Check out this story on the economic stimulus package that Congress and the White House agreed upon this morning. 

Bottom line: Most tax filers will receive rebate checks of $600 to $1,200 this year; parents will get an extra $300 per kid. Workers who make at least $3,000 but don’t pay taxes will get a check for $300.  

But don’t head to the mall yet – your rebate depends on your income. The rebates phase out for individuals whose incomes exceed $75,000 and couples whose take home pay is above $150,000. If you make more than $87,000 as a single or more than $174,000 as a couple you get bubcus, unless you’ve got kids. 

But the part of the story that really caught my eye was buried in a lower paragraph: The deal dramatically raises the limits on the size of mortgages that Fannie Mae and Freddie Mac are willing to purchase. Right now, those quasi-government entities, which create a secondary market so banks can sell the mortgages they give to consumers, buy mortgages of $417,000 or less. Now the limit will be eye-popping $725,000 in high-cost areas. 

That alleviates one of my big concerns about the real estate market where I live, New Jersey. Here, a decent starter home costs in the $500,000 to $600,000 range. I figured the market here would slide because a) companies wouldn’t offer jumbo mortgages, even to buyers with great credit, because they couldn’t sell them (amid the Wall Street securitization debacle); and b) how many people have the cash on hand for a downpayment of $100,000 or $200,000? I’ve no plans to sell my house anytime soon but it’s reassuring to know that buying and selling of the spring season will resume without some kind of frightning dislocation. As they say, the market is all about psychology.

The air conditioning on my ’96 Town and Country car just died and will cost too much to fix (at least in relation to the cost of the minivan). So I’ll probably add the rebate to my cash earmarked for a new (used) car. Where will your rebate go? 

• An Immediate 10% Return on Your Rebate Check
• Making the Most of “Cash for Clunkers”
• A Primer on Rate Cuts
• Lottery Winners and Insuring the Future
• Making Credit Safe for Consumers

This entry was posted on Thursday, January 24th, 2008 at 1:30 pm and is filed under Money & Happiness, economy, spending, taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.