Little publicity has been given to a new tax on mortgages that was signed into law on December 23, 2011, as a result of the negotiations to extend unemployment benefits and payroll tax reductions. In this video, I discuss what this tax means for new mortgages.
If you have any questions about this new tax or other real estate issues,
contact me at 512-650-7300, by email, or the form below.
For those of you who prefer to read instead of watch, here is the general transcript of the video:
On December 23, 2011, the president signed into law a new tax on mortgages. In order to pay for a two-month extension of unemployment benefits and payroll tax reductions, a permanent tax will be imposed on new mortgages starting on April 1, 2012. This tax is 1 tenth of 1 percent of the loan amount so it will increase the monthly payment for the entirety of the loan. It applies to mortgages backed by FHA, Fannie Mae, and Freddie Mac, which currently account for approximately 90% of all new home loans. If a new loan is one of the 10% guaranteed by a private mortgage insurer, it would not be affected. Again, this is for new mortgages only and does not affect mortgages already in place. The tax is slated to be on all FHA mortgages originated for a 10-year period but is permanent for Fannie and Freddie.
I first tweeted about this as soon as the Senate passed this bill on December 17, so if you want to know what’s going on that affects real estate in Austin, follow me at http://Twitter.com/AustinHomeInfo.