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(CNN)   Thanks to government programs, rich people are now getting lower mortgage rates than you   (money.cnn.com) divider line 114
    More: Stupid, TD Bank, mortgages, bank charge, loan officer, jumbo loans, Federal Housing Finance Agency  
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6145 clicks; posted to Main » on 12 Nov 2013 at 12:54 PM (46 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-11-12 12:33:14 PM
Meh.  I'm already subsidizing the insurance on their beach mansions here in Florida.
 
2013-11-12 12:55:17 PM
My mortgage rate is %0.0, I pay double mortgage payments bi-monthly twice every month, and I pay cash for everything, even things that are free.

I attained this level of financial freedom by employing a strategy that involves a simple system of ropes, pulleys, and envelopes that I learned from Dave Ramsey. The trick is, you put all your money in an envelope, and then write "DON'T SPEND, HAUNTED" on it, and then run it up a tree.

I've got things pretty much figured out. I feel sorry for the rest of you.
 
2013-11-12 12:56:08 PM
Your mom made you get a loan?
 
2013-11-12 12:58:31 PM

sigdiamond2000: My mortgage rate is %0.0, I pay double mortgage payments bi-monthly twice every month, and I pay cash for everything, even things that are free.

I attained this level of financial freedom by employing a strategy that involves a simple system of ropes, pulleys, and envelopes that I learned from Dave Ramsey. The trick is, you put all your money in an envelope, and then write "DON'T SPEND, HAUNTED" on it, and then run it up a tree.

I've got things pretty much figured out. I feel sorry for the rest of you.


My wife and I only have mortgage loans where the mortgage companies pay *us* for the privilege of having us as customers, because, frankly, we're better than you people.

I also don't own a TeeVee and I use a non-ironic rotary phone.

Pretty much King Sh*T of F*ck Island over here.
 
2013-11-12 12:58:45 PM

sigdiamond2000: My mortgage rate is %0.0, I pay double mortgage payments bi-monthly twice every month, and I pay cash for everything, even things that are free.

I attained this level of financial freedom by employing a strategy that involves a simple system of ropes, pulleys, and envelopes that I learned from Dave Ramsey. The trick is, you put all your money in an envelope, and then write "DON'T SPEND, HAUNTED" on it, and then run it up a tree.

I've got things pretty much figured out. I feel sorry for the rest of you.


wow, we read the same book.
 
2013-11-12 01:00:02 PM
I'm locked at 4%.

Eat it, subtard.
 
2013-11-12 01:00:12 PM

sigdiamond2000: My mortgage rate is %0.0, I pay double mortgage payments bi-monthly twice every month, and I pay cash for everything, even things that are free.

I attained this level of financial freedom by employing a strategy that involves a simple system of ropes, pulleys, and envelopes that I learned from Dave Ramsey. The trick is, you put all your money in an envelope, and then write "DON'T SPEND, HAUNTED" on it, and then run it up a tree.

I've got things pretty much figured out. I feel sorry for the rest of you.


+1
 
2013-11-12 01:00:32 PM
For the tldr folks:

Government programs help make loans available where they otherwise wouldn't be, and there are some fees associated with that. Those fees do not apply to loans that the government programs don't involve themselves with, and as such the loans will be cheaper if they have the same interest rate.

Further, private banks make a decision to lower the rates on jumbo loans in order to snag wealthy people into their banking web where they can sell them other products and services.


Big farking Deal.
 
2013-11-12 01:00:41 PM

ChipNASA: Pretty much King Sh*T of F*ck Island over here.


All these F*cks are yours except F*ck Mountain. Attempt no landing there.
 
2013-11-12 01:00:47 PM
Rich people have suffered enough in the Great Recession.

It's time the had things easy for a bit.
 
2013-11-12 01:01:16 PM

sigdiamond2000: ChipNASA: Pretty much King Sh*T of F*ck Island over here.

All these F*cks are yours except F*ck Mountain. Attempt no landing there.


Nice....LMFAO
 
2013-11-12 01:01:28 PM

mainstreet62: I'm locked at 4%.

Eat it, subtard.


3.46% with a Tennessee First-time home buyer's subsidy. Bought for 1/2 property value during the foreclosure crisis.

Of course, I also have pretty good credit. (Somehow.)
 
2013-11-12 01:03:40 PM
Just sounds like quantity discount to me?
 
2013-11-12 01:04:19 PM
Thanks to government programs, many people are able to purchase homes in the first place. Consider that there are currently hundreds of thousands of homes available/vacant, but there is a shortage in availability. Two of the major contributors to this limited availability are Fannie Mae and Freddie Mac, who control many of these homes, but are siphoning very few homes to the market. This, in turn, has led to the increase in property values in more viable markets (like CA), as people have begun to re-enter the housing market. Many home buyers, still hurting from a loss in savings/retirement, are using programs such as VA loans and FHA to reduce the out of pocket expense. Qualifying for these loans is not nearly as easy as it was during the bubble so, theoretically, there should be vastly fewer defaults.

In other words, the government is not all bad in the housing industry.

In terms of lending money to rich people for better terms...duh. They have greater reserves to ensure repayment.
 
2013-11-12 01:04:21 PM
Rich people don't have mortgages.
 
2013-11-12 01:04:40 PM
Governments are great. You poor people should think about buying one. Sure, you might not be able to afford a whole one right off the bat, but if you start small, buy a representative here, a senator there, eventually you'll get there. And don't think you can't afford one. Politicians are notorious pikers. You just need to have some discipline. When you see a new car you like, or even when you buy your daily cup of coffee at Starbucks, just ask yourself, "Could this money be better spent on a bribe?" That's how rich people think, and that's how you should think, too.
 
2013-11-12 01:05:05 PM
Did anybody notice that was really more of an infomercial than an article?
 
2013-11-12 01:05:19 PM
Came here to be mad, but it's just typical business. Banks want to keep wealthier clients around, nothing new there.

sigdiamond2000: My mortgage rate is %0.0, I pay double mortgage payments bi-monthly twice every month, and I pay cash for everything, even things that are free.

I attained this level of financial freedom by employing a strategy that involves a simple system of ropes, pulleys, and envelopes that I learned from Dave Ramsey. The trick is, you put all your money in an envelope, and then write "DON'T SPEND, HAUNTED" on it, and then run it up a tree.

I've got things pretty much figured out. I feel sorry for the rest of you.



Don't worry. Once day you will graduate from Dave Ramsey and start taking advantage of truly intelligent money management.

Paying cash is only good for people that are either too stupid to avoid paying interest or simply can't avoid it.

0% loan for an auto? Paying cash leaves money on the table
Paying cash instead of using a CC? Those points really add up.

/The only interest I pay is 2% on my undergrad student loan and about 3% on my mortgage. Both are much lower than the return I receive on my investments.
 
2013-11-12 01:06:07 PM

big pig peaches: Rich people don't have mortgages.


Thats true the Headline says rich but they actually mean High Cash Flow,  which doesn't actually mean High Net Worth.
 
2013-11-12 01:06:57 PM
Aren't jumbo loans the ones that can balloon out of control as opposed to the fixed rates which are well...fixed?
 
2013-11-12 01:07:06 PM
Jumbo loans are not government programs, jackhole.
 
2013-11-12 01:07:10 PM
nocturnal001:
sigdiamond2000: My mortgage rate is %0.0, I pay double mortgage payments bi-monthly twice every month, and I pay cash for everything, even things that are free.

I attained this level of financial freedom by employing a strategy that involves a simple system of ropes,


I know this was satire, but my response didn't comeacross as recognizing that.
 
2013-11-12 01:07:16 PM
Wouldn't rich people have better credit scores, and thus get lower rates anyway?
 
2013-11-12 01:07:24 PM

sigdiamond2000: My mortgage rate is %0.0, I pay double mortgage payments bi-monthly twice every month, and I pay cash for everything, even things that are free.

I attained this level of financial freedom by employing a strategy that involves a simple system of ropes, pulleys, and envelopes that I learned from Dave Ramsey. The trick is, you put all your money in an envelope, and then write "DON'T SPEND, HAUNTED" on it, and then run it up a tree.

I've got things pretty much figured out. I feel sorry for the rest of you.


Where did you say this tree was?

/I knew climbing trees as a kid had to come in handy one day
 
2013-11-12 01:07:34 PM
If you need a mortgage to buy your McMansion you are definitely NOT rich.
 
2013-11-12 01:07:57 PM
My neighbors got me to call the bank this summer when rates hit rock bottom and I locked in a fixed at 3.5%.  Talk about unexpected good fortune.
 
2013-11-12 01:09:40 PM
Just to throw a bucket of cold water on your conspiracy theories:

Aren't the interest rates on loans at least partially based on your ability to pay?  Yes, first they go borrow the money they're going to lend to you from the Fed, so the interest rate floors out at their own borrowing rate.

That's what credit rating are about.  The bankers are hoping that your past borrowing and repaying history will be a predictor of your future borrowing and repaying behavior.

Another factor is how much tangible assets the borrower has that could be repossessed in the case of a default.

I'm going to go out on a limb and say that rich people score really well on all those factors, and yes, that would support a lower interest rate.
 
2013-11-12 01:09:49 PM

mainstreet62: I'm locked at 4%.

Eat it, subtard.


Locked at 3.8 you eat it bucko!
 
2013-11-12 01:10:22 PM

hardinparamedic: mainstreet62: I'm locked at 4%.

Eat it, subtard.

3.46% with a Tennessee First-time home buyer's subsidy. Bought for 1/2 property value during the foreclosure crisis.

Of course, I also have pretty good credit. (Somehow.)


Nice.

My wife and I didn't buy at the absolute bottom in terms of interest rates, but we did get a home we liked for a good price in New York last June, about 45 minutes outside NYC.

We both had 800+ credit ratings across the board.

Only bad things about New York are the property and school taxes, they're a little high. But we live in a great school district.
 
2013-11-12 01:11:04 PM

DeathCipris: Aren't jumbo loans the ones that can balloon out of control as opposed to the fixed rates which are well...fixed?


Ah, I stand corrected. Jumbo loans are just above the limit, however, they are not innocent in the housing collapse. Lenders were lumping jumbo loans in with variable interest rates an all sorts of other craziness that people couldn't afford.
 
2013-11-12 01:11:09 PM
The higher your risk of default, the higher your rate?

Thanks for the insight, Romero.
 
2013-11-12 01:12:31 PM

big pig peaches: Rich people don't have mortgages.


Lol, mortgage interest deduction
 
2013-11-12 01:13:02 PM

mainstreet62: I'm locked at 4%.


hardinparamedic: 3.46% with a Tennessee First-time home buyer's subsidy



Carn: locked in a fixed at 3.5%.


3.375%   Deal with it.

It's like free money at this point.  Although I do admit, it sucks for the retired folk who may depend on interest returned.
 
2013-11-12 01:13:52 PM

hardinparamedic: 3.46% with a Tennessee First-time home buyer's subsidy. Bought for 1/2 property value during the foreclosure crisis.

Of course, I also have pretty good credit.



How much ya bench?
 
GBB
2013-11-12 01:14:00 PM

sigdiamond2000: My mortgage rate is %0.0, I pay double mortgage payments bi-monthly twice every month, and I pay cash for everything, even things that are free.

I attained this level of financial freedom by employing a strategy that involves a simple system of ropes, pulleys, and envelopes that I learned from Dave Ramsey. The trick is, you put all your money in an envelope, and then write "DON'T SPEND, HAUNTED" on it, and then run it up a tree.

I've got things pretty much figured out. I feel sorry for the rest of you.


Well, when you win the lottery with numbers you got from a crazy guy, that money may just be haunted.
 
2013-11-12 01:14:05 PM

DeathCipris: Aren't jumbo loans the ones that can balloon out of control as opposed to the fixed rates which are well...fixed?


It means more money loaned. I think a jumbo is around a a 900k loan. You can still get fixed rates.
 
2013-11-12 01:14:20 PM

Armand Tanzarian: big pig peaches: Rich people don't have mortgages.

Lol, mortgage interest deduction


LOL rich people can't take the mortgage interest deduction.
 
2013-11-12 01:14:52 PM
since when do the "rich" live in homes with $418k loans?  It's sortof a hard metric for which to find good data, but the average price of houses actually sold last quarter was >$325k, and I'd suspect to find $418k loans (ie, $520k houses) at about the 60% mark...are we just dividing "rich" as the top half, and "poor" as the bottom half, now?  Despite the fact that even though I'm in top single digits for income, I make absolutely nothing compared to the top 1%?  Since when did we eliminate the middle?
 
2013-11-12 01:15:48 PM
In before humble braggers... dang.
 
2013-11-12 01:15:51 PM
blogs.rep-am.com

/shocked
 
2013-11-12 01:16:02 PM

Arkanaut: Wouldn't rich people have better credit scores, and thus get lower rates anyway?


It was supposed to be that larger loans carried higher risks, so it required a higher rate as a jumbo mortgage than a regular one. Now these banks are coddling their wealthy customers at the expense of their poor customers (e.g. ATM Fees (eliminated with high capital deposit accounts), Credit Card rates, elimination of small fixed rate unsecured loans (in favor of credit cards), increased pushes for foreclosures (yet doing nothing with the properties they now own), etc); the best thing you can do is get out now and go to small banks and/or credit unions that actually do care for your business.
 
2013-11-12 01:16:20 PM
You mean people that know how to manage money are seen as a lower risk for defaulting on a loan and given a better rate?  Someone wake Ric Romero!
 
2013-11-12 01:16:24 PM

Gentoolive: mainstreet62: I'm locked at 4%.

Eat it, subtard.

Locked at 3.8 you eat it bucko!


I rent an apartment. My mortgage costs are infinitely smaller than yours. Both of you can eat it.
 
2013-11-12 01:17:11 PM
Headline: Thanks to government programs, rich people are now getting lower mortgage rates than you

Article: Banks are giving unusually low rates to rich people on certain loan types to try and attract their business

Tag: must apply to the submitter

/ my mortgage is 3.65% on a 15 year loan which I've paid an extra year on so far on top of the regular payments
// but, then, I also didn't buy a very expensive house and my income went up substantially after I bought it when I changed jobs
 
2013-11-12 01:17:43 PM
Why it's almost as if banks are willing to charge a lower interest rate on larger amounts of money. Whodathunkit?
 
2013-11-12 01:19:04 PM
One big reason jumbo rates are so low is because lenders want to attract wealthy clients and hang on to them, said Malcolm Hollensteiner, head of consumer lending for TD Bank. Once clients sign up for a mortgage, the bank can "cross sell them other products, like brokerage services," he said.

Sounds like this a business practice to lure rich people and cross-sell them other financial products that will make up for the lower mortgage rates.  Not sure what government program this is.

As with any product offered by a financial institution, investment company or bank, they offer cheaper rates for products if you have boatloads of money.  They very aggressively pursue high net worth customers.
 
2013-11-12 01:20:50 PM
So...am I supposed to be outraged that low interest jumbo loans on $700,000 dollar houses aren't be offered to poor people? (And Wasn't that called "predatory lending" back when they did that stuff?)

Tag is for submitter, right?
 
2013-11-12 01:23:15 PM

TheSwizz: mainstreet62: I'm locked at 4%.

hardinparamedic: 3.46% with a Tennessee First-time home buyer's subsidy


Carn: locked in a fixed at 3.5%.

3.375%   Deal with it.

It's like free money at this point.  Although I do admit, it sucks for the retired folk who may depend on interest returned.


Nothin to deal with my man.  My payments dropped nearly $500 a month (interest difference plus no more PMI).  It was like getting a huge raise.  High fives for low rates.
 
2013-11-12 01:23:19 PM
Taking out a 30 year mortgage on your McMansion does not equal rich. I know a guy who pays $10,000/month on his house. He makes a lot of money, but if he lost his job, he'd be farked. You are rich when you can write a check for your McMansion.

/I'm locked in at 3.725% on a 15 year mortgage.
//not buying a house that ties up 50%-75% of your monthly income helps.
///I just want the damn thing paid off
 
TWX
2013-11-12 01:23:30 PM

QFarker: If you need a mortgage to buy your McMansion you are definitely NOT rich.


This is true, however, if one either wants to maintain a good credit score for the long-term, or wants to keep as much money as liquid as possible, this helps.

I could have paid cash for my most recent vehicle purchase, but chose to borrow because it was only going to cost me about $400 over the cash price over the duration of the loan. That's a very small price to pay for keeping five figures' cash in the bank.
 
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