New home loans will help fund new tax cut

Starting January 1st the typical person who buys a $200,000 home or refinances that amount with a FHA loan will have to pay around $17 more a month for their mortgage, thanks to a fee increase included in the payroll tax cut bill that the Senate passed Saturday. It is said that the fee increases would be phased in gradually.

To cover its $33 billion price tag, the measure increases the fee that the government-backed mortgage giants, Fannie Mae and Freddie Mac, charge to insure home mortgages. The increase will also apply to people whose mortgages are backed by the Federal Housing Administration.

The higher fee would not apply to people who currently have mortgages unless they refinance beginning next year.

If you have any questions about these fees, please feel free to contact Scott Groves at (818) 679-5188