I know that this may be somewhat of a political post but I just need to get this off my chest. Why doesn't someone in the Government know how actually help/fix the real estate/housing problems? You know, it went from one extreme where anyone and everyone could get a loan and buy a home (which they couldn't afford) to making it almost impossible to get a loan. There are some really lame ideas of what would fix the whole recession we are in. Two things that come into mind right now are:
- 1. The FHA proposing the new mortgage insurance premium structure for new case numbers effective on October 4th. This proposal means a smaller loan amount because upfront frees will be lower, but the monthly payment will be higher due to higher PMI payments. This could mean the borrower qualifies for less of a loan amount~If a base loan amount is $100,000 the current total loan amount with (MIP) - $102,500, Current Payment @ 5.00% (P&I with MIP) = $591.91. Future base loan amount - $100,000, future total loan amount with (MIP)- $101,000 Future Payment @ 5.00% (P&I with PMI) = $625.25. This scenario has the future house payment $33.34 higher than the current house payment.
- 2. The Government wanting to do away with Mortgage Interest Deductions (MID). I read that 67% of Americans own homes many under the $250,0000/year threshold and that nearly 39 million people claimed the mortgage deduction. Those in the $100-200,000 income range, the average MID claimed was almost $14,000; meaning the value of the write-off would be $3,500. For those making $75-100,000, the deduction was around $11,000; resulting in savings of more than $2,800. Those in the $50-75,000 bracket, the average deduction was $10,000 with a savings of $2,500. I have also heard that if this goes down, not only will you lose your most valuable item of deduction, but the value on every home in America can will drop 15 percent. HOW IS THAT HELPING? There will be lots of homes on the market and STILL nobody buying/can't buy.
I wish they would keep the deduction the way they are. They work. Since it is harder for people to get loans, FHA shouldn't penialize homeowners or future homeowners. Just keep them the way they were.
I believe we need someone with a good strong business sense-a real estate sense and someone who is looking out for ALLclasses of people!
If someone has any insights into any of these two things. Please try to shed some light on them for me. The good, bad or ugly. I want to hear something positive about these.