voting on the tax credit

[GregB]

In my business I work as a consultant to businesses. I am seeing many employees at those businesses rushing to buy their first house. I have talked to many of those in detail including a long conversation with one of the owners of that business who is a REO and owns an appraisal company. Those people seem to be quite happy paying $20,000 more for a house to get the $8,000 credit.

I'm assuming that these credits are one of the reasons that houses in this area (SoCal) are still overpriced.

It is artificial and pricing is always eventually based upon supply and demand. Create demand or psych people into believing that there is a short supply and prices will go up. This scam has worked for diamonds for 90 years and the public is still falling for it.

[kai_1103]

Yikes thats terrible!  I actually research home values and charted historical average prices in the area I am buying, then only made offers based on the prices lower than what history tells us houses should be worth today.  In other words, I will pay a price that appears to be an overcorrection of the market.  A price so low that it is reasonable to assume prices will not drop below that point.  Like prices from the 90's recession.

Of course, I could be way wrong.  The world could expode.  Aliens could take over.  But you have to live your life.  So I feel I am doing so intelligently with the available information today. 

But who knows.  If everything crashes and burns worse- I will just have to make do.

[happy0510]

My BF and I decided in 2006 we were gonna buy in 2 or 3 years and move in together. Even in 2006 when prices were through the roof we decided on this.  Why? Because we knew we wanted a future together which included a home.  We also knew that we needed a few more years to get the funding, credit, etc.. together in order to make that happen.  Over these past 3 years everything that has occurred in housing market has not changed the fact that we are going to buy.  We were gonna buy in 2006 and we are gonna buy now in 2010 with or without the credit!!!

[Anonymous]

The 8k tax credit is a mistake and even more so that people are allowed to borrow against it. Many of the zero down a zero closing loans are what caused the problem in the first place. IMHO if you cant come up with a down payment then you cant afford a mortgage. If you ask our parents or some older folks what they had to do to buy their first place you'd be very suprised. 

[Anonymous]

We borrowed against the credit to help with closing costs, but we still brought money to the table. It just allowed us to keep some of our own money in the bank when we closed for emergencies, so we didn't have to tap it all out. Our mortgage payment is hardly more than our rent was, so we know we can afford that, but we wanted to have something saved up for unforeseen problems with the house (which indeed arose right after we moved in!).

[Anonymous]

Pardon for being naive but how do you borrow against a credit that you dont have? Didnt realize that you could walk in with no money down and borrow against a credit that you dont have for closing cost to get into a house.

Message Edited by HeelsFan72 on 10-28-2009 07:47 PM

[Anonymous]

bumping for those who are saying they can't find any info on the tax credit.

[MaisCher]

I didn't use this option, but the way it was explained to me, you had to be approved for the mortgage loan so you can't just walk in on day one and say "I'm going to use the credit". It was offered as a loan, and your DTI had to be able to handle the additional monthly payment. You had to agree to file an amended return and repay the loan when you received the credit. I believe they told me I would have 90 days with no interest from the day I closed. 

The thing with the lender I used was that you still had to bring your 3.5% to the table. You could use the credit if you just wanted to put additional money down. My builder paid closing and I have 401K for my down payment, but I don't see anything wrong using it if you meet all the stipulations.

I don't know about anyone else, but I never had anyone really teach me about finances. I make great money and was floored when I really started looking at my finances months ago and realized how much money I had left over at the end of the month and beyond 401K I didn't have a thing in savings. I also didn't realize that the bank wasn't going to just look at my great work history, high income, minimal debts and just hand me the keys to a home. They wanted a hefty amount down and the more...the better.

Had I used the credit for my downpayment it wouldn't be because I couldn't afford the house without it, it would be because I just never counted up the cost of purchasing a home. My mortgage payment will still leave me with 1.8K at the end of the month after all other bills/expenses are paid. Luckily I now have a much better grasp on where my "extra" money will be going. lol

[Charlington]

Senate Unveils Compromise Deal On Housing Tax Credit

Published: Thursday, 29 Oct 2009

http://www.cnbc.com/id/33536082

[Anonymous]

Wonder how the "existing home owners" part will pan out..