Rich Habits Podcast 9: New Housing Rule, Tax Loopholes, 401(k), and Debt
Apr 25, 2023
Tune in for insightful hot takes on new housing regulations that unfairly target responsible buyers. Discover the perplexities of a mortgage fee structure that penalizes high credit scores. Learn about strategic home buying tips, including house hacking and multi-unit investments. Explore the backdoor Roth IRA for savvy retirement planning and the need to prioritize paying off high-interest debt over saving. This episode wraps up with motivational quotes to inspire your financial journey.
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High-Scores Penalized By New Mortgage Rule
- The FHFA's new mortgage fee structure shifts costs from risky borrowers to responsible ones, raising rates for high-score buyers.
- Robert Croak and Austin Hankwitz call the change counterintuitive and economically nonsensical based on fairness and incentives.
House-Hack Before Buying A Primary Home
- Consider buying income-producing real estate first: duplexes, triplexes, or fourplexes to house-hack rather than a single-family primary home.
- You can refinance later if rates fall, but you can't recapture the purchase-price discount when homes are cheaper now.
Total Housing Cost Often Underestimated
- Many buyers underestimate total housing costs by omitting insurance, PMI, maintenance, and HOA fees from monthly calculations.
- Those hidden costs can materially raise your debt-to-income ratio and lead to being 'house broke.'