Last month President Obama signed into law the Temporary Payroll Tax Cut Continuation Act. This Act uses increased guarantee fees (aka G-fee) on new mortgages to pay for reduced payroll taxes. The amount of the g-fee increases will be included in future mortgage costs.

As a valued client, I feel it’s important to keep you updated on critical updates within our industry that could affect your mortgage planning. The Temporary Payroll Tax Extension will increase mortgage costs on loans that are slated for delivery to Fannie and Freddie. This would include the vast majority of loans that are not government or Jumbo loans.

Mortgage lenders will factor in these higher costs within the next couple weeks. Bottom line, rates will likely increase due to this fee.

If you are thinking of refinancing or purchasing and want to avoid paying for the country’s Temporary Payroll Tax Extension over the next 15-30 years give us a call as soon as possible.

I have also attached a news link below that covers this topic.

http://www.housingwire.com/2011/12/29/freddie-fannie-to-raise-g-fees-in-april

Sincerely,

Chris Hutchens