How I See the World Today | Jim Rogers

Jim Rogers is one of my favorite investors to listen to. These are a must watch:

Part I: Eric Janszen interviews Elizabeth Warren for The Postcatastrophe...

Housing Happiness

UPDATE: Keep listening to those politicians(esp. the ones that got us here) I am sure they figure something out...so please excuse me while I laugh.

Tax Credit For Home Buyers Expanding from 8K to 15k?

So we have officially started the process of home buying. We meet informally with our agent the other week and talked about what steps we need to take to get the ball rolling. We are currently looking for a home as close to downtown as we can. It needs to be affordable, nice, and most importantly safe. We are looking mostly for town homes because we do not want to deal with the upkeep with a yard. We are not opposed to a house, but it would need to be one we really like. 

We are in no rush as there seems to be a lot of real estate out there right at the moment. Another question we are asking is for the first time home buyers tax credit, is it going to be expanded to 15k? As long as talks like this remain we are going to be taking our time. What is the rush if they extend or even up the ante. We have been saving and waiting for a time when we can afford something and with that tax credit it would just make everything just a bit more affordable.

Also with my fiancé working for the school district and being a state employee, there looks as if there a couple options for us to get really low mortgage rates. We haven't fully explored all these options as we are taking our time.

If you haven't already heard about this, here are some highlights from the USA Today article:

Bernard Baumohl and economist at the EOG says:

"I'm fairly confident that (Congress) will extend the tax credit, because it is so important that housing come back,"

Here are a few proposal on the table:

A Senate bill to expand the tax credit to $15,000 for any home buyer regardless of income was introduced this month by Sen. Johnny Isakson, R-Ga. It is co-sponsored by Senate Banking Committee Chairman Chris Dodd, D-Conn.

Another bill in the House, introduced by Rep. Eddie Bernice Johnson, D-Texas, would extend the credit to all home buyers through 2010.

A House bill to keep the $8,000 credit in place until June 2010 and expand it to all home buyers was introduced last month by Rep. Kenny Marchant, R-Texas. It also would provide a $3,000 credit to homeowners who refinance.

This will keep us moving at a fairly slow pace unless we find something that is A) a steal or B) we fall in love with. Every month that goes buy is more money to put down, even though it would be nice for our rent money to be building some equity.

One thing that stood out to me in the article though is "tax credit to $15,000 for any home buyer regardless of income" - Correct me if I am wrong, but isn't this what caused the housing bubble in the first place? Why are we allowing people to buy houses that cannot afford one? And why is it important for housing to come back so fast? Why can't we allow the markets to correct themselves? Its econ 101(supply and demand)there are more houses for sale than they are buyers. There seems to be a ton of houses for sales in our area and North Carolina hasn't been hit very hard with the housing crisis.

Should we wait? Go slow or dive right in? Leave a comment!

Buying A Home: Chapter One

Today, my fiancé  and I are meeting with a realtor that has been recommended to us for the first time. We only have a small idea of what we are getting into, but I am researching and I will be posting about our experience as first time home buyers. We know where we want to live, but not sure what we can afford in the area. We also do not know what our best option for getting the right mortgage, my fiancé works for the public schools so she might be able to get a better rate with the NC State Employees Credit Union.

Some of our main objectives for the meeting are:

What is our best option if we are only looking to stay for 3-5 years?  We know prices are falling and who knows what the next few years are going to be like for real-estate, what  should we do to protect ourselves so we are not in a situation where we cannot upgrade in 5 years.

Are there homes in the area we like that we can really afford? I like Dave Ramsey's rule of being able to afford a house:

Can I make at least a 10% (preferably 20%) down payment?
Can I afford a 15-year fixed rate loan?
Can I keep the house payments at or below 25% of my monthly take-home pay?

I've heard a good idea which I need to research more on, but to get a 30-year loan and pay it off in 15. The rate might be a little bit higher but it does take some of the pressure off if something where to happen? We will see about this one...

Should we shore up some credit? I have around 17k in debt that I can pay down if I needed to. The wedding ring is on a 0%APR for this year so I could  pay it down if I needed to. It really depends on how much that is going to effect our mortgage? We both have excellent credit so I don't think it will be a problem. When I first moved to North Carolina I spoke with a mortgage lender and he told me I had Grade A rating, so hopefully I can keep moving along paying every month .

What is our best option with receiving the Tax Credit for First-Time home buyers? We just want to make sure we do everything right so we can take full advantage of the credit. We are both first time home buyers, so how can we maximize this.

This is just a preliminary meeting and we will be moving forward from here, am I missing any initial questions I should be asking? Please leave a comment and everyone have a great weekend!