A friend informs me that this amount to a $108,000 discount for Obama, throughout the life of the loan.
Is his math correct?
Abuse of power?
Alan Colmes will defend this as “Don’t all politicians do this?”
He says that every time. Newsflash Alan! That doesn’t make it right!!
http://www.washingtonpost.com/wp-dyn/content/article/2008/07/01/AR2008070103008.html?hpid=topnews
Obama paid no origination fee or discount points, as some consumers do to reduce their interest rates.
http://www.washingtonpost.com/wp-dyn/content/article/2008/07/01/AR2008070103008_2.html?hpid=topnews
The Obamas had no prior relationship with Northern Trust when they applied for the loan. They received an oral commitment on Feb. 4, 2005, and locked in the rate of 5.625 percent, the campaign said. On that date, HSH data show, the average rate in Chicago for a 30-year fixed-rate jumbo loan with no points was about 5.94 percent.
Jumbo loans are for amounts up to $650,000, but the Obamas’ $1.32 million loan was so large that few comparables are available. Mortgage specialists say that many high-end buyers pay cash.
The article says that the special interest rate Obama received would save him $300 per month over a 30 year loan. Base on the assumptions in the article $108,000 would be correct.
Is his math correct?
Yes. The article says he saved about $300 per month, which works out to $3,600/yr. Multiply that by the 30 years of the mortgage and you get $108,000.
The joke is that's what i owe for my whole entire house. No respect for us little people
On the math, here’s how your friend got there:
If he saved $300/mo by the discount, and the loan was for 30 years, then:
Assuming he paid out over 30 years (Definitely an assumption, because he could’ve paid off or sold the property at any time...):
30 years x 12 months = 360 mos.
360 mos. x $300 = $108,000