The State of Florida has started a program that will give first time buyers $8000 up front to use as a down payment on their new home. The buyer has 18 months to pay the money back to the state from their federal tax returns.
Yeah, but they have not figured out how to fund it yet. Another stupid idea with no thought behind it.
I just love government stupidity. The bucket has got a hundred and fifty holes in it, leaking like a sieve so their answer is to put a few new holes in it. I wonder how many people actually get 8,000 dollars back in federal income tax returns?
I never really understood why the government offers this stuff only to “first-time buyers.” This economy will require people to move more often in the future. Young people today will end up with a dozen different careers before they retire. In general, owning a home disincentivizes younger people from moving, and therefore advancing.
It is as dumb as offering $8,000 to any young person who will agree to limit themselves to only those opportunities within a 50 mile radius.
This program has been in effect since last year. They just increased it to $8000 this year and depending on when you purchase your home you may not have to pay back any on the money.
Nick you stand with a couple of good points related to young buyers limiting themselves. Also take note that under the provisions of this package that a first time home buyer is anyone purchasing a primary residence whom has not done so in the last 3 years.
A first time homebuyer by these standards can be almost anyone.
I wised up 10 years ago and will never own a home again as long as I live. I don’t own because I don’t like throwing money down the drain.%between%
I’ll be happy to prove to anyone who is interested that buying a home is throwing money down the drain and renting a home is financially wise… but back to our $8K incentive to buy…
What the state doesn’t understand is that there is a strong correlation between home ownership and unemployment. Their program increases unemployment.
Maybe they do understand it…they (liberals) want more and more people to rely on them…obviously the majority who voted for the present administration wanted more social programs enacted.
The story I heard yesterday said that the state would have funds available by August 2009. If nothing else it will allow more people who can’t afford a house to buy one.
Are you saying that it increases unemployment since people are stuck where they are at if they own a home?
Interesting concept Nick. Ever read Rich Dad, Poor Dad? I have heard this argument before (similar anyway) He places his house in the Liability category, against common practice, Because it costs him money monthly, and makes him no money. (if/until he sells)
This is nearly a mirror of the fed program - 1st time buyers/$8,000.
Seems the state is simply loaing the money up front and plans to take the $8K fed credit when the new homeowner files his taxes.
They assume that people are not smart enough to consider the $8,000 credit during the course of the year and make adjustments.
I believe this kind of program is exactly how the Real Estate market got into the mess its in. Giving money to people to use as a down payment who otherwise can NOT afford to make the payments. I do not know how many inspections I have done over the years where the Realtors ask me for a discount on my fee because “these people do not have any money”. If not for some kind of Government program they would not be qualified for a loan or down payment. This is insane. Have we not learned anything? It is setting people to fail, ruining any credit they may have, not to mention the condition of the homes they end up leaving because of a default on their loans. They tend to trash the home before they leave it. God save us from the Politicians.
Yes. Furthermore it rewards poor local government. When Philadelphia raised the city wage tax to over 4% and opened an “urban violence” wing of the hospital that handles gunshot wounds all night… I gave away my worldly possessions and drove out west.
Anyway, a lot of the unemployed, especially younger families, are unemployed because they bought a home and can only look for employment around their home. When/if their local economy goes sour, their opportunities dry up and their home value drops. All of a sudden they are trapped.
Ok, I’m interested in your theory.
Unless you are paying cash, you either rent your home or you rent the money to buy your home. I can show you how paying cash is really throwing money down the drain, but for now, let’s just look at renting vs. buying. Let’s say that there are two homes on a street; one for rent and one for sale. And let’s say that you are indifferent about them. Both homes are nice. In either case, you will have to spend money to live in one. If you rent, all of your rent money is spent (down the drain) on living there. If you buy, some of your money goes toward paying down the principle and builds equity, the rest is spent (down the drain). That money includes your closing costs to buy, almost all of your mortgage at first which is mostly interest, all your taxes, all your insurance, all your repairs, and all your closing costs to sell. All of that money, just like rent, might as well have been flushed down the toilet. Now buying seems like it works if you stay in the home a long time and home prices increase in value. I hear people say “My house went up double since I bought it 15 years ago.” This brings us to the question… had you rented instead, and invested all the money you wasted on closing costs and interest and insurance and taxes and repairs… would you have a chunk of change that is more or less than the increase in your homes value or not? Well there is a simple formula to figure it out. Here it is: If the cost of renting per month is less than 1/100th the cost of the selling price of the home… rent. If the cost of renting per month is more than 1/100th the selling price of the home… buy.
Now this formula doesn’t take into consideration those who find pride in home ownership or those who want to own a home because they like working on it or painting their living room purple or whatever. If you are one of those people, then you should throw more money down the drain and buy a home. Everyone is different and I’m not saying that your thinking isn’t right for you. It’s just not right for me. I sleep like a baby knowing that my landlord subsidizes my living expenses, that my would-be closing cost money, interest portion of my mortgage payment, insurance, taxes, and repairs… are all in my pocket, not some real estate agent, bank, insurance company, or contractor’s. I sleep like a baby when I think the septic system might go or termites are hungry or the wind is blowing or the neighbor is an ****hole or the local economy goes sour. Again, I’m not saying my thinking is right for you. All I know is that when I came home one day and told my two teenage boys to give all their crap away in the front lawn and pack the truck because we’re moving to the top of the Rockie Mountains, they had their stuff in the front yard in 30 minutes.