Thursday, June 10, 2010

Home Tax Credit Extension

According to the Associated Press, homebuyers may get an extra three months to finish qualifying for federal tax incentives that boosted home sales this spring.

Senate Majority Leader Harry Reid, D-Nev., is proposing today that he wants to give buyers until Sept. 30 to complete their purchases and qualify for tax credits of up to $8,000. Under the current terms, buyers had until April 30 to get a signed sales contract and until June 30 to complete the sale.

The proposal would only allow people who already have signed contracts to finish at the later date. This is an amendment to a bill that would extend jobless benefits through the end of November.

The National Association of Realtors is said to have been pushing hard in Congress for the extension. Mortgage lenders are reported to have been swamped with borrowers trying to get approved by the end of the month. Many potential borrowers are unlikely to make the deadline.

For those folks who can make the deadline, they are eligible for a tax credit of up to $8,000 if they are buying their first home for the first time. Current owners who bought and moved into another home could qualify for a credit of up to $6,500.

I just don't get it, what difference is $8,000 going to make when an average decent house in a good neighbourhood with good schools are $600K - 800K plus in Los Angeles.

For people who are relying on a zero percent down FHA loan to buy into a crappy house somewhere in Carson, or a bad street in Van Nuys for $300-400K, $8000 tax credit isn't going to make their monthly payment any more affordable to them in 30 years....

All this nonsense tax credit does is just to drive ignorant people (particularly the ones who are really bad in math, and one who doesn't have solid job skills to secured their paychecks...) to frock out to bid up real estates again...

There have been too many idiots out there bidding on homes they can't actually afford because of their misconception about this tax credit, then there are people who actually have the bucks and the loans to buy a home but have to bid a higher price to outbid all these tax credit stimulated idiots out there to actually buy their first homes. I hope all these losers fall out of escrow when reality reckons and banks deny financing due to their low monthly income versus monthly housing expenses.... Or the banks will not care as long as FHA gives an OK to guarantee the use of taxpayers money to repay to the banks when these losers default? This is just a whole new bubble and bidding war created by our tax dollars. Thank you, Uncle Sam!!

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