The new version of tax reform bill was released on Friday, Dec 15th. In this 500 page bill, there are some changes that will have negative impacts on homeownership if it’s voted through by both Houses of Congress next week.
Limiting the mortgage interest deduction (MID) from – the current – $1 million to $750,000 on mortgages for the first or second home, will affect homeowners in high-tax states like California, New York, New Jersey, Maryland, Massachusetts and Illinois. Chief Economist, Nela Richardson, the lead of housing market research team on data reports at Redfin, published an article a few days ago and made some predictions for housing in 2018. According to her, if state and local tax (SALT) deductions are eliminated, people living in aforementioned states will consider moving to other states where they can get more for less money.
RealtyTrac®[1], released its Q2 2015 U.S. Residential Loan Origination Report on Aug 13 and here is a summary of their report:
the report shows that 1,950,267 loans were originated on single family homes and condos in the second quarter, up 22 percent from the previous quarter and up 23 percent from a year ago to the highest level since the third quarter of 2013.
The total dollar volume of loans originated in the second quarter was nearly $540 billion, up 14 percent from the previous quarter and up 29 percent from a year ago. Refinance originations represented nearly $307 billion in the second quarter, 56.7 percent of total loan origination dollar volume, and purchase loan originations represented nearly $234 billion, 43.3 percent of total origination dollar volume. As a share of total loan origination dollar volume, purchase originations reached a recent peak of 51.3 percent in the third quarter of 2014.
New closing rules are in effect as of today, October 3rd.
“Big changes are planned for how homebuyers finance their mortgages, and that almost certainly means that closings will take longer. In some cases, closings that now speed through in 30 days probably will require at least 60 days.
The changes had been expected to begin in August, but the effective date was pushed back to Oct. 3.
After the housing crash, Congress felt that we needed a better system of mortgage disclosures and procedures so that Americans can better protect themselves and make the best choices when getting home loans.”
The new version of tax reform bill was released on Friday, Dec 15th. In this 500 page bill, there are some changes that will have negative impacts on homeownership if it’s voted through by both Houses of Congress next week.