Restrict Home Ownership to Only Those who can Afford it
So, with the worst housing crises in memory, do you think the government got the message? Below is a news item from June 2010 that answers this question:
Democrats Vote Down 5 Percent Rule … In a bid to stem taxpayer losses for bad loans guaranteed by federal housing agencies Fanny Mae and Freddy Mac, Senator Bob Corker (R-Tenn) proposed that borrowers be required to make a 5% down payment in order to qualify. His proposal was rejected 57-42 on a party-line vote because, as Senator Chris Dodd (D-Conn) explained, “passage of such a requirement would restrict home ownership to only those who can afford it.”
President Obama – No Friend to Home Ownership
President Obama
To pay for the huge budget deficits currently being racked up by the Obama administration, taxes will be forced up and new revenue sources sought out. Right now, Obama’s current budget will reduce the home mortgage interest deductions. Of course, these ideas start with the higher earners, but rest assured, once the door is open, the earning caps will be reduced until finally eliminated!
Do you think I’m stretching the truth on this topic? The idea that elimination of the home mortgage deduction will not affect homeownership is already being actively discussed. The proponents bring up the fact that Canada, the United Kingdom and Australia all have roughly similar home ownership rates as the United States, but none provide mortgage interest tax deductions.. Plus, what a great way to further Obama’s stated goal of wealth re-distribution.
In part, here is what the Obama budget says: “The Administration’s Budget includes a proposal to limit the tax rate at which high-income taxpayers can take itemized deductions to 28 percent — and the initial reserve fund would be funded in part through this provision. This provision would raise $318 billion over 10 years.”
With the Administration’s stated intent to use any perceived crisis to push through legislation that otherwise would be political suicide, here is some of the current rhetoric surrounding home ownership:
A. Slash deductions for homeowner mortgage interest from the present $1.1 million limit to $500,000, phased in with $100,000 annual reductions starting in 2013, and extending to 2019. Under current law, taxpayers can write off mortgage interest on their principal home debt up to $100,000.
B. The maximum mortgage debt amount would shrink yearly until it hit $500,000. Over a 10-year period, this change alone would boost federal tax collections by an estimated $41 billion.
C. Replace the current mortgage interest deduction with a flat 15 percent tax credit for everyone with mortgage amounts below the declining limits in the first (A) option above. Rather than taking write-offs that are tied to your personal income tax bracket, every homeowner would get a credit worth 15 percent of mortgage interest paid.
Besides raising $13 billion in 2013, it is estimates that moving to a credit approach would increase revenue by nearly $390 billion between 2013 and 2019.
So, real estate professionals who voted for Obama, is this the “hope and change” you expected?
Home Renting vs. Home Owning
Amid rising foreclosures and a tough housing market, renting is getting more positive attention. According to a survey by Harris Interactive, 65 percent of homeowners surveyed said they look more favorably upon renting than owning, given the current state of the residential real estate market.
Among the advantages of renting, homeowners cited no susceptibility to foreclosure (25 percent), minimal impact from the erratic real estate market (23 percent) and no effect from fluctuating interest rates (23 percent). Only 54 percent said they would concern about the inability to build equity. The survey also found that home owners who have lost their homes to foreclosure are finding it difficult to qualify as credit-worthy renters.
Property Management Blog is your expert insight into property … – Renting has its benefits, however, and some people actually prefer renting to owning for the ease and flexibility of it. There is quite a bit less financial obligation in regards to renting, as the person living in the home is not …
A Home in the City: Renting vs. Owning (part 1 of 2) – Renting vs. Owning (part 1 of 2). As renters, we've heard our share of "you're throwing away your money each year!" or "You pay how much? That's our mortgage!" We've been watching sales listings for years, but it hasn't been in the …
U.S. Census measures renting vs. owning – U.S. Census measures renting vs. owning. Renters pay a larger share of their income for housing than do home owners, according to the latest survey from the U.S. Census Bureau. Does that mean we all should buy a home? Not so fast. …