There has been a drastic change in the economic condition of many nations. Poverty is slowly taking the throne as the economic crisis progresses at a much faster rate. The effects of this global crisis is devastatingly great that a fall out or a complete down fall will be witnessed by many in the course of time. Aside from the destruction returns that were manifested already by the society, the threat of being in constant dilemma is possible. If that happens, it would be very difficult for the economy to recover.
To somehow put a pause in this, the people began changing the way they manage their own lives. This action along with the government’s established program, the society is hoping that a larger destruction would be stopped should the nation hold tight to this battle.
While on the verge of fighting against the eating poverty, the government had set programs that will help those who are looking forward to purchase a hose of their own for the first time. This program is called as the first-time homebuyer credit. In this program, first-time homebuyers are eligible to receive up to a $8,000 credit or 10% of the purchase price of the home. The revised act also allows long time homeowners (the same home for five consecutive years of the past eight years) buying a replacement principal residence to receive a credit up to $6,500 or 10% of the purchase price of the home. This happening had made a significant change to fist time home purchasers.
Like any other programs, the first-time homebuyer credit has many advantages and disadvantages. One of the advantages noted with first time home buyer credit is that it shortens the time by which a buyer would buy a property since there is no need for a buyer to save up first for the down payment. Also, people could make use of the money in the form of a down payment or received the money and use to purchase furniture or paid an existing debt. In terms of consumer spending extending the credit seems like a great idea.
But there seems to be point in this program that the people fail to understand. Now that the $8,000 is free the housing market is speculated to harden. One must keep in mind the $8,000 tax credit also comes with a promissory note to make a monthly mortgage payment. Consider thinking about the tax credit that will cost you in the future.
The total cost of tax credit is subdivided into 2 components. In the future, people must realize that taxes would be increased so that the monies that are given to first time home buyers will be paid back. Although it was said to be grant and doesn’t require you to payback, paying back could still be done without actually asking you to.
Although this might seem so unreasonable at all, it is best for any first time home buyer to think about their other options. This is not to say that they should disregard this government program. Of course, like any other transactions, it is good to first assess well all your options before making a decision. After all, that is the technique of those wise and intelligent businessmen. Take your time to think and think well of your every move because in this royal battle, a mistake is not consider.