Chris Thomas Mortgage and Lending Denver, CO (303) 345-3683 Contact Profile
We're getting calls every day about the $7500 federal tax credit for first-time home buyers. To get to the IRS form and the instructions, go to our web site and click on the link at the bottom of the home page. While you're on our web site, check out all the other information we have available to educate buyers.
By Chris Thomas Mortgage and Lending with The Mortgage Experts at America's Mortgage, a Division of Cherry Creek Mortgage Co. NMLS #241555
Posted on January 20, 2009 12:39 AM
Christina - Yes, the House passed a version of the stimulus bill that does away with the requirement that homebuyers pay back the $7500 credit, as long as they keep the property for 3 years. The Senate can still make changes to that, so nothing is final yet.
It will definitely raise our national debt, but deficet spending has become the norm since the Clinton years ended. It's become the American way!
The credit is not intended to boost sales. It's main intent is to spur on the ancillary businesses - furniture, lanscaping, autos - you know, put $7500 in someone's hands and they're going to spend it - again, the American way.
This is all part and parcel with the mistaken belief that we can "spend our way out of the recession".
The housing industry will stay in a funk until the price of a house is low enough for the average family to buy without getting a risky mortgage. That means
a 30-year fixed rate mortgage. We have all become so used to the concept that housing values will continue upwards forever, we have forgotten that salaries have to continue upwards forever to pay for them. Either that, or sell people crappy loans, which is what we have been doing for the past 10 years. Now the chickens have come home to roost (don't you love these horrible metaphors I'm using?), and we are going to see a great many people out in the cold, hard rain.
The NAR is one of the chief advocates of keeping our heads in the sand. "All real estate is local" they proclaim. "It's turning around" they say. "Next quarter things will be fine."
Anyone who falls for that garbage will soon be out of business. It's NOT going to change until houses are cheap enough for the average guy to buy one with a 30-year fixed rate loan. That means a huge drop in value from where we are now - even though things have already gone down quite a bit.
On the bright side, this will eventually be good for our country. We will be forced to start thinking rationally again. That means actually taking Economics 101, instead of just saying we understand economics. While we're at it, better make that Econ 201 and 301 as well. Don't forget that there's micro- and macro-economics. Throw is in some finance classes as well. In essence, get an education.
America is the Land of Opportunity for the educated, and for no one else.
By the way, Christina, this is not directed at you at all. -)