topic Re: voting on the tax credit in Mortgage Loans

voting on the tax credit

Anonymous — Tue, 27 Oct 2009 14:47:00 GMT

Just saw on CNBC that the senate could vote on extending the tax credit today. It also said one of the things they are looking at is phasing it out over time to $6000 in April and going down $2000 every 2 months until it ends in 2010. Stay tuned...

Re: voting on the tax credit

Anonymous — Tue, 27 Oct 2009 15:11:10 GMT

The story I herad was on tv- but here is an idea of the timeline I found. http://www.cnbc.com/id/33482504

Re: voting on the tax credit

Anonymous — Tue, 27 Oct 2009 15:18:28 GMT

Too bad it doesn't sound like they are trying to increase it... would be awesome if they voted on and passed an increase a few weeks before I closed.

Re: voting on the tax credit

Anonymous — Tue, 27 Oct 2009 15:33:22 GMT

don't get me wrong i loved the tax credit, and i sure took advantage of it when i bought my house this year, but i'm a little suprised they are extending it. From what i recall home sales have been generally up. People are buying out there. Granted they are probably still not buying a considerable amount of new builds (mostly due to forclosures, short sales, etc.) but they are buying. Any thoughts?

Re: voting on the tax credit

Anonymous — Tue, 27 Oct 2009 15:40:36 GMT

I think the credit pushed a lot of people to buy homes that may have considered waiting. I'd be curious to see if no extension is passed what type of effect there will be on the housing market.

Re: voting on the tax credit

Anonymous — Tue, 27 Oct 2009 15:51:44 GMT

I wonder.... I do know that now that the "Cash for Clunkers" for cars program is over, car sales have gone way down...

Re: voting on the tax credit

hawkeye33 — Tue, 27 Oct 2009 17:17:21 GMT

I'm currently awaiting appraisal to come back (supposed to have a number today), and I can say that if something goes way out of whack and I can't get this deal done before 11/30, I will likely walk away if they don't extend the credit.

Maybe what they should do is, rather than extending it entirely through 2010 even with a phase out, put a provision in that says if you sign a contract before 12/31/09 AND if you close within x months of the signed contract, you get the credit.

Re: voting on the tax credit

Anonymous — Tue, 27 Oct 2009 21:01:53 GMT

The tax credit did help home sales but only on one level, the majority of home sales of course went to first time buyers. However, this credit did not help those who wanted to move up to bigger or more expensive house. Also a great number of the sales were for forclosures or short sales, but the average home seller had a difficult time selling their homes and therefore couldnt move up. The housing market will only truely rebound when that section of the homebuying population has finds a way to purchase homes as well. Think of it this way, all the crap of the housin collapse trickled down, but the credit didnt trickle up. There was talk that if extended the credit would also include those people and therefore spur the market to recovery, that was the original purpose of possibly increaseing the amount of the credit

Re: voting on the tax credit

Anonymous — Tue, 27 Oct 2009 23:36:49 GMT

Here is some new info on the tax credit:

Democrats Agree to Extend Home-Buyer Tax Credit: Dodd

http://www.cnbc.com/id/33493223

Re: voting on the tax credit

DallasLoanGuy — Tue, 27 Oct 2009 23:46:42 GMT

@Anonymous wrote:
I wonder.... I do know that now that the "Cash for Clunkers" for cars program is over, car sales have gone way down...

We are canibalizing future buyers today.

It is a short term fix and NOT the answer.

The car business did it to themselves with employee pricing. Was a disaster

Re: voting on the tax credit

Anonymous — Wed, 28 Oct 2009 01:25:51 GMT

@DallasLoanGuy wrote:
We are canibalizing future buyers today.
It is a short term fix and NOT the answer.

(Disclaimer: I received the $8,000 tax credit, but began the home-buying process while it was still a $7,500, interest-free loan. I got the benefit of luck, not good planning.)

I agree. Additionally, when everyone expects a 'credit' or 'break' of some kind in order to solicit his interest today, we keep driving away folks who might otherwise be in the market by prompting them to wait for the 'next best opportunity'. As for sellers, I believe the longer the tax credit is available, the more likely it is that it will simply be priced into the contracts. In other words, if I'm selling to you and you're getting $8,000, you can afford to pay $8,000 more -- or, at least, not ask me to pay closing costs.

Message Edited by oldhack62 on 10-27-2009 06:25 PM

Re: voting on the tax credit

Jazzzy — Wed, 28 Oct 2009 01:51:20 GMT

@Anonymous wrote:
@DallasLoanGuy wrote:
We are canibalizing future buyers today.
It is a short term fix and NOT the answer.
(Disclaimer: I received the $8,000 tax credit, but began the home-buying process while it was still a $7,500, interest-free loan. I got the benefit of luck, not good planning.)
I agree. Additionally, when everyone expects a 'credit' or 'break' of some kind in order to solicit his interest today, we keep driving away folks who might otherwise be in the market by prompting them to wait for the 'next best opportunity'. As for sellers, I believe the longer the tax credit is available, the more likely it is that it will simply be priced into the contracts. In other words, if I'm selling to you and you're getting $8,000, you can afford to pay $8,000 more -- or, at least, not ask me to pay closing costs.

BINGO.

I truly believe it is the sellers who have benefited from the tax credits with increased selling prices.

Re: voting on the tax credit

Anonymous — Wed, 28 Oct 2009 14:22:50 GMT

Here is the latest- http://www.cnbc.com/id/33506105

Re: voting on the tax credit

Watchmann — Wed, 28 Oct 2009 15:00:12 GMT

The home buyer credit and cash for clunkers have now planted the seed that if consumers hold off long enough the Government will come in with incentives to buy. Short term it 'may' have helped but it has ominous consequences for the long term. We should have let GM and Chrysler go belly up and let home prices drop to their natural value. That would have cleared the system and set a floor for a recover. Instead we are propping up prices and artificially stimulating demand. It will all end badly.

Re: voting on the tax credit

Anonymous — Wed, 28 Oct 2009 15:39:17 GMT

I can't speak for anyone else, but as much as I'm looking forward to getting my $8000 check, the credit had ABSOLUTELY NOTHING to do with my decision to buy. I didn't even know about it when I first got preapproved (back when it was still $7500).

Re: voting on the tax credit

angie204 — Wed, 28 Oct 2009 15:56:05 GMT

The tax credit didn't convince us to buy, just to buy sooner.

I have been going to college and paying cash for it. Our plan was for me to finish college in the next 12 months and buy a house after that. However, when we realized there was a tax credit, we decided to buy this year and go to school next...use the $8k for student expenses.

So technically our purchase would have been made anyway.

Re: voting on the tax credit

kai_1103 — Wed, 28 Oct 2009 16:02:36 GMT

For me, the 8000 motivated me to see if I could get a loan. Once I found that my credit was so good (I knew what it was but didn't realize I was within current standards) and there were downpayment assistance programs, I was pretty excited. Being a finance major, I ran the numbers and found a comfortable payment (using about 1/2 the budget I could use) and began looking. Now I may miss the credit if it isn't extended but I really don't care. Sure I would love the cash! But it is not a deal breaker. It was just motivation to take the plunge, and since I am a few months from graduating it only made sense (and cents!). My payment will only be slightly more than my rent and I've budgeted my "monthly payment" to actually be the payment plus payment into an emergency fund/repair fund.

Anyway- that's my two cents- perhaps it motivated creditworthy consumers.

Re: voting on the tax credit

XAVIERSMAMA — Wed, 28 Oct 2009 16:25:34 GMT

I think people keep missing the point of the tax credit. The reason why it was targeted to first time homebuyers was because they were more likely to go out and spend the $ on furniture, appliances, paint etc. to help stimulate the economy and they were more likely to buy the foreclosures and help stop the market from becoming flooded thus driving down the prices of all homes. It was never really meant to trickle up to step up buyers. In my opinion they never should have let people borrow against the credit for the down payment which also helps defeat the original purpose. I'm hoping to purchase in the next month or so, so I would love it if they extend it, I'm just not sure how extending it to all buyers will help the market. If you are stuck in your house because your underwater, how is the credit going to help you? Also, what's to stop people from buying a 2nd home that may be cheaper than their first home and then purposefully going into foreclosure on their 1st? This is already happening without a tax credit incentive so I can only imagine how many more would do that with the incentive. Just my 2 cents

Re: voting on the tax credit

kai_1103 — Wed, 28 Oct 2009 16:32:13 GMT

You make great points! As someone who isn't underwater or in any kind of trouble - I wish they would help people that are. Even if not a drastic help- but something. Maybe some kind of tax credit (not cash in hand though). Give them the monthly payment and they will still need money next month- so that doesn't help really. Maybe step up modification efforts maybe. We all know they aren't helping people. I have a couple friends that are bad off and can't get help. They will have to stop paying soon. Its a bummer.

Re: voting on the tax credit

Anonymous — Wed, 28 Oct 2009 16:35:32 GMT

Initially, very low interest rates and affordable home prices where the main factors that enticed me to seriously think about buying. The $8000 tax credit and an upcoming lease expiration were the things that made me really buckle down and apply for a mortgage now, as oppose to renting for another year and saving, as I had planned.

As long as interest rates and home prices stay low, qualified buyers will still buy with or without the tax credit, IMO. However, I do think that phasing it out is a good idea, instead of abruptly ending it.