Homebuyer Tax Credit

[Luzon]

I have two corrections to make regarding this post.

1. The tax credit will need to be repaid only if your house, that you claimed the credit on, ceases to be your primary residence. If, for example, you decided to buy a second home as an investment property then later decided to move into the 2nd home and turn your original home into the investment, you would then owe the credit back.

2. For the $6500 credit available to current homeowners, I don't think I said that you'd have to sell the original home but if I did, I was incorrect. There is no requirement to sell your existing house. To receive the credit the new home would have to be used as your primary residence.

Sorry gang. Hope this is now clear.

[GMAN]

I thought that the tax rebate was for first time home buyers. I didn't think that you could get the rebate if you already owned a home.

[Luzon]

I thought that the tax rebate was for first time home buyers. I didn't think that you could get the rebate if you already owned a home.

Sure can - If you're buying a new house and moving to it as your primary residence you can get a credit of up to $6500. The key is that you have to have lived in the current house for 5 consecutive years out of the last 8 years.

[GMAN]

There are always strings attached.

[Roadhog]

I don't know....

I think I'm going to hold off until April 1st., when Democrats pass an extention of this, and up the limit to $14,000, with greatly relaxed restrictions.

You just know they are going to have to do this, and a dozen other cash incentive programs, before mid-term elections.

[jonp]

What got the market in such a state in the first place, Democrats like Chris Dodd and Barney Frank aside, is people treating a house like an investment not a place to live.

If you are in the market to buy a home buy the damn thing and don't pay attention to whether it will go up or down in value.

[Ridge Runner]

What got the market in such a state in the first place, Democrats like Chris Dodd and Barney Frank aside, is people treating a house like an investment not a place to live.

If you are in the market to buy a home buy the damn thing and don't pay attention to whether it will go up or down in value.

You want to think about what you just said and get back to us?

I wish I could put my finger on the exact figures but the great majority of people will buy and sell their homes x number of times during their life time. Even as little as three years ago I would have NEVER thought about selling my home. After 16 years I sold it last year in October. Let me tell you, I'm VERY glad I did my homework BEFORE I bought. I shutter to think about what my position would be like right now had I not done so.

I was about to get on a rant here but I will save it for some other time. I do want to leave you with this tho: With a few exceptions, when you look at buying a home you better think "long term" or you might just wind up living in "the poor house".

[golfhobo]

Ridge Runner said:

You want to think about what you just said and get back to us?

Relax, Ridge.... I'll do the thinking for you.

Jonp said: "If you are in the market to buy a home buy the damn thing and don't pay attention to whether it will go up or down in value."

YOU said: "when you look at buying a home you better think "long term" or you might just wind up living in the poor house."

I bellieve you are both saying the same thing. Jonp is decrying the fact that real estate "speculation" (looking for a quick profit,) is what brought down the market.... and MANY investors. You are BOTH saying not to look at short term profits, but to buy for the long term. Buy it for a long term investment, and a place to live, and don't worry about short term fluctuations in market prices.

You also said:

I wish I could put my finger on the exact figures but the great majority of people will buy and sell their homes x number of times during their life time.

I believe the number is (or USED to be) about THREE times. And with proper planning and analysis, they hope to realize a profit each time. But, it doesn't always work out that way.... nor, does it NEED to.

Having a home to live in does not necessarily have to be a free ride, profit maker, or zero sum game. It costs money to live. In fact, if someone sells a home for a profit after 16-20 years, most likely they are only recouping expenses of maintenance, taxes, improvements, etc.

Even as little as three years ago I would have NEVER thought about selling my home. After 16 years I sold it last year in October. Let me tell you, I'm VERY glad I did my homework BEFORE I bought. I shutter to think about what my position would be like right now had I not done so.

Not sure I understand your postition here. Wasn't last October a DOWN period for the housing market? Or was that just before the big slide? Anyway.... why did you sell? Not planning on staying in it for the long term? 16 years SEEMS like a long term plan.

Let me throw some numbers and a scenario at you. 20 years ago, when I came back to NC, I rented an apartment at about $275/mo. Don't know what interest rates were at the time, but I probably could have gotten a 30 year mortgage for a small house for about the same monthly payment. 20 years later, I've blown $60k in rent, could have PAID for a house of the same value, and have absolutely NOTHING to show for my money.

Now, let's assume I was in a postion at the time to BUY a house. Maybe even an $80k house at the time. (in this area, back then, that would have been a nice house.) Let's assume that after 20 years of my 30 year mortgage, (payments about the same as my rent,) I lost my job and had to sell cheap and could only get $30k for the house. After 20 years of TAX writeoffs....I would have lost $50k on the house. $10k LESS than I have thrown away in RENT for the last 20 years!

But, let's say I only sold it for $20k less than I paid for it. Sold it for $60k, paid off the remaining balance, and have a mere $10-20k profit for my troubles. How far ahead does that put me compared to throwing away $60k in rent for someone ELSE'S dwelling?

I was about to get on a rant here but I will save it for some other time.

Not sure where a "rant" was needed nor enticed, but.... I'd like to know what else you wanted to say. I have alot to learn about all of this, and you are one who I trust.

Anyway.... I hope we can keep THIS thread "on topic." There's no real need to politicize this. There are NEWBIE drivers out there selling homes, or giving up apartments, and living in trucks! There are others of us who need advice about HOW to buy, WHEN to buy, and WHAT to buy.

My heartfelt wish at this holiday season is that we ALL have a warm place to dwell, and that bills are paid, and family fed and content. And that somehow..... things will get better for us all in the year(s) to come.

[GMAN]

Even if you pay the same amount of rent as you would in house payments, you are still better off owning or buying rather than renting. If nothing else, you can write off the interest, which can reduce your taxes. Even with no appreciation on your home it still makes more sense to buy. One thing most people don't consider when buying is upkeep. There are things that one needs to do when you own the house which may not be necessary when renting. For instance, you will need to mow the lawn in summer months. That can be a bit challenging if you are on the road. Most houses require a coat of paint, roof or other maintenance projects from time to time. These are additional expenses, but I think that ownership is still better than renting. At least you will have a place that is paid off at some point. If you rent you will always have a monthly payment on property that you will never own. For those who do rent, it can be nice to make a call to the landlord when a pipe bursts or the hot water heater goes out. If you own the place then that is your responsibility. All things considered, I think that owning is preferable to renting. I would prefer that my tax dollars not go to someone else who wants to buy a home. Whether you get a rebate or not buying a home is still a good way to go.

[golfhobo]

That's pretty much what I'm saying GMAN. Even if you take a LOSS when you sell your home, you probably had a NET GAIN! I've thrown $60k down the drain in the last 20 years. That would buy a LOT of paint and hot water heaters!!

[Ridge Runner]

I guess I used the term "long term" in the wrong way here. My point was that to invest that much ( any ) money without thinking ahead is foolish IMHO. Case in point: A contractor friend of mine bought several acres of land and built spec houses on it. They all sold for the low 100's. Fair market value at the time and they sold as fast as he could build.( He sold some of the other lots too, to other contractors that built spec houses also. ) About two years after they were all built and sold the city built its' new waste treatment plant right next door. When I say next door I mean that about 8 to 10 of those houses could throw a rock from their backyard and hit a pond of human waste. All it would have took for those new homeowners to avoid this was about an hour of their time to go to the zoning commission and look at how the property next to their soon to be new home was zoned.

I honestly know a person that spent more time and research in buying his car than he did when he bought a home.

Now for the short "rant" : It's when these folks that don't do their homework loose they want to cry to someone else to make it right. Somehow it is not their fault that they made a bad decision. What really pisses me off is when they then tell me that I'm "lucky". I assure you "luck" had NOTHING to do with it. I put a lot of time, effort and work into what I invested my money in. I "invested" in a site built home ( that I spent time researching ) and a used PU truck. My friend bought a new single wide trailer, put it on a rented lot and bought a NEW PU truck. He bought a NEW "RANGER" bass boat and a portable shed to put it under. I put the down payment on a piece of rental property. He spent his Saturdays on the lake. I spent mine working on my properties.

This has been going on for almost 10 years now. When we get together he never fails to tell me how "lucky" I am to have the things that I have now ( security ) while he has nothing.

OK. I'm done with the rant. To get back on topic: If you are looking at buying a home you BETTER look at it and judge as best as you can if it will gain or lose value. Why in the world would you put money into something if you felt it would go down in value when you could put the same money into something that would at least hold its value?

[Luzon]

Now for the short "rant" : It's when these folks that don't do their homework loose they want to cry to someone else to make it right. Somehow it is not their fault that they made a bad decision. What really pisses me off is when they then tell me that I'm "lucky". I assure you "luck" had NOTHING to do with it. I put a lot of time, effort and work into what I invested my money in. I "invested" in a site built home ( that I spent time researching ) and a used PU truck. My friend bought a new single wide trailer, put it on a rented lot and bought a NEW PU truck. He bought a NEW "RANGER" bass boat and a portable shed to put it under. I put the down payment on a piece of rental property. He spent his Saturdays on the lake. I spent mine working on my properties.

This has been going on for almost 10 years now. When we get together he never fails to tell me how "lucky" I am to have the things that I have now ( security ) while he has nothing.

OK. I'm done with the rant. To get back on topic: If you are looking at buying a home you BETTER look at it and judge as best as you can if it will gain or lose value. Why in the world would you put money into something if you felt it would go down in value when you could put the same money into something that would at least hold its value?

Sorry gang, been away for a couple weeks.

There is so much truth in what Ridge Runner is saying here. When I was in the mortgage biz before, I was totally amazed at the borrowers who represented both ends of the spectrum. Some people seem to be born with the "wisdom" to know what they're going to do in life, how to spend money wisely, etc. while the other side just aimlessly goes through life with no thoughts to the future. Unfortunately, I too often have been on the latter side. But mistakes aren't bad if you learn from them.