Utah first-time homebuyers already had to plan for higher mortgage processing fees on certain home loans because of the payroll tax extension, but somewhat lower in profile has been the expiration of the mortgage-insurance tax deduction, which could affect homeowners just as significantly as higher fees.
The Federal Housing Administration (FHA) backs loans to low-income homeowners and offers them low interest rates on mortgages. Homeowners who made less than $109,000 in income were able to make tax deductions on their interest payments until that option expired in December 2011, according to Bloomberg Businessweek.
In addition, higher annual premiums that recently took effect could further hinder certain homeowners who are trying to conduct a mortgage refinance. Even borrowers who took out a mortgage under the previous premium guidelines may not be able to continue paying the same amount should they take out a new loan. Despite these concerns, some industry observers think the issue has stirred up excessive ballyhoo.
"Rates are so low right now, that additional cost is marginal," Mark Goldman, a San Diego mortgage broker, told the news source. "The only impact it will have is on people who have a visceral reaction to being singled out to fund the extension of the payroll tax cut."
Still, certain homeowners may feel the brunt of these reforms. Bloomberg Businessweek cited a report by Barclays Analytics which estimated that FHA borrowers who have a $200,000 loan could be faced with an additional $500 in costs annually.
For some individuals, given this new borrowing landscape, buying a home in Utah could be more financially beneficial than conducting a mortgage refinance. Homeowners and prospective buyers should contact a local real estate expert if they are concerned with these new rates. This professional will provide a borrower with unique advice that conforms to their desires and connect them with a Utah mortgage company that can fulfill their needs.
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