The expansion and extension of home-buying tax credit....Opinions?

By
Real Estate Agent with Prudential California Realty

The new law extends until April 30, 2010.  This is the new deadline for closing escrow for first-time homebuyers to receive a credit worth up to $8,000. The credit was going to expire Nov. 30. It also adds a credit worth up to $6,500 for taxpayers who buy a replacement primary home provided they have lived in their existing home for at least 5 of the past 8 years.

I am not sure that this is a resolution but it sure does give first time home buyer's an incentive to buy.  The only thing is I am seeing a ton of FHA buyers at 3% down purchasing homes under this new option.

Is this really the best idea?  Buying a home is a great idea, but to rush into a purchase because of the tax credit when you have no equity seems like a high risk endeavor.

I feel like this is clearing inventory and puting new homeowners in a high risk situations for the future, especially if they lose thier job etc.

It seems as though the 20% down buyer's are becoming a thing of the past, especially with first time home buyers.

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Topic:
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Location:
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Rainer
11,011
Theresa Redman
Certified Residential Specialist
Lake Side Properties

The tax credit is only extended till April 2010, not June.

November 17, 2009 04:06 PM
Rainer
18,358
James Collins
Prudential California Realty

Thanks for seeing that, I am glad someone is reading this.  Any opinions?

 

November 17, 2009 04:09 PM
Rainmaker
111,122
Jerry Morse
BBA,GRI
The Morse Company

It is a little scary, because at the recent NAR Convention in San Diego, the Head of FHA, told the group and one of our Board members was there, that FHA loans have gone from 3% of the total loans closed to over 80% now.

November 19, 2009 04:46 PM
Rainer
18,358
James Collins
Prudential California Realty

That is a great point.  Why are we not talking about this more.  At what point to we stop looking away at putting people in high risk situations that can do more harm than good.

That is what got us in this market in the first place.  Have we learned anything??

November 20, 2009 03:57 PM
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Rainer
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James Collins

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