As President Donald Trump continues to surprise the nation and the world, one thing may be more certain than others – and that is the possibility of mortgage rates going up. In fact, within mere hours of his inauguration back in January, President Trump issued an order that, while it got very little public attention, could end up impacting the bank accounts – and the monthly bills – of many Americans.
This had to do with the removal of a fee reduction for Federal Housing Administration (FHA) loans – a move that was initially authorized by former President Obama in early January. This move basically ceased a reduction in mortgage insurance premiums for loans that are FHA-backed (even though these cuts had not yet actually gone into effect).
This fee was intended to be reduced by 0.25 percentage points on the total amount of money that was borrowed by a home owner. So, for instance, those who borrowed roughly $200,000 would be able to save in the neighborhood of $500 throughout the course of a year. (And, the higher the amount borrowed, the higher the annual savings would be). For some potential home buyers, this could have meant the make-it-or-break-it amount that allowed them to move forward with the purchase of an affordable home.
In general, mortgage rates overall could rise throughout Mr. Trump’s administration. In doing so, though, rates could also face a great deal of volatility – which is due in large part to the uncertainty regarding what will be occurring in the future, primarily in light of the President’s plans for tax reform and financial regulation.
If you’ve been on the fence about whether or not to purchase a new home, now could be the right time. When you are ready to move forward, give us a call. We’ll help you to find a home that meets your needs in terms of size, layout, location, and affordability. And, we’ll also provide you with a no obligation valuation of your current residence.