I can totally see your perspective and honestly, it sounds like a great plan. I just see this being a bad thing for some that are not as fiscally responsible as you are. I also think it should be marketed to the public as an interest free LOAN and not anything else. Because that's really what it is.
fevmlo wrote:I personally cannot WAIT to get our tax credit, interest-free loan or not. We'll be using it to pay off the remainder of our car loan, instantly making us $430 a month better off. Sure, it's not going to put more people in houses who absolutely, positively cannot afford to buy one - but it would hardly be a good idea if it did, would it...? But as first-time buyers without an existing property to sell have more of a chance (all things considered) of buying anything right now, it might be a deciding factor for anyone who's almost convinced they want to buy but wavering a bit. Even if it just means they can pay off the remainder of an existing loan, credit card or whatever, after they buy the house - or if they're lucky enough not to have any existing debts, put it towards decorating and furnishing the place, or stick it in savings in case they suddenly find themselves needing a new furnace... yeah, I think it's a pretty good thing. We'd already closed on our house and been living in it for about six weeks by the time this bill was announced, but I have to say I was delighted when I realised we'd qualify for that money. By January, our one remaining credit card balance will be gone, and then we'll just about be able to pay off the car with what we get from the tax credit plus the refund we'd have had anyway. Leaving us with no debts other than the mortgage and the debt to the government - and I'd rather have an interest-free loan paid back at $500 a year than an interest-bearing one paid back at almost that per month, even if the interest free one will take much longer to pay back!Maybe that's just me, though... but yep, we are VERY pleased with that part of the housing bill!
Message Edited by UpUpUp on 09-10-2008 06:12 PM
Yeah, I think you're definitely right there, as a lot of the reporting I've seen on the subject has failed to mention that you have to pay the money back - and it's not as though everyone's going to research into these things as obsessively as some of us! And for people who rely on their tax refund each year just to scrape by, or who end up owing money rather than getting a refund and will now find themselves owing more... yeah, that would be a disaster waiting to happen. I think even if it had been 'free' money my instinct would have been entirely to pay off what we owe and then enjoy the freedom of having more money each month - but knowing that it's something we have to pay back, there is no WAY I'd have wanted to blow it on buying new things if it was just going to result in us being in exactly the same financial situation and then having to give it back bit by bit. No thanks!
So yep, I AM very very much looking forward to it, but because I think it will be a really good thing for us... but it is being marketed weirdly, you're right, and I agree with you totally about it maybe not being the amazing idea it's cracked up to be in some cases. Was talking about that with my husband after we first found out about it, and I can't tell you how glad I was when I said 'we should pay the car off' and he agreed - I'd been dreading him saying 'right, we're buying a couch, and decorating the bedrooms, and blah blah blah blah blah'!! I'm on a mission to get us out of debt as far as is possible (ie a mortgage is fairly unavoidable unless you're rolling in cash!), and that is going to help us do it! That's why I'm so delighted with the whole thing. 
UpUpUp wrote:I can totally see your perspective and honestly, it sounds like a great plan. I just see this being a bad thing for some that are not as fiscally responsible as you are. I also think it should be marketed to the public as an interest free LOAN and not anything else. Because that's really what it is.
fevmlo wrote:I personally cannot WAIT to get our tax credit, interest-free loan or not. We'll be using it to pay off the remainder of our car loan, instantly making us $430 a month better off. Sure, it's not going to put more people in houses who absolutely, positively cannot afford to buy one - but it would hardly be a good idea if it did, would it...? But as first-time buyers without an existing property to sell have more of a chance (all things considered) of buying anything right now, it might be a deciding factor for anyone who's almost convinced they want to buy but wavering a bit. Even if it just means they can pay off the remainder of an existing loan, credit card or whatever, after they buy the house - or if they're lucky enough not to have any existing debts, put it towards decorating and furnishing the place, or stick it in savings in case they suddenly find themselves needing a new furnace... yeah, I think it's a pretty good thing. We'd already closed on our house and been living in it for about six weeks by the time this bill was announced, but I have to say I was delighted when I realised we'd qualify for that money. By January, our one remaining credit card balance will be gone, and then we'll just about be able to pay off the car with what we get from the tax credit plus the refund we'd have had anyway. Leaving us with no debts other than the mortgage and the debt to the government - and I'd rather have an interest-free loan paid back at $500 a year than an interest-bearing one paid back at almost that per month, even if the interest free one will take much longer to pay back!Maybe that's just me, though... but yep, we are VERY pleased with that part of the housing bill!
Message Edited by UpUpUp on 09-10-2008 06:12 PM
I'm glad to see that this thread has brought a 50/50 response in people's views. My view is 100% positive, I'm left handed so my thinking can be different sometimes I believe that today's 1st time homebuyers are very educated & prepared for their 1st home. Even if you chose not to be inform, most lenders today require you to take a Homebuyers classes if you're putting less than 20% down, secondly just look at the forums here.............you guys need to give yourselves a pat on the back on your education & awareness. I consider us the NEW 1st Time Homebuyers Generation; back then the 1st time homebuyers from the market CRAZED past were uneducated & rushed into something that they were not prepared for. Now with that said you have to ask yourself. Would I go to Jennifer Convertibles & purchase furniture for my new home because they are offering zero down, zero payments & zero interest until 2015? OF course you would...because you know as well as I do that as long as you pay it off in full before the end of the term......it didn't cost you any extra money........... Now that's the way I see the Tax Credit, if IRS is giving/loaning $7500.00 to be paid back in 10-15 years and it still cost $7500.00 why not take it. Go to your local bank and see how much a personal loan will run you at today's rates on a 5 year loan. That same $7500 will probably cost about $8500-9000. OR beter yet how about you borrow that $7500. from you retirement or 401(k) account and pay that back plus interest for 5 years... AM I MISSING SOMETHING HERE??? Or how about you ask someone you know that already purchased their first home if they did 110% financing so that they could do repairs on the home... That extra 10% is probably hurting them (1) they have to pay it back for 360 months (2) with the current housing slump they owe more money than the house is worth.....My suggestion, if you qualify for it...take it........and use it wisely.........GOOD LUCK
I believe that today's 1st time homebuyers are very educated & prepared for their 1st home. Even if you chose not to be inform, most lenders today require you to take a Homebuyers classes if you're putting less than 20% down, secondly just look at the forums here.............you guys need to give yourselves a pat on the back on your education & awareness. I consider us the NEW 1st Time Homebuyers Generation; back then the 1st time homebuyers from the market CRAZED past were uneducated & rushed into something that they were not prepared for. Now with that said you have to ask yourself. Would I go to Jennifer Convertibles & purchase furniture for my new home because they are offering zero down, zero payments & zero interest until 2015? OF course you would...because you know as well as I do that as long as you pay it off in full before the end of the term......it didn't cost you any extra money........... Now that's the way I see the Tax Credit, if IRS is giving/loaning $7500.00 to be paid back in 10-15 years and it still cost $7500.00 why not take it. Go to your local bank and see how much a personal loan will run you at today's rates on a 5 year loan. That same $7500 will probably cost about $8500-9000. OR beter yet how about you borrow that $7500. from you retirement or 401(k) account and pay that back plus interest for 5 years... AM I MISSING SOMETHING HERE??? Or how about you ask someone you know that already purchased their first home if they did 110% financing so that they could do repairs on the home... That extra 10% is probably hurting them (1) they have to pay it back for 360 months (2) with the current housing slump they owe more money than the house is worth.....My suggestion, if you qualify for it...take it........and use it wisely.........GOOD LUCK