Musings: This idea still works for homebuyers
Here is a possible alternative to giving first-time homebuyers money. When I purchased my first house in 1979, interest rates for home mortgages were 13%. The Federal Housing Administration offered and still offers graduated payment mortgages, which take a portion of the mortgage payment and accrues it over the first five years and adds it to the principal. After five years, the mortgage starts to amortize with the new principal amount.
The lower starting monthly payment helps new buyers purchase a house with the expectation that their income will grow. The idea behind it is that at the end of five years, they could afford the higher monthly payments.
A proposal to give first-time homebuyers $25,000 would likely lead sellers to increase the home’s price by $25,000, and the problem will not be solved. It might buy votes, but it will not solve the problem.
We need to stop expecting government handouts to solve an issue it created with inflation and high interest rates.
— Kevin McGrath, Northport
[BOLD]WE ENCOURAGE YOU TO JOIN OUR DAILY CONVERSATION.[/BOLD] Just go to [BOLD]newsday.com/submitaletter[/BOLD] and follow the prompts. Or email your opinion to letters@newsday.com. Submissions should be no more than [BOLD]200 words.[/BOLD] Please provide your full name, hometown, phone number and any relevant expertise or affiliation. Include the headline and date of the article you are responding to. Letters become the property of Newsday and are edited for all media. Due to volume, readers are limited to one letter in print every [BOLD]45 days[/BOLD]. Published letters reflect the ratio received on each topic.