You may ask why the Wingtip Report? Fannie Mae and Freddie Mac provide similar services and similarly silly names. Why? Perhaps a mystery for the ages. I have some theories.
1. A drunken campfire bet gone horribly overboard
2. Childhood name mocking resulted in a psychological syndrome we’ll call Lowhousingcost Consciousness
3. Coincidence
Once again our favorite friend-to-the-people-other-than-Eva-Peron, Mr. Developer, is here to provide downtown LA insider-sight (my word).
Q: Mr. Developer, even the reduced LA housing prices are extortionately high in the 213. How can I pauperize a purchase price, enabling this average Joe/Jolene to get into the game?
A: Downtown condos priced below $500K are becoming more prevalent in our sagging market. By borrowing $417,000 or less, a buyer enables mortgage backers such as Fannie Mae or Freddie Mac to package and sell the loan resulting in an interest rate as low as 5.75%.
Loans above $417,000 are not as desirable to investors in these credit-crunching times, causing interest rates to rise as high as 7%.
Upon closer inspection:
$417,000 x 5.75% = $2433/month and $875,880 over 30 years
$418,000 x 7% = $2780/month and $1,000,800 over 30 years
Reducing that note could create a minimum savings of $347/month and $124,920 over 30 years.
Amazing! Thank you, Mr. Developer. Oh, by the way, may I please borrow $417,000?
Photo thanks to Luma
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1 response so far ↓
1 Nora // Jan 22, 2008 at 2:15 pm
i like your voice…funny : )
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