Thursday, March 11, 2010

Thurs March 11 2010

Ahoy!hoy! I'll just say this. It's much easier to write a blog entry a day when you're not working, sleeping at your brothers place with not much to fill your time except eat, sleep, and throw out the occasional chum on fb. I'm back in Vegas and frantically trying to get my taxes done so I can apply for a mortgage and find a house to buy all before the end of April.
For those of you too busy watching Team Canada rumble over the world in Olympic curling to be up-to-date on the US housing situation, I'll fill you in. Basically, because most people point their fingers at the US housing sector as a major cause of the economic crisis and (hopefully) future cure for the crisis, the US and A government enacted tax legislation to stimulate demand in the housing market (I feel like I'm back in econ 101, writing a paper). In fact the US and A government is offering 2 significant incentives. The first is that any first time home buyer get an $8,000.00 tax rebate. Second, first time home buyers also qualify for a government backed loan for which they only have to put 3.5% down. Do the maff. Notice that the median price of a home (in the West) is about $200, 000.00 (less in Vegas). What's that down payment work out to? Hmmm...the number seems remarkably close to that of the tax rebate. In other words, if anyone buys a house before the end of April (tax credit deadline), the down payment if refunded by the government. Will a deal like this ever come along in my lifetime? Unlikely.
The next section I will name "Why I am soooooo Smart...S-M-R-T". There's one little problem most people have, especially in Vegas: they don't pay very much tax because they don't claim a lot of their tips. The problem with this is that loan officers are very strict since the sub-prime meltdown so now when you apply for a loan, the way the officer verifies your income by looking at your previous 2 years of tax returns and the amount of taxable income you claimed. This is the amount you can borrow against. They don't care what your gross was pre-deductions, they only care about the taxable income. Many people in Vegas also go the route of reporting income, but over inflating their expenses to pay less tax. The problem with this is now they can't borrow any money. So why am I so smrt? Because I paid MORE taxes than I had to! As far as I know it's not illegal to pay extra tax, and now after two years of doing this I can apply for a nice sized mortgage. Especially my 2009 return I knew that I'd be getting $8,000.00 back, so why not pay extra so I can get the better loan? I'll get that money back in a few months anyway. And that is why I am soooooo smart, S-M-R-T!

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