New President. New Home Loan Costs...

Mortgage and Lending with Horizon Lending Services, LLC NMLS # 198754

Elections do change the way we do business

With the newly elected president into his first week of office, sweeping changes have been made in many industries including Real Estate. One of the first actions that President Trump issued was reversing a popular insurance premium cut that outgoing HUD secretary Julian Castro had designed to start this week. As President Trump was taking the oath of office, Ben Carson was standing ready to take over HUD and the Federal Housing Administration. Along with assuming the position, Secretary Carson was quick to cancel the FHA Annual Insurance Premium Cut, a substantial cut to the insurance premiums that are owed on newly purchased FHA loans. 


How much are home loans going to rise? 

Well, loans themselves will remain pretty much the same until the interest rate is increased (some say in early spring). What will change is the proposed home loan insurance cut. The cut would have saved new homeowners at least $500 per year on a $200,000 home. Now that doesn't seem like a lot to some folks, but those borrowers now need to factor in higher monthly payments on a loan that offers a lot of hope to homebuyers with not a lot of money to put down but still need an affordable interest rate. 


Are the new FHA changes good for the Country? 

The new changes aren't entirely bad for the market. Some economist say the Insurance Premium cuts would create a higher risk for taxpayers due to the fact that FHA borrowers usually have lower credit scores. This alerts some politicians to prevent any measures that could trigger another housing crisis. One 

What is keeping homebuyers from purchasing while interest rates are still low?

One thing that is preventing new home buyers from taking the leap is home costs. As wages and costs continue to climb so does home prices. This contradicts the president's first order of action, focusing on illegal immigration. Most homebuilders depend on lower wage immigrant labor to cushion the costs of building new homes. Over the next few months, it will be interesting to see how the immigration reform will counter the costs of building new homes and obtaining loans for those homes. One thing is for certain, interest rates today are going to be the lowest you will see for a long time. So buy soon! 

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Pat & Sharon Mistowski

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