Several factors that occur throughout this year are expected to drive costs higher for new mortgage loans. For starters, March 1 and April 1 mark the start of new and increased fees for Freddie Mac and Fannie Mae, respectively. Even more new costs may come with Federal Reserve rules that go into effect April 18. Although the rules pertain to lenders, brokers warn that the regulations would lead to increased mortgage costs for consumers. Then in July, the Consumer Financial Protection Bureau begins its examination of how lenders disclose interest rates and closing costs to borrowers. Any costs arising from changes in current practices will likely be passed on to home buyers.

On top of all this are the Obama administration’s mortgage reform goals. Borrowers can expect more restrictions on down payments, FHA loans and loan limits. In certain parts of the country, these changes could make owning a home more difficult for consumers who rely on FHA loans. “Clearly the credit box has gotten incredibly tight. We are seeing lenders who have increased and are very stringent in their underwriting standards,” said John Courson, president and chief executive officer of the Mortgage Bankers Association, the mortgage industry’s main trade group.

Also part of the mortgage reform strategy are federal and state investigations into unscrupulous mortgage and foreclosure practices. A number of big banks, among them Bank of America, Citigroup and Wells Fargo, have already alerted their investors that significant financial penalties are expected. In a statement, Bank of America said the inquiries “could result in material fines, penalties, equitable remedies (including requiring default servicing or other process changes), or other enforcement actions, and result in significant legal costs.” The uncertainties attached to mortgage reform could translate into higher interest rates for consumers.

Industry experts say all these factors will inevitably lead to mortgage prices varying much more than usual. Plus, as the economy improves, mortgage rates are expected to edge up accordingly. As a result, consumers will need to be more aggressive in finding the best mortgage rates. “As the economy finds firmer footing, so will mortgage rates. After being pressed to 56-plus-year lows in 2010 by various crises, deflation concerns and government manipulation, we may see a bit of the other side of the coin in 2011,” said Gumbinger of HSH. So for those considering a new home or refinancing, the next few months offer better mortgage options than what’s in store for the future.

Why Is My Paycheck Higher?  You may have noticed that your first paycheck in January was a little bit higher.  In case you didn’t ask because you were afraid you’d have to repay a mistake, relax.  As part of the tax-cut extension signed in December 2010, your FICA payroll tax is reduced by two percentage points (your employer still gets to pay the old rate, though).  That means more take-home pay for you to stimulate the economy with.  Just remember that the tax holiday is set to expire at the end of this year.

A Penny More a Mile.  The IRS changed the rate for business mileage to 51 cents per mile, up from 50 cents in 2010.  Mileage for moving or medical expenses is 19 cents per mile, up from 16.5 cents last year.  Charitable mileage is unchanged at 14 cents per mile.  These rates are intended to echo the changes in gas prices.  In the past the IRS has raised these rates mid-year when gas prices have spiked, so if gas prices continue their upward trend, they may go up – but don’t count on it).

No More Aspirin for Your FSA.  If you have a flexible spending account, such as a Health Savings Account (HSA) or Health Reimbursement Account (HRA), you can no longer claim over-the-counter medications as reimbursable expenses under those plans.  If you’re like most people, you won’t miss this change; a 2010 Hewitt Associates survey found that only 7% of claims involved OTC medications. 

Don’t Spend it All in One Place.  The “gimmes” you get on your tax return – the standard deduction and personal exemption that you get to take no matter what – aren’t much changed in 2011.  The personal exemption is now $3,700, up from $3,650.  Standard deductions for single and married-filing-separately taxpayers is $5,800 (up from $5,700), married-filing-jointly is now $11,600 (up from $11,400), and head-of-household filers get $8,500 (up from $8,400). Hey, it’s not much, but we’ll take it.

Tax on My Health Insurance? As soon as the new health care law was passed in 2010, rumors began to swirl that workers would have to pay tax on employer-provided health insurance premiums.  Well, in case you didn’t hear the truth on that one, relax; it isn’t true.  Starting in 2011, employers will have to report the amount of premiums for health insurance provided to employees on their Forms W-2, but it will be an informational item only and won’t increase your taxable income.  Since the new law calls for penalties on those who don’t carry health insurance, and special taxes on “Cadillac” health care plans offered to employees, the informational requirement is intended to help the IRS enforce those provisions.  But it won’t be taxable to you.

Since you’re probably still working on your 2010 income tax return, these new changes may not be much on your mind, but they’ll affect your take home pay and your Form 1040 for next year.  As always, if you’ve got a unique situation and aren’t sure what this means to you, check with a tax adviser.

Unfortunately, not all areas covered in the report are experiencing such promising numbers. While month-to-month sales volume tripled in the Venice area from March to April of this year, median sale prices in the Wilshire and Silver Lake – Echo Park areas were down $87,500 and $52,500 respectively. Of course, this could all be chalked up to the location. Well-known, high-end areas like Beverly Hills are always in demand, and with the struggling dollar and strong Euro, 90210 has become a particularly attractive zip code to foreign buyers.

Nonetheless, new construction in the area has slowed and lenders are still more stringent than ever in their qualification requirements.

Could prospering markets in certain areas of Beverly Hills be a sign of things to come for the rest of the real estate market? Possibly, but it may be too early to say for sure.