BUY or Finance your house NOW, because on January 1, mortgaging your home will go up. If you are excited that the Payroll Tax Cut Extension got passed, know that it is being financed by higher fees on getting a mortgage!!! There will be a 10 basis point hike in Fannie Mae and Freddie Mac guarantee fees that are helping to finance this "Tax Cut", and those fees will be passed onto the consumer. The mortgage industry is reeling that the Government is using monies from Mortgages to finance the tax cuts. I guess we thought that the Government may just curb their spending or reduce some programs that don't really benefit the masses instead of increasing costs in an industry that is still struggling.
Doesn't financing it by a higher cost to buy or refinance a house make sense anyway, the housing market is after all doing a lot better with the new adjusted figures by NAR to reduce the past 3 years and make the November 2011 Housing Figures seem to be an increase!!!
The Payroll Tax Bill (H.R. 3630) signed by President Obama will generate over $35 Billion. The fee increase won't go toward the already $170 + billion dollars of bailouts to the GSE's (Government Service Enterprises), it will go directly into the Treasury and probably be spent on more Government Programs. The corresponding increase in FHA Fees (introduced in the Senate Version) will be phased in over 2 years and go toward the FHA reserve fund, not other programs.
Since the Interest Rates are low now anyway, they possibly don't think anyone would notice. Not sure how this will affect people applying for loans now that close in January, the window to avoid this cost may have already closed.
What do you think about financing the Payroll Tax Cut on the back of the Housing Industry which has yet to make any real turnaround after over 3 years of bad news???
You can read more here - National Mortgage News
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