The Bill That Makes You Work Harder To Pay More for Buying a Home

Anyone who has ever purchased a Buena Park home will be quick to point out that some of the joy that comes with closing the deal on their dream home was tempered by high mortgage costs. The bad news is that those fees look as though they are about to get even higher, and for that you can thank Congress and their proposed Tax Bill H.R. 3630. Basically, if the bill passes, which now looks like a certainty, the guaranteed fees paid to Fannie Mae and Freddie Mac will be increased by 10 basis points, and that increase will find its way back into your mortgage costs as a result buying a home.

The bill that makes you work harder to pay more for buying a home

While that would prompt most potential low income home buyer’s to seek out a cheaper FHA mortgage, that path has been somewhat closed down to, thanks to a 10 basis point increase on FHA mortgage insurance. Not only is this going to make paying for a mortgage all the more expensive, chances are it will also add even more time onto the closing process, which has already seen a spike over the past few years. The sad thing is that most potential home buyers probably have no idea that the passing of this bill will impact their purchase, and that is because the bill is actually aimed at payroll tax cuts.

You see a bill names Payroll Tax Cut H.R. 3630, and it’s entirely natural to assume that it will have something to do with unemployment benefits, social security, and job creation. You actually wouldn’t be wrong in that regard, but like most government bills, the money to actually pay for that bill has to come from somewhere, and a good chunk of that will be coming out of the pockets of the people who want nothing more than to purchase a new home.

The possibility of those extra costs are going to impact the low income house buyer more than anyone else, and not just because of the increase in the FHA mortgage insurance. Buying a home on a low income is never easy, and those added costs could end up making any sort of sale prohibitive, which ends up being bad for everyone in the real estate industry, from the buyer, to real estate agents, and all the way up to the lenders. The real estate business was hit hard by the recession, and an increase in new home buying is a sign that the economy is in recovery. If that is stalled by a hike in mortgage fees, then it will go a long way towards killing the progress that has already been made.

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Congress is due to meet on the week of January 16th to start the discussions over the payroll tax cut once more, and with both sides digging their heels in once more, it looks as though it’s going to be the average, hardworking individuals who live in Buena Park is going to suffer again. If you have been on the fence about buying a home, then it may be time to get off of it, and make it happen before the bill passes and the higher costs go into effect.

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