Ramifications Of The "Fiscal Cliff" On The Real Estate Market
Alot of great points here...I did the Call to Action for Realtors to my Congress leaders. We can only hope the POTUS and Congress stop putting their politics ahead of the our needs and hard-earned money. Last time I checked they are supposed to represent us.
It is hard to turn on the radio or TV and not hear about the present battle going on in Washington referred to as the "Fiscal Cliff". But I have heard very little about the Ramifications Of The "Fiscal Cliff" On The Real Estate Market.
Homeowners need to be informed that the "Fiscal Cliff could have a significant impact on the Real Estate Market, and on individual homeowners as well in four major areas:
- Increase in Capital-Gains Tax - If the Bush tax cuts are eliminated, the capital-gains tax rate will go up. If this happens everyone that sells a house in the future could end up making less on the sale of their home, because the capital-gains tax rate will go up from 15% to 20%. Also the new Federal Health-Care Tax of 3.8% will kick in on Investment Income for couples making more than $250,000. The combination of the two could be significant on many families.
- Expiration of Mortgage Interest Deduction - The tax deduction that many homeowners have have counted on for many years, may be eliminated, resulting in homeowners paying higher taxes.
- Expiration of Mortgage Debt Forgiveness Act - Homeowners presently doing a Short Sale may be in for a big surprise if the Mortgage Debt Forgiveness Act is eliminated. If this happens homeowners doing a Short Sale will be taxed on the unpaid portion of their mortgage, because it will be considered as taxable income by the IRS. This could result in more foreclosures if homeowners choose to be foreclosed on in order to avoid being further taxed. More foreclosure will likely result in a further decrease in home prices.
- Bailout of Federal Housing Administration - If foreclosures continue to increase, all the GSE's, Fannie Mae, Freddie Mac, and FHA will experience more losses. If the losses are high enough, taxpayers may once again be required to kick in money towards yet another bailout. Not to mention that more Lender will end up closing their doors, which in turn will make obtaining a mortgage more difficult.
The Ramifications Of The "Fiscal Cliff" On The Real Estate Market could be severe, and unfortunately homeowners are not aware of this, and will not realize the storm that maybe on the horizon until it is to late to avoid it.
*********************************************************************************
Info about the author:
George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com
Comments(0)