Taxes for thought: Congress recently passed a temporary payroll tax cut and simultaneously imposed new mortgage guarantee fees on new loans closing in April 2012 and forward as an offset to the tax cut. Somehow Congress only speaks to the media about the payroll tax cut, so small business brokers like us have to be the ones to pass along the news. Fannie Mae and Freddie Mac are the lucky ones who get to pass along the fee to the mortgage wholesalers and banks that sell them loans. In turn, these large mortgage wholesalers and bankers will pass that cost directly to you, the consumer. It will be built in to pricing soon and we are seeing that happen already as new locks will be delivered in April or later. Congress has given you a break with one hand, and made you pay for that with the other. If you are lucky enough to be buying a home, it will most likely cost you an additional 0.125% in your loan rate. Something tells me that while the payroll tax cut is temporary, this guarantee fee will not be.

On the brighter side, mortgage rates have been at phenomenally low levels lately so if there was ever a good time to tax mortgagors, this isn’t so bad. Rates for a 30 year fixed are at or near all time lows. With rates at this level, we should not be complaining at all. The Treasury is buying mortgage backed securities which could be helping to keep rates at low levels. Another thing that has been good for mortgage rates is low inflation, which the US has had for a few years now and economists expect that continue through 2012 and possibly 2013. The housing market is a big driver of the US Economy. If you can take advantage of low rates today and low housing prices, ten years from now you may look back on 2012 when you bought your house or refinanced your mortgage and pat yourself on the back.

GO PATRIOTS !!!

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