Help home buyers to help the economy

Portsmouth is one of the most desirable communities on the Seacoast, and this is the busiest time of year for home sales. In Newmarket, there were 50 Homes for Sale in that price range on Thursday with just one under agreement. The federal government made an effort to stem foreclosures and jump start the market with its homebuyers tax credit a year ago. Various studies point out how home sales drive the economy in job creation and retail as associated with buying the things one might need and want to make a new home their own. The interest rate could be 1 percent, but it's unlikely to spur a surge in home sales. For a $300,000 home, this means $10,500 for an FHA loan. This is a challenge for first-time buyers and those looking to upgrade as many homes are near or below the "underwater" mark. The days of 12 percent annual appreciation are long gone. Buyers are mostly no longer able to roll closing costs into their mortgage, even if buying a home for less than their qualified amount. Buyers have turned to asking sellers to pay closing costs. In theory, it's a way around the new mortgage policies. However, in practicality, it's contributing to the market strangulation as many sellers don't have equity to contribute, say, $9,000 in closing costs. No longer are most, if not practically all buyers, able to do 80/20 split mortgages to avoid personal mortgage insurance. On a $250,000 home, you may be looking at about $231 a month in private mortgage insurance. The tax is 75 cents per $100 of the transfer price and levied on buyer and seller. It's laughable to use $100 as the base of calculation to present 75 cents as the levy. It's $750 per $100,000, an accurate base for what homes cost. For the buyer of a $200,000 home, it amounts to $1,500. And, it's difficult to roll this into closing costs or have the seller pay it. There may not be an easy answer, but one suggestion is for politicians and business leaders to actually try to understand the realities of the people they serve. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment. New comments are only accepted for two weeks from the date of publication. Homes for Sale