well, can’t say you weren’t forewarned! as we discussed a few months back and then again just last week the government is increasing the cost of real estate loans in effort to pay for the “non-tax payer funded” temporary payroll tax cut extension. no, there’s not a tax hike, per se, however, if you are buying real estate OR refinancing real estate with an FHA loan OR a conventional loan (see explanation here) then you, the tax payer, are funding the “non-tax payer funded” temp payroll tax cut. and I quote “The Temporary Payroll Tax Cut Continuation Act of 2011 requires FHA to increase the annual MIP (that’s Mortgage Insurance Premium) it collects by 0.10 percent.
beginning April 1st (a fool’s day….coincidence??) the UFMIP (up front mortgage insurance premium) will be increased from 1% to 1.75% of the loan amount. this increase comes off the heels of FHA’s increase to their MMIP (monthly mortgage insurance premium) a few months back from .55% to 1.15%. here is HUD’s press release.
again, I remind you that the President himself admitted that REAL ESTATE is the medicine our Country needs in order to ignite……and what better way to ignite the real estate market than making it more costly….BRILLIANT PLAN!