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The New Rules of Borrowing for Homes, Autos and College
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Annamaria Andriotis does enormous service to millions of borrowers for student loans by putting down in simple payments terms everybody can understand the approach to take for a university education. She points out the pitfalls in taking federal loans and following the advice of the student loan office. The federal student loans have an origination fee of about 4.2%, so even if you pay off the loan early you are stuck with the origination cost, which private lenders such as major banks do not normally charge. On a $100,000 loan this could be $4200 right off the beginning, reducing the loan to $95,800. Private lenders offer fixed rates also at attractive terms of about 4%-4.25%, with added reduction of 0.25 to 0.5% for loans with automatic payment. The lenders include Wells Fargo, Suns Trust. It is important to have good credit ratings. Scores of over 700 or 720 in credit ratings provide the most attractive rates, yet a good credit rating is also acceptable. FICO scores range from 350 to 850 for credit ratings. Added reduction of quarter to half percentage point for automatic payment. A loan for $100,000 taken with Federal PLUS loan and government guarantees could run 7.21% for fixed rate. Andriotis points out that compared to the $4586 payment on a $100,000 student fixed rate private loan at 4.25% for 10 years, a federal guaranteed PLUS loan at fixed rate of 7.21% for 10 years would cost $3541 more over the life of the loan. Mortgage loans for 30 year fixed rate jumbo loan is about 4.14%. In September 2014, the rates for jumbo mortgage loans offered by private banks are now converging at the 4.18% for conventional mortgage loans. For auto loans zero percent financing from auto company lenders such as Toyota Financial are a better option. Rates of 2% on auto loans may be available from private banks and credit unions. SunTrust Banks has an online lending division LightStream that is offering personal loans to borrowers having good credit ratings scores, with interest rates of as low as 1.99%. The borrowers with excellent scores can get the unsecured option at the best rate of 1.99%. Credit unions are offering lower auto loan rates of 2.64% and 2.74% compared to banks charging average of 4.79% and 4.9%, according to data from SNL Financial. Millions of borrowers with good credit ratings, especially for student loans, need to start early in checking out the rates and shopping for the best rate. A good credit rating of parents can enable a student to make a huge difference in payments for undergraduate or postgraduate education, and avoid the unnecessary burden of high interest rate loans in a low interest rate environment.
How to get the best rate for auto loans (around 0-2%), home mortgage loans (around 4%), and student loans (around 4%) in 2014-2015
09/13/2014
How to avoid paying high interest rates for loans in a low interest rate environment that the Federal Reserve has used to support banks and financial institutions, the housing industry, and other financial market sectors. Careful shopping and having a good credit record is needed to do this.
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The New Rules of Borrowing for Homes, Autos and College
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Decline in U.S. home loans for mortages in April 2014 as 30 year mortgage rate reach 4.49% on April 18, 2014
04/25/2014
Higher U.S. mortgage loan rates lead to a decline in the home loan applications index to 354 and morgage loan originations for the 1st quarter 2014 to $235 billion, according to the Mortgage Bankers Association. Housing will not contribute much to U.S. GDP growth in this situation.
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Home Prices Start Easing, to the Relief of Experts
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U.S. Economic Recovery Looks Distant as Growth Stalls
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The New Rules of Borrowing for Homes, Autos and College
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Student debt and the added burden it poses for the U.S. economy in 2012-2015
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The effects on new home purchases by younger buyers of first homes of the pile up of large student debt.
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High student debt is dragging down the U.S. economy | Wonkblog
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Car loans and the auto industry 2011-2014
08/14/2012
Automobile financing in the U.S. reached a new level in 2012 with a large increase in auto loans.
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The New Rules of Borrowing for Homes, Autos and College
Wall Street Journal 09/13/2014
Auto Sales Trends Echo Troubled Past
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U.S. car sales hit record high in 2015 - The Washington Post
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U.S. Car Sales Set Record in 2015
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Second-Lien Loans May Prompt New Losses for Banks
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The Sickness Beneath the Slump - Economic View
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Rates on U.S. student loans
05/21/2012
Grouped Articles
Congress Passes Bill on Highways, Student Loans and Flood Insurance
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College Tuition Increases Slow, but Government Aid Falls
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The New Rules of Borrowing for Homes, Autos and College
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Unknown 05/21/2012
Failure of U.S. colleges and universities to reduce costs and lower the tution burden
04/11/2011
An increasingly important issue as student debt passes $1 trillion inthe U.S. and hurts the economy
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Student Loan Debt Is a Drag on the Economy, Too
New York Times 05/10/2013
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Obama Wants College Aid Tied to Rating System
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New York Times 08/22/2013
College Tuition Increases Slow, but Government Aid Falls
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California College Chief Calls for Tuition Freeze
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Mian and Sufi show negative effects of the lack of a comprehensive plan that included homeowner rescue of the Obama-Bernanke Financial Rescue in 2008-2011
04/15/2009
Professors at Princeton and the University of Chicago have demonstrated through their research that the lack of a comprehensive plan providing siginificant efforts to help homeowners has hurt the U.S. economy in the long run and delayed a recovery. With the middle class already reeling under one trillion dollars of student debt, high unemployment, stagnant wages, and retirees facing interest rates near zero, a weakened middle class was further affected by the lack of strong efforts on the homeowner side to balance aid to banks. This makes a consumer driven recovery that much more difficult and prolongs the pain.
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The Case Against the Bernanke-Obama Financial Rescue
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The New Rules of Borrowing for Homes, Autos and College
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Student debt at $1 trillion in 2011 - a macroeconomic factor which determines consumer spending and buying of new homes
03/11/2009
Student debt in 2011 was 5 times the level in 2000. This happens as education and technical skills are increasing in importance in determining wages and benefits, higher education in increasingly becoming unaffordable, and government help is declining because of budget cutbacks. This is affecting the image of the U.S. as a nation of opportunity.
Grouped Articles
High student debt is dragging down the U.S. economy | Wonkblog
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U.S. Schools Chief Arne Duncan Labors to Straddle Political Divide
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New York Times 09/07/2013
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Upward Mobility Has Not Declined, Study Says
New York Times 01/23/2014
The huge turnaround in car loans and auto loan backed securities that is backing the recovery in U.S. auto sales in 2011-2013
01/02/2011
U.S. car sales are expected to be between 14 to 15 million in 2012. The recovery in auto sales is supported by a huge rebound in car loans and in the securities backed by car loans.
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U.S. June Auto Sales Keep Climbing
Wall Street Journal 07/02/2014
The New Rules of Borrowing for Homes, Autos and College
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U.S. Auto Sales Surge in December
Wall Street Journal 01/06/2015
U.S. Car Sales Set Record in 2015
Wall Street Journal 01/06/2016
Wall Street Journal 08/14/2012
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Student, auto, and home loans course 101
09/13/2014
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The New Rules of Borrowing for Homes, Autos and College
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