lack of upfront costs, and they're still being foreclosed on. Even converting prime buyers into 30yr fixed would stabilize some of the market.
The unemployment thing is going to become a major issue really quickly. You can't very well qualify for credit if you're unemployed or making $9.00 an hour.
quote:
Originally posted by we vs us
quote:
Originally posted by sgrizzle
How about applying that towards the principle on the house I already have and plan to keep?
Can we count on you then to take whatever you weren't going to put towards principle and spend it on a(nother) flat screen tv? No? How bout a GMC Yukon? Vacation to the Mall of America? Seriously, it's your call!
If they give me $8000, I'll go buy two flat screens, and a large "Judgement Day" from Joe Mommas!
quote:
Originally posted by sgrizzle
quote:
Originally posted by we vs us
quote:
Originally posted by sgrizzle
How about applying that towards the principle on the house I already have and plan to keep?
Can we count on you then to take whatever you weren't going to put towards principle and spend it on a(nother) flat screen tv? No? How bout a GMC Yukon? Vacation to the Mall of America? Seriously, it's your call!
If they give me $8000, I'll go buy two flat screens, and a large "Judgement Day" from Joe Mommas!
I'll be happy to donate my $8k to your defibrillator.
quote:
Originally posted by guido911
According to this article workers will get a whopping $13 added to weekly paychecks:
http://www.breitbart.com/article.php?id=D96A51G80&show_article=1
Stimulating.
What have I been saying all along?
Come on now, say it with me:
CHUMP CHANGE!!!!
quote:
Originally posted by Conan71
quote:
Originally posted by guido911
According to this article workers will get a whopping $13 added to weekly paychecks:
http://www.breitbart.com/article.php?id=D96A51G80&show_article=1
Stimulating.
What have I been saying all along?
Come on now, say it with me:
CHUMP CHANGE!!!!
Here's that Obamabot who says she will not have to worry about gas and her mortgage once Obama gets elected:
http://www.youtube.com/watch?v=P36x8rTb3jI
I remember when Ronald Reagan's tax cut showed up in our paychecks. I had to pull an old stub to see any difference. It was a matter of a few dollars. Of course, I was a student and not upper income. The upper crusties got really big cuts.
Not long after that Reagan's huge social security tax increase came through. It took a big chunk out of my paycheck. We've paid those increased ss taxes all these years.
Of course I don't mind paying taxes. I believe in carrying my share of the common burden.
What gets on my nerves is the absense of good wages. You know -- like Tulsa.
There are plenty of opportunities in Tulsa to make good wages.
Of course you have to be at least mildly intelligent and have at least little work ethic.
As for paying taxes... I am all for paying as little as possible.
quote:
Originally posted by TeeDub
There are plenty of opportunities in Tulsa to make good wages.
Of course you have to be at least mildly intelligent and have at least little work ethic.
As for paying taxes... I am all for paying as little as possible.
Or a MIG/TIG welder.
quote:
Originally posted by Conan71
From what I've been able to find, it's a first time buyer credit (have not owned a home in three years), it does not have to be re-paid and will apply to home purchases between 1/1/09 and 8/31/09.
Guess we should have waited to buy. We get to start giving our $7500 back in chunks starting in 2010. [B)]
Seems a little unfair, but nobody ever said life was fair.
quote:
Originally posted by TeeDub
There are plenty of opportunities in Tulsa to make good wages.
Of course you have to be at least mildly intelligent and have at least little work ethic.
As for paying taxes... I am all for paying as little as possible.
I'm a genius workaholic that didn't major in anything petroleum related. When I see a decent wage in Tulsa, I'll tell you.
quote:
Originally posted by nathanm
quote:
Originally posted by Conan71
From what I've been able to find, it's a first time buyer credit (have not owned a home in three years), it does not have to be re-paid and will apply to home purchases between 1/1/09 and 8/31/09.
Guess we should have waited to buy. We get to start giving our $7500 back in chunks starting in 2010. [B)]
Seems a little unfair, but nobody ever said life was fair.
I have a feeling some Congressman will step in at some point in the sense of "fairness" and waive the re-payment.
About Caterpillar rehiring people laid off if the stimulus package passes...not so much:
http://blogs.abcnews.com/politicalpunch/2009/02/doh-caterpillar.html
The question is whether Obama misunderstood Cat's position or he flat lied about it. In any event, he sure got mileage out of that story.
quote:
Originally posted by we vs us
Or a MIG/TIG welder.
I have access to both a MIG and a TIG. Unfortunately my skill level also requires access to a grinder.
quote:
Originally posted by sgrizzle
How about applying that towards the principle on the house I already have and plan to keep?
You got that right sqrizzle! I bought my home within my means back in 1987 when my mortgage rate was 11.5%, paid off the mortgage 13 years early with never a late payment, and never received any tax breaks beyond the normal interest and closing points deductions. Where are my tax breaks for being a financially responsible person and budgeting and spending my money wisely?
These homebuyer tax credits are an insult to me and any responsible person that chooses to live within their income. If you can't afford to buy a home with the normal interest and points deductions, then you have no business being a homeowner.
quote:
Originally posted by Steve
These homebuyer tax credits are an insult to me and any responsible person that chooses to live within their income. If you can't afford to buy a home with the normal interest and points deductions, then you have no business being a homeowner.
You're missing the point. It's not about making homes more
affordable, it's about giving people an incentive to buy, thus reducing inventory and thereby slowing the collapse in value.
Of course, that's a double edged sword. The falling values are good for people in states with no income tax and stupidly high property tax, but the reduction in property values (and thereby tax receipts) is decimating city and state budgets.
Don't forget that something around 35% of the 'stimulus' package is tax cuts. That definitely helps you out, even if only a small amount. Of course, the value of a tax cut as economic stimulus at a time when people are more likely to save money than spend it is minimal at best, but that's the Republican party for you.
I'm not against tax cuts in principle, but when the stated goal is to put people to work by spending money, it's like using a box cutter to saw a 2x4.
quote:
Originally posted by nathanm
quote:
Originally posted by Steve
These homebuyer tax credits are an insult to me and any responsible person that chooses to live within their income. If you can't afford to buy a home with the normal interest and points deductions, then you have no business being a homeowner.
You're missing the point. It's not about making homes more affordable, it's about giving people an incentive to buy, thus reducing inventory and thereby slowing the collapse in value.
The incentive to buy should be whether it is cheaper to buy vs. rent. With mortgage rates being at historic lows for the past 4-5 years, that should be incentive enough to buy, as long as the borrower is credit worthy and fully understands the terms and can live with any potential future adjustments.
I understand about slowing the collapse in real estate prices, but giving tax breaks to hopefully offset this is just delaying the inevitable, passing unnecessary government debt on to future generations. Prices will rise and fall over time with the markets, a fact of real estate ownership.
I bought my home not for an investment, but for a roof over my head and a place to live my life and reflect my tastes and values. I bought the most house I could afford 22 years ago, paid for it, continue to live in that same house today, and have no intention of ever living anywhere else. There should be no tax benefits for any homeowner beyond the usual interest and points deductions; any extra tax credits only encourages spending beyond one's means, and sets up another pending real estate debacle in the future.
quote:
Originally posted by Steve
The incentive to buy should be whether it is cheaper to buy vs. rent. With mortgage rates being at historic lows for the past 4-5 years, that should be incentive enough to buy, as long as the borrower is credit worthy and fully understands the terms and can live with any potential future adjustments.
Were people not reluctant to lock themselves into long term debt due to the current economic situation, you'd be completely right. We already do more than we should to induce people to choose homeownership. (Why on earth should mortgage interest be deductible, but auto loan interest or credit card interest not?)
Right now most mortgage activity is just people refinancing into lower rates (at least when they still have the value to support a refi), which is much less economically productive than getting more first time homebuyers to take the leap.
I just can't see how general tax cuts and rebates are going to do anything but go into savings, pay back debts(so the banks get helped at both ends), and get fed into slot machines. Especially when it is an insignificant amount relative to even very modest incomes. The only way to get people to do what is intended with the money seems to be credits. However, I don't see how any of it can be effective if we're losing jobs by the tens of thousands.
quote:
Originally posted by Conan71
Sounds like on the compromise the $15K tax credit got scrapped in favor of an $8000 one.
From what I've been able to find, it's a first time buyer credit (have not owned a home in three years), it does not have to be re-paid and will apply to home purchases between 1/1/09 and 8/31/09.
There will be some income limitations, I've not been able to find those yet.
-12/01/09