The first-time homebuyer tax credit has improved the real estate market when defaults on homes and foreclosures were becoming a common occurrence. However, the reports of foreclosures and defaults are still considered a big problem. So, is the first-time homebuyer tax credit really working or are the foreclosures and defaults on mortgages really a problem?
The first-time homebuyer tax credit has allowed new homebuyers an $8000 credit and repeat homebuyers a $6500 credit. Great deals of people have taken advantage of this program and reportedly many who qualify and haven’t taken advantage are still able due to the first-time homebuyer tax credit extension. So, why are there so many reports of foreclosures despite the praises of the first-time homebuyer tax credit?
The consensus is that the foreclosures are an aftermath from the economic car wreck and the new programs in place are actually doing more for the real estate and mortgage industries than the foreclosure numbers show. There are mortgage modification and first-time homebuyer tax credits that are working to aid the housing market and even financial institutions are working with homeowners who are struggling yet don’t qualify for these programs so they can keep their homes. An example of this is Fannie Mae has begun a mortgage-for-lease program where they allow homeowners whose homes have been foreclosed on are allowed to rent the home for up to a year while the home is on the market and the family keeps a roof over their head.
So, the foreclosure problem is a result of the leftover problems from the recession. Jobs were being cut en masse and workers were laid off by the thousands and while the job market has yet to recover there are still countless individuals who have no income at all, and of course they are losing their homes. It is a said affair that many are out of work and becoming homeless, but that isn’t a real estate problem but rather a job market/employer problem.
The first-time homebuyer tax credit and similar policies have made it easier for people to either keep their homes or purchase new ones so the reports of foreclosures doesn’t indicate a still-floundering housing market, but rather the foreclosures are the small waters still receding after a flood.
Even though millions saved money with their first time homebuyer tax credit it is now the case that this extra cash has run out. Some are looking to take advantage of First Citizens Bank money lending options. Rather than taking out a new credit card or unsecured personal loan it might be a good idea to research other ways to get your hands on some cold hard cash.