11-27-2012 10:46 AM
For those of your trying to get FHA financing, are you finding it more difficult to qualify or afford with the new increases in premiums?
Many 1st-time buyers are finding themselves displaced from the housing market due to a few emerging trends. Financing is increasingly difficult with FHA premium increases and the potential mortgage deduction threatened are pricing many financially weak 1st time buyers out of the market, or beat out buy cash or stronger down payment with secured financing. With lower priced homes being consumed by all-cash investors that make up 29% of all homes sales, 1st-time buyers are decreasing as a contributor to housing consumption and recovery.
What are you guys seeing?
11-28-2012 11:48 AM
Does anyone actually count on the mortgage tax deduction when determining if a house is affordable or not?
Nope. That never even factored in. If I was dependant on that in order to afford a house, I would take that as a sign that I could not actually afford a house.
11-29-2012 02:49 PM
OP was combining 2 unrelated things.
1. FHA MIPs being permanent instead of timing out after about 5 years
2 .Mortgage deductions being removed
#1 is just for FHA funds, that is having a shortfall. This would only kick in sometime in 2013 , though it is not an issue right now.
#2 would have a MASSIVE effect if it is approved. Because of the scope of that, the banks and Realtor lobby will fight tooth and nail to not allow it approved. It would also be a very un popular decision and I can't see Obama doing that as his "legacy". Chances of that deduction being removed are lower than congress giving itself a paycut...
11-29-2012 03:51 PM
#2 would have a MASSIVE effect if it is approved.
Why? It seems like most don't take it into consideration when buying a house. Those that are in the house, well, there isn't much they can do about it.
Or were you talking about a massive effect other than the housing market?
11-29-2012 09:17 PM - edited 11-29-2012 09:18 PM
Everyone takes that into account. In terms of raw numbers, it might mean 2000 to 5000 in tax reduction , due to the itemized deductions, but physcologically it is a big boost, it allows people to get into itemized deduction zone from standard deduction zone. So I still think the impact is huge, so huge that it wont be allowed to happen..