Skip to comments.A fading middle-class perk: lower mortgage rates
Posted on 04/25/2014 9:25:04 AM PDT by Olog-hai
For three decades, the U.S. middle class enjoyed a rare financial advantage over the wealthy: lower mortgage rates.
Now, even that perk is fading away.
Most ordinary homebuyers are paying the same or higher rates than the fortunate few who can afford much more.
Rates for a conventional 30-year fixed mortgage are averaging 4.48 percent, according to Bankrate. For jumbo mortgagesthose above $417,000 in much of the countrythe average is 4.47 percent.
(Excerpt) Read more at hosted.ap.org ...
Now I get it. Your level of wealth is determined by how much you spend on a house!
Wholesale always costs less than retail.
I wonder how much effort the MSM will put into trying to get the LIV population riled up over a difference of 0.01% (one part in ten thousand).
On a loan amount of $165K, 30 years, the difference between a rate of 5.00% and 5.01% is $1.01 per month.
Meantime, the tax rate on a $200K house (for which one would have to borrow the $165K after a 15% down payment) would be about $800 per month.
So an LIV is supposed to get irate about $1 per month he gets “stung” for against a “rich guy,” but about the $800 per month his local politicians take to buy votes, he’s supposed to say “oh well, that’s life.”
The real rate isn’t changing. Inflation is rising.
Precisely, taxes are driving people out of their homes.
Yellen’s Fed at work already, then? Wonder how they can spin this to blame “the GOP” or “the conservatives” who have nothing to do with it . . .
People are complaining about one-hundredth of one percent? Get back to me when we hit those high-teens double-digit interest rates that highlighted the Carter administration.
>>People are complaining about one-hundredth of one percent? Get back to me when we hit those high-teens double-digit interest rates that highlighted the Carter administration.<<
I was thinking the same. Up until about 10 years ago, you were lucky to get a rate below 8%! And, I remember a friend of mine bought his house with a 14% loan in the late 70s.
This is a bunch “the sky is falling” nonsense about nothing.
There’s something to be said about having a couple hundred thousand in a 3-4% mortgage when the inflation rate is 4-5%.
You think the banks would start screaming to Congress if they had a huge portfolio of 3% mortgages and inflation went up to 15%? Contracts are not sacrosanct anymore.
I can see a letter in the mail...
“Due to rising inflation, your rate will now be adjusted to the inflation rate + your previous mortgage rate.”
Yup. That scenario is entirely plausible.
Because it wouldn’t be fair for a “small” number of people to benefit when everyone else is suffering. It would require and act of Congress - the Mortgage Fairness Act of 2017.
Our first home in 1987 we paid 10%. Now we are paying somewhere around 3.5% on a 10 year note. That’s less than what my parents paid in 1962. But every hike will drive buyers out of the market and lower demand.
“Meantime, the tax rate on a $200K house (for which one would have to borrow the $165K after a 15% down payment) would be about $800 per month.”
WOW, those are some beefy tax rates!
That’s very true...........but I can’t figure what it means. What happens when someone or a group is forced to sell due to overly high property taxes? Are they forced to sell at a loss? Does it mean that home values in the area begin to decline due to distress sales?
If you are middle-class, there is a 50-50 chance your mortgage will be a jumbo loan. So once again the AP misses the point.
In today’s world all they have to do is make the accusation and that’s enough for most idiots in this country. They will accept it as gospel.
To some, appearances are everything, and debt, nothing. To others, lower taxes and other costs are very important. Want to look rich? Get a big loan. Want to get rich? Learn to build a tiny, efficient house where property taxes are very low and lots, cheap. Then do it, no matter how long it takes.
Smaller classes in St. Paul schools mean less room for diversity
now they’ll need a new reason to jack up property taxes
Upstate New York, I should have stated.
More than $10K/yr on a $250K house.
Perhaps my math was a little off. More like $675/mo on a $200K house.
Our first house was financed at 14%. Was in it 4 years and sold it and bought another. We got a special loan and financed it at 7.5 and were blissful about it.