We officially have our new government in office and it did not take much time for a new order that shakes up the financial world. Today Trump signed an executive order that will raise mortgage insurance bills for most first time homeowners, aka a lot of Orcas.
• Immediate, starting January 27th, 2017
• Raise of six-tenths of a percent each month
• $200,000 mortgage will go up by about $500/year
• Applies mainly to, low income, middle credit scores, or less than 20% down payment
• FHA, is a program that is funded by this rate hike, they underwrite banks when riskier borrowers default on their mortgages.
The Good, The Bad, The Ugly
• With more funding, the FHA could offer its services to more borrowers (The Good)
• With fed rates raising and this bill passing, mortgage prices are going to continuously go higher and will be tougher for first time home buyers and middle income Americans to afford mortgages. (The Bad)
• This Executive order only benefits the wealthy in America who don’t have to get this insurance (They Ugly)
Orca will continue to do quick updates these next few months, don’t worry you have an Orca by your side!