Saturday, October 18, 2008

Uncle Sam's interest-free, 15 year, $7,500 loan to home buyers!

This morning, as I was reading my mildly irritatingly pink GTU (breast cancer awareness), I started to toss the real estate section, unread, as I usually do. Then, I thought, no, there might be something useful to me, a new home buyer, in there after all. Talk about felicitous serendipity! There is an article on page five of the real estate section with the cut line "Tax credit aids first-time home buyers." If you have bought a home on or after April 8th of this year or plan on buying one before July 1, 2009, you need to either retrieve this section from your trash or rush out and buy today's GTU! I would have published a link, had I been able to find it online, but no such luck. I'll use my situation as an example. I will close on December 1. When I file my tax return for 2008, even though I had no earned income this year (I still have to file because I have a domestic worker I have to pay social security for), I will receive a $7,500 check from Uncle Sam. It is actually a loan designed to spur the housing market. I will have to repay it, with my future returns, over 15 years, beginning in 2010, at $500.00 per year. There is NO INTEREST on this loan! If I croak before 15 years, the balance of the debt is forgiven! (That is true if you are single. If you are married and die, your surviving spouse is responsible for the balance of the loan). By the way, technically, the amount of the interest free loan is 10% of the purchase price of the home or $7,500, which ever is greater. The fine print: For all intents and purposes, this applies only to first time home buyers. It states that you are not eligible if "You owned another main home at any time during the three years prior to the date of purchase." Moreover, you may be ineligible because of an income restriction. To wit: if "Your income exceeds the phase out range. This means joint filers with MAGI (? Adjusted Gross Income)0f $170,000 and above and others with MAGI of $95,000 and above." Between my lawn sprinkler system, fence, water filter and water softener, garage door opener, new refrigerator, and new washer and dryer, that $7,500 is more than spoken for, but much appreciated, nonetheless. Between this and the prospect of the restoration of the availability of mortgages, I'm sure Realtor's and builders are grinning from ear-to-ear - or soon will be.


Anonymous said...

to me in my opion thats welfare,taking something thats not yours and much more i think about it.

Jay Moreno said...

Okay, now, calm down. Try to clear your head of your highly likely pre-existing, ad hominem disdain for me and let's look at it rationally.

I became self supporting at age 17 and worked continuously until I became totally and permannently disabled at age 56. I damned surely paid way more than $4,083.31in taxes over those years. I damned surely paid my Social Security disability insurance premimiums. I damned surely could have been paid more in wages had my employere not been required to pay for the Workers' Comp insurance which covered the expenses of my disability.

Now, perhaps you did not notice that it is an interest-free LOAN. I have every intention of living the fifteen years it will take to pay it back at $500.00 per year.
The government will recover their full principle. The actual economic benefit to me is approximately $4,083. That is the interest I would have had to pay on a $7,500, 15 year loan at at 6%

But what was the benefit to the economy as a whole - the real intended beneficiary of the program?

Well, let's see. That $7,500 will pay for most (but not all) of the following extra purchases incident to the purchase of my new home (which, by the way, is being purchased for cash from my Workers' Comp settlement and pumping another $187,00 into the Local economy, with a LOCAL builder - some of which may well find it's way into your pocket directly - but certainly into local tax coffers):

New refrigerator from LOCAL Lowe's.
New washer and dryer from LOCAL Lowe's.
New blinds (installed) from local Lowe's.
New whole house water filtration system from LOCAL Lowe's.
New salt-free water softener from Internet, BUT, all of the water filters and softeners will be installed by LOCAL plumbers.
New in ground sprinkler system installed by a LOCAL contractor.
New 206 foot, cypress, shadow box fence installed by a LOCAL contractor.
New motion sensor floodlights so I can see getting in and out of my van at night, purchased from LOCAL Lowe's; to be installed by LOCAL electrician.

Now,think about the local money made from that $7,500 and the resulting local taxes paid, not to mention the resulting down stream earned incomes from goods and services bought with the local profits from the expenditure of that $7,500 dollars.

My guess is that if you were to query all of the beneficiaries of that $7,500, they might have a somewhat different opinion of the matter than yours.

But, then, again, there may be a few more purists out there who would have preferred another Great Depression to a federal stimulus package.

By the way, thank you for sending back your stimulus check a while back to help make my $7,500 loan possible. You did, didn't you?

Anonymous said...

oh ,im sorry jay did not mean to single you out but i have a person works for me her and her husband last year paid a total of 1430.00
in state and federal taxes. then turn around get 7200.00 back in federal alone. please tell me where that is fair.
2- i did not hhave to return any check i was not offered one.
2- i was not oun my own at 17 but at 18 and been paying uncle sam every year sense i was 12 in a tobacco field in the summers.
but honest was not meant to you, but do you think the loan is intrest free the usa is broke.nothing is free but welfare and taxpayers are stuck with that bill..

Anonymous said...

im sorry but on your next to last paragraph if 7500.00 will keep camden county out of a great depression. thats 450.00 tax dollars if all is spent here.
congress just passed 700 billion
and i still lost money the next week

Jay Moreno said...

It's not just the taxes on the $7,500. How about all of the net profit to the folks who provided the products ans services I spent that money on lacally. Will they not in turn spend that money -and the majority of it locally?

Now, on the national level, multiply that times the MILLIONS of first time home buyers who will take advantage of this. Trust me _ Realtors will spread the word on this program in a big way.

I haven't lost a dime. Never has not having a pot to piss in felt so good!

Anonymous said...

i never said i had anything if everyone in camden county spent 7500.00 today the goverment of here would spend it yesterday.but why do you think its fair to punish us that try to save up for a pot to piss in. i think the new tax rate going to be in next year ill have to work longer days and less days off but fire 2 of the 3 that work for me part-time. where is that tax money going to help?

Anonymous said...

I must agree with you. This is a great opportunity to all who are eligible. It is not a hand out, unlike what most democrats would prefer. It is a way to help those who have worked, paid in and will continue to pay in. I think if enough tax paying citizens who are eligible for this used it properly it would greatly effect our local economy in a positive manor. You go ahead and use it and pay back this money with pride!

Jay Moreno said...

thank you! I habve every intention of doing just that. It's not like I qualified for the stimulus package by having Habitat for Humanity build me a house. I did have to cough up $187,000 of my settlement money that I have tgo try to live on for the rest of my life. None of the folks who avail themselves of this $7,500 stimulus can use it for a downpayment. They have to come up with either cash or a mortgage, which implies that unless they are bank robbers or drug dealers, they most likely work or have worked and paid plenty of taxes.

I can't quite understand why some are so up in arms about this, unless they are, truth be known, pissed that they don't qualify for it, or just can't pass up any opportunity to act out their deranged hatred of me. personally.