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Some Silicon Valley Tech Workers Get Home Loans with No Money Down

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Re: Some Silicon Valley Tech Workers Get Home Loans with No Money Down

#91

Post by lisper »

dimino wrote: post #77
lisper wrote: post #67

Earlier quoted context omitted.

You aren't writing checks. Send a Congressman $1000 (that's really all it takes to get their attention) and you'll be amazed how responsive they will come. Senators are a little more expensive, but still reasonably priced at $2-5k. Presidential candidates are in the low five digits.

Tech workers probably want to put that $1,000 into their homes, or into their kid's savings, or pay down some of that student loan debt. I'm a tech worker and I don't honestly see a near-term future where I would throw $2,000 at a senator to talk to them about, say, net neutrality. I've got all kinds of things I'm saving for! My boat isn't going to drain me of my earnings by itself!

Everyone needs to decide on their priorities in life. If you want political influence (or at least the illusion of political influence) you can have it for a pretty modest price.

If you want real political influence of the sort that will actually let you move the needle on something like net neutrality then you need to be writing much bigger checks. $1k will buy you half an hour on the phone will a congressman who will pretend to listen to you. But to actually influence policy you need budgets in the 6-7 digits because you have to repeat the process across many dozens of congressmen and senators.

Re: Some Silicon Valley Tech Workers Get Home Loans with No Money Down

#92

Post by compiler-guy »

elgabogringo wrote: post #5

How does it make sense to tie up $1M+ at 1%? Are they turning around and selling the note to Fannie or Ginnie Mae? Unless we are Japan (and that's a slight possibility, but not likely IMO) this will be a total loser - not as bad as buying Spanish/French/Italian debt at negative rates, but pretty bad. Who else has friends going through all sorts of ridiculous acrobatics to buy houses in the bay right now? Where they a…

I have a Silicon Valley loan that is at a rate probably near cost for the lending institution. I did put real money down though.

The big requirement for this loan was for me to move most of my banking to the institution, and to keep a minimum amount of assets with them. I generally like the institution, so the move hasn't been terrible.

So not only are they making interest on the loan, they also have my other business. I'm not super-high wealth (but I do pretty well), but my banking does make them money.

Re: Some Silicon Valley Tech Workers Get Home Loans with No Money Down

#93

Post by orasis »

gmarx wrote: post #52

Does anyone else experience mild anxiety reading stories about Bay Area real estate? Long ago I decided it can't be wise to buy instead of rent. Logic and math argue this must end and yet it seems there is always another "sucker". We seem to have entered a new phase in which Chinese are moving money offshore and into the local market. Lots of Chinese, lots of money, could go on and on but for how long? Ultimately a h…

Real estate is a local competition among capital. As long as you have a lot of reasonably wealthy people in the area, prices will stay very high.

I don't see the Silicon Valley startup machine quitting anytime soon.

Re: Some Silicon Valley Tech Workers Get Home Loans with No Money Down

#94

Post by abbottry »

vermontdevil wrote: post #70

Medical school graduates get similar deals as long as they verify proof of residency. They can get up to $500k with no money down and $1m with some down and near zero interest rates. I'm sure other types of employees get these deals. See this for example: https://www.53.com/mortgage/physician-loan.html

Came here to mention this exact thing -- you don't even have to be an attending, my wife and I have this loan through a different company, and she is still a resident. We had banks fighting over our mortgage. No money down, no PMI, and they portfolio the loan instead of selling it right away like a standard mortgage. We live in a Detroit suburb.

Re: Some Silicon Valley Tech Workers Get Home Loans with No Money Down

#95

Post by hibikir »

calgoo wrote: post #32
refurb wrote: post #4

One reason: Almost half of their compensation packages are in Apple shares. So their lender, Opes Advisors, assigned the couple a financial adviser who used a software program to factor in debts and future income, including the stock, and the costs of education over the years for two young children. They don't go into much detail, but this part scares me. I'm assuming the "model" estimates some sort of future value f…

Reminds me of the banks here in Spain in the early 2000s: "Why do you want the loan to only cover your house? Add a car and some vacations in there as well!".... Ummm sure, Ill add a car and vacations... to my house loan? Yea, then people wondered why the country crashed (apart from other issues such as corruption).

To be fair, in Spain, failing to pay a mortgage will mean not just losing the house, but pretty much anything else you own. A cousin of mine, very well off, bought a summer house, which quickly lost a lot of its value. In the US, she could have said screw it! and let the bank have the house, but Spain being Spain, she'd have to pay the difference between the house's market value and the remainder of the mortgage.

That's one of the reasons that in Spain you have such amazing mortgage rates compared to the US: The banks are taking less risk.

Re: Some Silicon Valley Tech Workers Get Home Loans with No Money Down

#96

Post by aphextron »

gmarx wrote: post #52

Does anyone else experience mild anxiety reading stories about Bay Area real estate? Long ago I decided it can't be wise to buy instead of rent. Logic and math argue this must end and yet it seems there is always another "sucker". We seem to have entered a new phase in which Chinese are moving money offshore and into the local market. Lots of Chinese, lots of money, could go on and on but for how long? Ultimately a h…

It's reaching the point of absolute absurdity. Check out the forecast price on this listing: http://www.zillow.com/homedetails/811-Arlington-Ave-Oakland-...

I hadn't looked at zillow in a couple years, I can't believe how insane it's gotten. $800k for a century old 2 bedroom home on a rough stretch of MLK boulevard in Oakland.

Re: Some Silicon Valley Tech Workers Get Home Loans with No Money Down

#97

Post by dragonwriter »

eropple wrote: post #74
ebiester wrote: post #68

Earlier quoted context omitted.

You're not giving the max ($2700 for primary, $2700 for general) each election and gathering up a dozen people who give $1,000+ donations. This would likely be enough to get one congresscritter to look your way, at least.

Yup. $2700 for a primary, $2700 for a general election. Now consider how much of the country could conceivably throw $5400 at something like that without significant sacrifice, and "elite" starts to make a lot more sense.

The elites in terms of expenditure-driven political influence are people whose expenditures far exceed the legal limit on direct donations (because they'll do that for more than one candidate in a cycle, plus giving money to entities like the party congressional/senate campaign committees, and the party national committees, and politically active interest groups, interest group PACs, and candidate- and issue-focused SuperPACs, and, in some cases, carefully structuring transactions to give goods and services directly to candidates and office holders while skirting bribery and corruption laws.)

Re: Some Silicon Valley Tech Workers Get Home Loans with No Money Down

#98

Post by GeneralMayhem »

CPLX wrote: post #56
ryandrake wrote: post #50

I'm confused. The title says "Silicon Valley Elites" but the article says "tech workers", then goes on to list Mark Zuckerberg and some Apple guy who's salary is apparently 50%(!) stock, as examples. So who are these banks "courting" again? Elites or tech workers? Or just these two guys? It's hard to tell. Interesting news would be "Banks giving kickbacks to CEOs and VCs who throw them corporate business." This artic…

I find it hilarious that the answer to this isn't obvious. This is 2016. Tech workers are the American elites. Did you think elites were still guys with a monacle sitting in a drawing room that overlooks a coal mine or something?

The new elites are in tech, but they're not the rank and file. Making even $250k/yr may be top-5% for income and give you breathing room to make a few investments, but it will never make you wealthy. That's lifetime earnings of about $10m before taxes, so you likely wouldn't get to fuck-you money ever, let alone with time to use it.

There's a very serious discontinuity somewhere around the $1m/year mark where you get to the point that you don't have to work for the rest of your life while you're still young. There's another huge difference between that and the guys worth $100m+ who can have whatever they want, including financing insane research and construction projects, not just the normal comfortable middle-class lifestyle, and never run out of money.

Putting those people in the same group as your average software engineer for socioeconomic purposes is ridiculous. Sure, I might have more in common with Zuckerberg than with a coal miner, but only just, and that's not saying much.

Re: Some Silicon Valley Tech Workers Get Home Loans with No Money Down

#99

Post by jpmattia »

elgabogringo wrote: post #5

How does it make sense to tie up $1M+ at 1%? Are they turning around and selling the note to Fannie or Ginnie Mae? Unless we are Japan (and that's a slight possibility, but not likely IMO) this will be a total loser - not as bad as buying Spanish/French/Italian debt at negative rates, but pretty bad. Who else has friends going through all sorts of ridiculous acrobatics to buy houses in the bay right now? Where they a…

> Are they turning around and selling the note to Fannie or Ginnie Mae?

No, they're well beyond the conforming loan limits, even in "high-cost areas".

https://en.wikipedia.org/wiki/Conforming_loan

As I work through this thread, I'm wondering how the banks are structuring the liability (additional assets of the borrower are exposed?), or whether a new set of bagholders has been found (the taxpayers last time, hopefully not again.)

Re: Some Silicon Valley Tech Workers Get Home Loans with No Money Down

#100

Post by tcoppi »

jpmattia wrote: post #75
tsunamifury wrote: post #60

Earlier quoted context omitted.

I actually looked into it. You are required to put 4 months of payments in escrow. This is far less than a downpayment, but still shows your ability to pay.

> but still shows your ability to pay. I wasn't being clear: It doesn't matter that you can pay, it matters that you will pay. (Four months is nothing to the mortgage principal.) Look, the Fed is going to raise rates RSN. Which way does the high end of real estate go when interest rates come off zero %? So suddenly the homeowner is down 10% on the value of their $2M home. Is it worth it for them to mail in the keys t…

> Look, the Fed is going to raise rates RSN.

Is it? It doesn't really seem like it, they raised them .25% in December and haven't done diddly since then, with no signs that they will. Like it or not it is incredibly difficult for us to get out of the ZIRP trap, we most likely won't see anything more than 2% out of the fed for a decade or more. Barring massive inflation, it definitely won't go up fast enough to have a major effect on housing prices like that.

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