May 1st - better credit? Pay more.

[kwillia]

Experts believe that borrowers with a credit score of about 680 would pay around $40 more per month on a $400,000 mortgage under rules from the Federal Housing Finance Agency that go into effect May 1, costs that will help subsidize people with lower credit ratings also looking for a mortgage, according to a Washington Times report Tuesday.

Biden rule will redistribute high-risk loan costs to homeowners with good credit

A new federal rule will make borrowing for a home more expensive for those with high credit scores to subsidize loans to higher-risk borrowers.

www.foxnews.com

Under the new rules, consumers with lower credit ratings and less money for a down payment would qualify for better mortgage rates than they otherwise would have.

 

[OccamsRazor]

Riddle me this Batman...
How is someone who is deemed "credit worthy" paying extra money per month on a mortgage going to improve or ensure that payments will be made by someone who has a lower credit score or is otherwise deemed "not credit worthy?"
That is like Walmart charging me extra money for a TV to ensure that someone else won't steal one! Idiocity!!

 

[Sneakers]

Riddle me this Batman...
How is someone who is deemed "credit worthy" paying extra money per month on a mortgage going to improve or ensure that payments will be made by someone who has a lower credit score or is otherwise deemed "not credit worthy?"
That is like Walmart charging me extra money for a TV to ensure that someone else won't steal one! Idiocity!!

Because......socialism.

 

[GURPS]

That is like Walmart charging me extra money for a TV to ensure that someone else won't steal one! Idiocity!!

No your extra money goes to a lower price for them

 

[Hijinx]

That is like Walmart charging me extra money for a TV to ensure that someone else won't steal one! Idiocity!!

That is exactly what is happening. No matter what you buy at Walmart or any other big box store you are subsidizing theft.

 

[Kyle]

That is exactly what is happening. No matter what you buy at Walmart or any other big box store you are subsidizing theft.

I subsidize it twice a month in my paycheck. Federal and State.

 

[kwillia]

California is pushing through new legislation to determine the cost of utilities based on household income. The more you make, the higher your rate so those who make less can pay less.

 

[Dakota]

Experts believe that borrowers with a credit score of about 680 would pay around $40 more per month on a $400,000 mortgage under rules from the Federal Housing Finance Agency that go into effect May 1, costs that will help subsidize people with lower credit ratings also looking for a mortgage, according to a Washington Times report Tuesday.

Biden rule will redistribute high-risk loan costs to homeowners with good credit

A new federal rule will make borrowing for a home more expensive for those with high credit scores to subsidize loans to higher-risk borrowers.

www.foxnews.com

Under the new rules, consumers with lower credit ratings and less money for a down payment would qualify for better mortgage rates than they otherwise would have.

well that is some outright bs.

When I decided to retire, I did a spreadsheet. I compared my salary vs. pension and opted to retire. I was working to do nothing else but pay taxes. These kinds of shenanigans will encourage people to do the same and/or revert back to a 1 income household. Your income shouldn't feel like a continual punishment for success. I was making only $40.00 a month to work, now granted, I had 33 years and supplemental plan contributions but still. It wasn't worth it.

 

[OccamsRazor]

These kinds of shenanigans will encourage people to do the same and/or revert back to a 1 income household. Your income shouldn't feel like a continual punishment for success.

I wouldn't be surprised (about others) but, would you assume that someone would intentionally damage their credit score to qualify also?

 

[PrchJrkr]

I wouldn't be surprised (about others) but, would you assume that someone would intentionally damage their credit score to qualify also?

Of course. Where there's money to be made, you will find someone that figures out a way to game the system.

 

[Tilted]

Riddle me this Batman...
How is someone who is deemed "credit worthy" paying extra money per month on a mortgage going to improve or ensure that payments will be made by someone who has a lower credit score or is otherwise deemed "not credit worthy?"
That is like Walmart charging me extra money for a TV to ensure that someone else won't steal one! Idiocity!!

The rate changes aren't supposed to ensure that higher risk borrowers make their payments. The rate changes are supposed to shift the costs of insuring mortgages such that people with lower risk mortgages pay more (than they otherwise would have) and people with higher risk mortgages pay less (than they otherwise would have).

It's conceptually comparable to raising the auto insurance premiums of 40 year olds with no accidents from $1,000 a year to $1,100 a year so that you can lower the auto insurance premiums of 18 year olds with 3 accidents from $4,000 a year to $3,000 a year. Ostensibly both groups will, respectively, create roughly the same amount of claim liability as before. And the total premiums collected will, ostensibly, remain roughly the same. But the first group now bears a larger relative share of the insurance cost. If the premiums were fairly set before - i.e., they accurately reflected the risks of the respective groups - then the changes amount to forcing the former group to subsidize insurance costs for the latter group.

 

[Tilted]

I wouldn't be surprised (about others) but, would you assume that someone would intentionally damage their credit score to qualify also?

In doing so they'd still be increasing their own mortgage costs. It's just that, with these rate changes, the additional amount they'd have to pay (because they, e.g., had lower credit scores or smaller down payments) wouldn't be as much.

The LLPA rate curve isn't being inverted; it's being flattened. You're still generally better off (when it comes to effective rates) having better credit and/or a larger down payment.

 

[ArkRescue]

Of course. Where there's money to be made, you will find someone that figures out a way to game the system.

you've got that right and there are people who are experts on how to get free stuff - makes me sick that I work hard while others use their brainpower to scam others to get benefits the rest of us work for.

 

[ArkRescue]

Since when is 680 a good credit score? I thought it was 750-850?

 

[OccamsRazor]

The LLPA rate curve isn't being inverted; it's being flattened. You're still generally better off (when it comes to effective rates) having better credit and/or a larger down payment.

Very good explanations. It is appreciated.
The bottom line is this. Would I (having and earning a great credit score and shopping wisely for a new home) be paying MORE with this program than I would without it?
If the answer is YES, justifying it by saying it helps those that have not worked as hard for a good credit score or did not do their due diligence in the process is nothing more than wealth re-distribution = SOCIALISM.

 

[OccamsRazor]

Since when is 680 a good credit score? I thought it was 750-850?

Actually, according to credit reporting agencies, 650-800 is considered Good to Very Good. 800-850 is considered Exceptional.

 

[CPUSA]

I wouldn't be surprised (about others) but, would you assume that someone would intentionally damage their credit score to qualify also?

I wouldn't call it an assumption. More like, a guaranteed outcome, based on past observances....

And I only observed it from one particular demographic...they prefer to work 4 days a week,... "because that 5th day goes to Uncle Sam"
And I'm using the quotes because...it's the actual statement from...one particular demographic.

 

[Tilted]

Since when is 680 a good credit score? I thought it was 750-850?

It isn't, really. But 680 is a bit of an inflection point when it comes to the matrices that determine the LLPA rate. How (and how much) this change affects people depends on a number of factors, but generally speaking it means that people at or above 680 will pay more and people below 680 will pay less (than they would have before the change).

The rate changes are a mixed bag. In some case, people with a higher credit score (760 and above) or larger down payment actually benefit. But generally speaking it's people with lower credit scores that benefit.

 

[Kyle]

I wouldn't call it an assumption. More like, a guaranteed outcome, based on past observances....

And I only observed it from one particular demographic...they prefer to work 4 days a week,... "because that 5th day goes to Uncle Sam"
And I'm using the quotes because...it's the actual statement from...one particular demographic.

Pontificating over a paper-bag wrapped bottle of Knotty Head, after cashing their paycheck at the liquor store, no doubt.

 

[Kyle]

But generally speaking it's people with lower credit scores that benefit.

Now I can stop paying my bills and let a couple things go to collections so I can benefit from this new program.