Government-backed 6% home mortgages?Government-backed 6% home mortgages?
A leading New York-based real estate consultant has called on the Bush administration to adopt a government-supported, six-percent mortgage for first-time homebuyers First-Time Homebuyer
An IRA owner who is exempt from the early-distribution penalty (which applies to IRA distributions that occur before the IRA owner reaches age 59.5) for distributing funds from his or her IRA to buy, build, or rebuild a home when having had no interest in a tied to a "better-time-in-life payback Payback
The length of time it takes to recover the initial cost of a project, without regard to the time value of money. ."
Under the unusual mortgage plan, the difference between the artificially-created rate and the actual mortgage rate at time of purchase would be repaid to the lender when the house is sold, notes Ric Katz, president of Pinnacle Marketing & Resources, Inc. In addition, he adds, the gap could be reduced during the life of the mortgage as the buyer's income increases.
Admitting that his plan contains some risks, Katz nevertheless urged its consideration to get a moribund moribund /mor·i·bund/ (mor´i-bund) in a dying state.
At the point of death; dying.
mor housing market moving again.
"We're sitting by doing nothing while first-time homebuyers are continually squeezed out of that all-important first chip in the housing game," said Katz. "If strong methods are needed to help them by bringing home-financing into the 21st Century, let's adopt them now, while we have something left to salvage salvage, in maritime law, the compensation that the owner must pay for having his vessel or cargo saved from peril, such as shipwreck, fire, or capture by an enemy. Salvage is awarded only when the party making the rescue was under no legal obligation to do so. ."
Katz envisages a 30-year maximum on the reduced mortgage payments, and a $150,000 ceiling on what can be financed. When the home is sold at any time during the life of the mortgage, he adds, the gap must be made up immediately. In addition, as the mortgage holder's income goes up, preset preset Cardiac pacing A parameter of a pacemaker that is programmed permanently when manufactured levels automatically trigger increased mortgage payments, creating a safety valve safety valve, device attached to a boiler or other vessel for automatically relieving the pressure of steam before it becomes great enough to cause bursting. of sorts for the lender by steadily reducing the deferred portion of the mortgage.
"Everyone must take that extra step to make the plan work," Katz noted. "The buyer must accept a smaller profit after the resale of the home. The lender must wait until the loan matures or the house is sold before realizing most of the interest. And the governmental agency lacking the program must be prepared to make up the difference if the home doesn't realize its full value and still leaves a gap in the mortgage repayment schedule after sale."
The Federal Government should be willing to grant such assurances, noted Katz, because of its history of strong commitment to housing.
"Such programs as the Veterans Administration and the Federal Housing Administration Federal Housing Administration (FHA)
Federally sponsored agency chartered in 1934 whose stock is currently owned by savings institutions across the United States. The agency buys residential mortgages that meet certain requirements, sells these mortgages in packages, and insures also contained some risk at the outset," he says. "But they were instituted to provide opportunities for home ownership to those who sorely sore·ly
1. Painfully; grievously.
2. Extremely; greatly: Their skills were sorely needed. needed them.
"Now, that need is present again. And we can accomplish our goals with a program where the risk is really minimal; under the |better-time-in-life-payback' plan, if the house only appreciates only three per cent annually over the life of the mortgage, everyone will benefit."