Comments on: Proposed $15,000 Home Buyer Tax Credit Misses the Point

By: Mark Knowles

Mark Knowles — Thu, 12 Feb 2009 15:35:27 +0000

That is what inflation is for – A few years hyperinflation and 4 trillion will be peanuts

Imagine a cup of coffee now costs $60 – Who cares about a few trillion here or there?

By: pgrundy

pgrundy — Thu, 12 Feb 2009 10:46:56 +0000

I think you have the right idea about burying gold in your backyard. Things are getting just plain scary. I’d feel better about the stimulus plan even with all the cuts if Geithner hadn’t come out the next day to suggest we throw up to two trillion at the bank. Math obviously isn’t my strong suit, but even I can count that puts us about 4 trillion in the hole. I don’t think we can pay that off before the planet decomposes. Scary.

By: jmmcpa1

jmmcpa1 — Thu, 12 Feb 2009 05:28:30 +0000

I believe what the author was saying was that it would take an income of $82,000 to generate enough tax to claim the entire $15,000 credit (if $150k home or higher was bought). The author was not saying that you need income of $82k to qualify for a $150k house. I qualified for a $170k mortgage with far less than $82k income.

Depending on how many children a single mom making $30 – 40K has, she might not owe a dime in tax when the standard deduction, personal exemptions, dependent care credit and child tax credit are all taken into consideration. Therefore, if this credit were a non-refundable credit, the single mom would be SOL (but she would still have qualified for the house).

I would think, however, that the credit would be a refundable credit (i.e. if one’s liability was $0, they would still get the credit), or else the credit would only benefit the upper middle class.

Unfortunately, I think we won’t get to find out about the credit because it looks like it made it to the chopping block when the bill went back to Congress.

I was so hoping for my $15k so that I could buy gold and bury it in the back yard for when the dollar goes haywire from this spending.

By: pgrundy

pgrundy — Wed, 11 Feb 2009 10:57:18 +0000

Thanks for saying so. I got my info at the NYT and it is totally possible I did not understand it. Since I’m not a realtor–I don’t make my living selling real estate– I was more struck by the fact that the measure doesn’t address the underlying problem, which is the falling value of homes and the many foreclosures.

Also, I would stick to my original point even with what you say here. A single mom who can qualify for a mortgage buy a $100K house, even if she needs the help of the tax credit, is first of all not part of the group of the people who need help the most. Secondly, I have to question the wisdom of helping a single mom who makes $30-$40K get into a $100K house. I used to be a single Mom and I did make $30-$40K and I would not have been able to afford a payment like that if even one single thing had gone wrong in my life–and lots of things go wrong in everyone’s life. I was able to by a home, but it was nothing approaching $100K, and if a realtor had tried to show my a house in that price range I’d have said no, that’s too much.

I’m glad you are selling homes though and I appreciate you sharing your views here.

By: Dan

Dan — Wed, 11 Feb 2009 00:03:32 +0000

You are dead wrong on your assesment. First of all the Tax credit is 10% of the purchase price up to $15,000 So anyone who buys a primary residence will benefit from the tax credit. Also a $150,000 house purchased at todays 30 year fixed rates would be a PI payment of around $800 which does not require a $90K plus income to qualify for. Next time you post you may actually want to think about the validity of the statements you are making first. A person buying $100K house will get a $10K tax credit. At current interest rates most people will have a payment similar if not less than what they are paying for rent on an identical property. Especially if they are buying up an REO property at a deep discount. I am showing $100K houses to single moms who make an income in the 30 -40K range and they do qualify for the loans and yes the $10K tax credit will really come in handy for them!