Richard Mize, Real Estate Editor
Homeowners beware, be careful, be warned
By Richard Mize
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Published: November 7, 2009
The new federal tax credit for homebuyers is one for the history books.
Buyers who have owned their homes at least five years are now eligible for a credit up to $6,500. First-time buyers and those who haven’t owned a home in the past three years can still get up to $8,000.
A purchase contract must be in place by April 30, 2010, and close by June 30.
First-time buyers, beware! Move-up buyers, be careful!
The tax credit is a kind of easy credit. If it makes you buy a house faster, great.
If it gets you to buy when you wouldn’t have otherwise, that’s the kind of thing that led to the national housing boom and bust in the first place.
A mortgage can be a source of comfort, a kind of savings account. But a mortgage is two-faced — ’twas always thus.
"A mortgage can be depended on to stick closer than a brother. It has a mission to perform which never lets up,” A.B. Cornell, editor of the
Kansas Plainsman, in Russell, Kan., wrote on his front page back on Dec. 29, 1875.
Cornwell was writing about farm mortgages during a drought and bust, but his point stands: Any kind of mortgage, like Victor Frankenstein’s monster, has a life of its own.
"Day after day it is right there, nor does the slightest tendency to slumber impair its vigor in the night,” he wrote. "Night and day, on the Sabbath and at holiday times, without a moment’s rest for sickness or recreation, the biting offspring of its existence, interest, goes on. ...”
Ask someone who has gone through foreclosure if Cornwell, with his increasingly purple prose, got it right:
"Like a huge nightmare eating out the sleep of some restless slumberer, the unpaid mortgage rears up its gaunt front in perpetual torment to the miserable wight who is held within its pitiless clutch,” he railed. "It holds the poor victim with the relentless grasp of a giant; not one hour of recreation; not a moment’s evasion of its hideous presence.”
Cornwell declared the mortgage "a genial savage of mollifying aspect while the interest is paid; a very devil of hopeless destruction when the payments fail.”
"More fearful than the terrible witches in Macbeth, the threatening fiend, Foreclosure, rears up its dreaded menace with the crushing weight of hopeless despair,” he warned. "Pity for the poor man who has this grim fiend in his household. Every hour of his life is fraught with one intact endurance of misery and dread embittered with a grievous load he is powerless to shake away.”
Be a homeowner. But beware. Be careful. Be warned.
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