First Time Home Buyers

Real Estate Agent with ReMax Preferred RIL#b16447 MAL#9501751

This past week I took one of the Continuing Education courses necessary to maintain one's Real Estate License in RI.  The subject of one of the courses was Mortgage Finance for First Time Home Buyers.  Being the type of guy who enjoys keeping up on current events, and most things political, I am well aware of the $8,000 Tax Credit for first time home buyers put forth as part of the President's stimulus package.  I've had my reservations about this from a fiscal perspective, but I think it will stimulate things in the short run because it will get more people to buy a house.  These buyers then have to hire movers, buy furniture, curtains etc, which all serve to stimulate the economy.  That being said, I was presented with a hypothesis from a mortgage broker that I had not even considered prior to taking this class.  This broker has observed that a significant portion of the home buyers who have been utilizing the $8,000 Tax Credit in order to qualify for a mortgage, have a financial profile similar to the sub prime home buyers of recent history who, collectively, some professionals feel had a contributory role in the current financial collapse. 

My question is:  Do you agree?  In your professional experience, since the Tax Credit was implemented, have you observed some similarities between the "typical" sub prime home buyer and the "Tax Credit" home buyer who would not otherwise qualify for a mortgage if it were not for the Tax Credit of $8,000?  I have not personally had much experience with first time home buyers this year so I do not feel justified in making a call.  This is an intriguing hypothesis and I am curious to hear all of your input.

Until next time be well and be wealthy!


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Joseph Luca

Joe Luca
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