Net Worth Week 58 – Graduation Edition

Gentle Readers,

My gig continues to be managed very poorly. Once the supervisor who hated this project got a new job, it has gone downhill faster and faster. They promise there is a ton of work to do, but they are not staying enough ahead of us, me really, to ensure that there is work available when necessary. It’s frustrating. I sit at my desk waiting for work. At least I get paid when I wait. Their mismanagement messes up my ability to get overtime as planned.  Nothing is promised and I have to keep remembering that. Thankfully, I am still doing well.

A coworker I like on another project let me know about some job postings within our field but a level up. He found the pay rate and what skills we would need to show in order to qualify for it. I appreciate that he looks out for us.

I am off to my family member’s graduation party this weekend. It is important to show up for significant milestones. I’ll also get a chance to have a girl’s day with my best friend from middle school. Since she has children, I am letting her pick what we do. She gets less downtime than me. If she wants us to hang with her family or if she needs away time, I’m happy. I love her family, and I will do my part to contribute to its happiness.
My TMJ is acting up. I’m trying to do a better job taking care of this pain, but stress triggers it.
The markets were rocky this week. I wonder what they’ll have in store for us with all of the ridiculous goings-on in our Administration. My IRA is down, but my net worth is up. I’m heading in the right direction. This is the fourth week with a positive change in my net worth!

This week’s net worth numbers

5/12/2016 5/19/2017
 Joy 1106 1106
 Travel 1  1
 Down Payment 19 19
 Retirement 21 21
 Health 45 45
 Moving 285 285
 EF 11 11
Business 1003 1003
Life 832  1644
 IRA  13002  12883
 Brokerage 693  685
 Rewards Card 2 -1572 -1474
 CC (largest) 0  0
 CC (longest) 0  0
 Rewards Card -999 -918
SL 1 -104577 -104693
 SL 2 -46068 -46121
 Earnest -4862 -4872
 Net Worth -141059 -140374
 Percentage Change .95% .49%

Have you noticed the rocky market or just kept on with your plan?

Trump’s First Executive Order and Your Mortgage

Gentle Readers,

You remember when I learned last summer that changes in FHA Mortgage Guidance would alter my ability to acquire a mortgage. My debt to income ratio has not improved significantly in the past 6 months, as anticipated. I did not think I would be able to pay off $45000, commonly referred to as SL2.

One of Trump’s first acts as the new President of the United States was to make mortgages harder to acquire for middle class folks.

The previous administration had a policy that Trump’s Administration blocked immediately upon assuming office. The policy was on track to reduce the cost of mortgages slightly for many home buyers. The policy was not yet in effect, but was imminently going to impact folks.

What policy are we talking about?

HUD sent a letter suspending the 0.25 % point premium rate cut for FHA-backed loans.  Nearly 20% of mortgages are FHA-backed. The beauty of the FHA is that their criteria make it accessible for more people to access capital necessary to buy a home and enjoy the tax benefits of home ownership. Their most-touted benefit is the significantly lower down-payment. As low as 3.5% of the purchase price. Homes in my high COL area regularly go for over $400,000. A standard 20% down payment is $80,000. A 3.5% down payment is $14,000. It is not hard to see why so many Americans need the help afforded by FHA.

How big is this impact?

Frankly, not big at all. The cut Obama attempted to enact would have saved homeowners with a $400,000 mortgage $58 per month.  Not insignificant, but not overwhelming for most people shopping for a mortgage.

The housing market in parts of the country, mine included, have been on fire lately. The prices are sky-rocketing. Some folks look at high prices and want in. It is unclear if this action will throw water on the housing bubble, but it might.

The most fascinating part for me is that Trump has re-made the fortune he was gifted by understanding the benefits our tax code gives to real estate. Having learned every trick in the book, is he going to encourage the IRS to re-write the book? May the US end a half-century long policy of encouraging home ownership through the tax code? If they did, would that be a bad thing necessarily?

A lot remains to be seen, but I think these tea leaves are impossible to read just yet.

Would you be happy to amend US tax code and move away from a home ownership model?