The Fate of Mortgage Under Bush

After Bush’s second victory, governmental provisions will occur, changing many laws and issues in society and the economy. Although the President has control over many social situations, he does not have a whole lot of power when it comes to things such as housing.

The mortgage rates will only be influenced indirectly by the President’s policy changes on taxes and spending. Other than these regulations, the mortgage rates will not be controlled by anything other than the economic state and market trends thereafter.

Even though there are many factors that cannot be pinned down when it comes to mortgage rates, there are expert predictions of higher rates. The likelihood of higher mortgage rates in the next four years is almost 100 percent certain, and the only question is how much and how frequently will the rates change?

The reason that rates will almost positively change is that the economy is improving and more jobs will create higher incomes and more investors and loan consumers. What throws things off is the federal budget deficit--expected to reach $422 billion--that is likely to increase interest rates. This is very hard to tell since so far the deficit has not affected interest rates under Bush’s presidency.

Some housing-related topics are likely to pop into the news in the near future, including mortgage interest deduction and/or mortgage insurance deduction. There is no clear prediction of the possibility or probability of these deductions going through, but it is fairly certain that Fannie Mae and Freddie Mac will give more options and benefits to low-income homeowners.

It has been said that the President may propose a zero down payment plan on more mortgages, although this issue is refuted by home builders who want their fair share of payment.

So, the future capital market and mortgage rates are really part of a fuzzy picture, but the least we know is that rates will rise and more loan benefits are possible.