The American Dream

Many people have come to America for adventure, opportunity, freedom, and the chance to experience the particular qualities of the American landscape. The American Dream is the idea that every United States citizen, including immigrants and residents, should have an equal opportunity to achieve success and prosperity through hard work, determination, and initiative. America somewhat provides access to the American dream, it is more so the citizen who provides access to the dream for themselves. Even though they encountered many trials and tribulations, with persistence, people such as Langston Hughes in “I Too Sing America and Anzia Yezierska in “America and I” they were able to achieve their individual American Dream.

The topic of The American Dream has been brought up on many occasions. The arising issue that still ascends is whether or not The American Dream is alive or dead in the United States. The American Dream has come to the generalization of the personal perspective of any individual. The history of The American Dream has always gone back to the common man thinking of their future generations to come and how he will implant a positive outcome throughout it. Many now believe that the ideal plan of The American Dream cannot even be met anymore. Values and beliefs are now being questioned towards the aspect of upward mobility, the cost of education, jobs, and even affordable housing. Referring to an executive editor and vice president of Time Reporting, he states, “combined with a formidable American work ethic, made the pursuit of happiness more than a full-time proposition” (Meacham, Keeping The Dream Alive). This statement is targeted towards the actual definition of what The American Dream actually meant in various societies in the past. Happiness and a full-time of gratitude were critical aspects towards being met because it was the initial reason for this ideal. Some of the key causes and components that affect the way The American Dream is supposed upon today is the basic principles of economics, education, and a downward spiral. These reasons lead to The American Dream being considered in a diverse way with much complexity. The American Dream was different from the past and

The ideal that every citizen of the United States should have an equal opportunity to achieve success and prosperity through hard work, determination, and initiative. That is the definition of the “American Dream”, but the way it is interpreted changes from generation to generation. As stated in the prompt a big portion of the “American Dream” is one day being successful enough to purchase your own house, or at least that is how the Baby Boomers interpreted it. Millennials are now taking over and a lot of them do not have the same view.

a. What are the different tax consequences between paying down the mortgage (debt) and assuming a new mortgage (debt) for Federal income tax

Should you buy a new house or pay off the old mortgage. When it comes to tax laws mortgage interest expense is applied as a deduction only for itemized and even that amount is only used if it exceeds the standard deduction. Section 163 (d), provides the limitations on investment interest, and Section 163 (h), disallows deductions for personal interest unless exempt. For 2011, the standard deduction amount for MFJ is 11,800. There is a tax savings of $50,000 that can be used towards a new home when a taxpayer sells principal residence.

The Federal Housing Administration, otherwise known as the FHA, is a government agency created to help alleviate the case of homelessness in the country. The agency is under the authority of the Department of Housing and Urban Development (HUD), set up in 1934 after the Great Depression. The primary purpose of establishing the FHA is to oversee different insurance programs for single family mortgages, insuring mortgage loans provided by HUD-approved lending institutions. In order to get FHA loans, buyers are required to have a satisfactory credit rating and make a down payment.

“When you rent, you write your monthly check and that money is gone forever. But when you own your home, you can deduct the cost of your mortgage loan interest from federal income taxes, and usually from your state taxes” (Home Buyers Guide, p4). Buying a home can be alarming, if you are not prepared, whether for the first time or even for the fifth time. If you take time before going into the process to gain the knowledge needed, one might see that

On June 27, 1934, President Franklin Roosevelt signed the National Housing Act, with the goal to improve the housing standards and conditions, as well as provide a mutual mortgage insurance system. It came at a time when at least half of the nation’s home mortgages were in default, millions of people were losing their homes, and the construction industry was halted. This law in turn created the Federal Housing Administration (FHA). The FHA set standards for construction and underwriting, and it provided mortgage issuers, such as banks and private lenders, a federal guarantee of repayment. The purpose of this was to revive mortgage lending for house construction, home improvement projects, and home purchases. Not only did the FHA’s program

After the bursting of the United States housing bubble, many homeowners found themselves in a dire situation. Following the dot-com bubble burst, the Federal Reserve slashed interest rates, meaning credit was cheap. Lower lending standards also meant that consumers with not-so-great credit were suddenly able to attain adjustable rate mortgages with a minimum of money down and easy initial terms. In 2004, approaching the pinnacle of the housing market’s climb, former Federal Reserve Chairman, Alan Greenspan, actually encouraged Americans to take out adjustable rate mortgages. Then, as 2006 came, Americans saw the housing market reach its peak and subsequently plummet downward. As a result, it became difficult to impossible forthe borrowers

President Franklin D. Roosevelt’s affordable housing initiatives of the 1930s were responsible for the rapid expansion of home ownership and economic stability throughout the United States following The Great Depression of 1929 (Allen and Barth, 2012). Leading economists have viewed affordable housing as one of the key components of a healthy economy ever since. (Bluhm, Overbeck and Wagner, 2010). The Federal National Mortgage Association conceived during the time of his administration, provided an abundant amount of affordable housing through low down payment mortgages extended over a 30-Year period. In 1940 the median price of a single family home in the U.S. was approximately two times an average borrower’s median income. The Housing Cost

During the great depression in 1934 many people didn’t have jobs. Not having jobs meant that it would be awfully hard for them to obtain a loan from banks in order to purchase homes. The government decided to help the American people by creating the Federal Housing Administration (FHA) which basically stepped in and allowed banks to offer mortgages to more people with the promise that the banks would get their money back. The FHA finances itself with insurance premiums that they charge borrowers as well as interest that they receive on reserves. They use these funds to underwrite more loans which helps out people with their mortgages.

Homeownership has long been a highly valued feature of a strong and wealthy economy and policy-makers in the United States receive a lot of support in developing policies that promote homeownership. The U.S. tax structure and many federally sponsored state and local programs provide benefits to homeownership and seek to increase ownership among disadvantaged groups, respectively. One feature of the federal tax code is mortgage interest deductions. Mortgage interest deductions are a costly but very popular tax deduction that is argued to have contributed to the housing bubble. From 1913, when income tax was introduced, to 1986, when Congress passed the Tax Relief Act of 1986, tax payers deducted all personal interest (Morrow,2012). The Tax Relief act phased this out with the exception of mortgage interest because Congress wanted to promote homeownership. The deduction does not have to be used on someone’s primary home and can be used on up to two homes. The mortgage must be secured by a home and the mortgage must be recorded. For interest to be deductible it must be either grandfathered-in mortgage debt (incurred before October 1987), debt incurred to either buy, build, or improve a home- up to $1 million, or other debt secured by a home up that can be used for any purpose- up to $100,000. The amount of the deduction is the amount of mortgage interest paid in that year multiplied by the taxpayer’s marginal tax rate (Morrow,2012). But the deduction is only useful for people

If you are a homeowner, you more than likely qualify to reduce your taxable income by the amount of interest that has been paid on your home loan. This tax deduction can be applied to interest paid on a condominium, cooperative, mobile home, or a boater recreational vehicle, as long as it was used in a residence (Home). The mortgage interest deduction (MID) is the largest personal tax deduction currently on the books and is also considered the most beneficial tax benefit in the country. MID is making homeownership more affordable and achievable for middle-class Americans (Home).

Home mortgage is any interest you pay on a loan that is secured by your home. The loan may be a mortgage to buy your home, a second mortgage, a line of credit, or a home equity loan. The mortgage interest deduction is an itemized deduction that allows homeowners to deduct the interest they pay on a loan used to build, purchase, or make improvements on their principal residence. This deduction can also be used on loans for second residences and vacation residences, but there are certain limitations.

To understand what mortgage products are available, it is worthwhile to understand what they are comprised of; the repayment type and the interest rate. There are also taxes, lender fees and other costs. Firstly, mortgages vary by how you repay the capital, or money borrowed. There are three types of repayment plan: repayment, interest-only, or a hybrid of the two. In addition to the repayment, there is interest that the lender charges you to borrow capital. It comes in three types: fixed rate, tracker rate and variable rate.