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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

#61

Post by Johnie »

JumpCrisscross wrote: post #26
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…

> How does it make sense to tie up $1M+ at 1%? Three things likely going on here: loss leading, promotion and a hunt for yield. Let's start with the hunt for yield. Yesterday's auction priced the 3-year at 0.87% and the 5-year at 1.15% [1]. We don't know the term of Zuckerberg'a mortgage. If it was less than 5 years, the bank might make a spread. If it's a loan with a longer term the lender could have made more by le…

Also, someone like Mark Zuckerberg has almost 0 default risk. To the banks, this is free money.

Remember, when the bank issues a mortgage for 3.5%, the spread between that and their cost of capital covers the risk of default. But if the default risk is minimal, they can basically issue the loan at cost.

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

#62

Post by jpmattia »

JumpCrisscross wrote: post #44
jpmattia wrote: post #33

Earlier quoted context omitted.

There's also a deduction phase-out at high incomes. (450K iirc)

$1MM if single, $500k if married and filing separately. EDIT: see comment below. One can deduct the interest on mortgages up to $1MM and $500k, but there is a cap on itemised deductions (mortgage interest deductions are this kind of deduction) around $450k. http://www.bankrate.com/calculators/mortgages/loan-tax-deduc...

There are two different things:

From your link: Taxpayers can deduct the interest paid on first and second mortgages up to $1,000,000 in mortgage debt (the limit is $500,000 if married and filing separately).

So mortgage interest for loans beyond $1M are not deductible at all.

Then there is the deduction phase-out

> You are subject to the limit on certain itemized deductions if your adjusted gross income (AGI) is more than $309,900 if married filing jointly or qualifying widow(er), $284,050 if head of household, $258,250 if single, or $154,950 if married filing separately. Your AGI is the amount on Form 1040, line 38.

https://www.irs.gov/publications/p17/ch29.html

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

#63

Post by [deleted] »

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?

[deleted]

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

#64

Post by ryanlm »

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?

Is that so? Why would tech workers be considered elite?

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

#65

Post by zanny »

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?

> Tech workers are the American elites.

I don't have any congressmen on speeddial to get whatever I want passed through the next pork barrel bill in Congress, what am I doing wrong?

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

#66

Post by [deleted] »

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…

[deleted]

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

#67

Post by lisper »

zanny wrote: post #65
CPLX wrote: post #56

Earlier quoted context omitted.

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?

> Tech workers are the American elites. I don't have any congressmen on speeddial to get whatever I want passed through the next pork barrel bill in Congress, what am I doing wrong?

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.

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

#68

Post by ebiester »

zanny wrote: post #65
CPLX wrote: post #56

Earlier quoted context omitted.

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?

> Tech workers are the American elites. I don't have any congressmen on speeddial to get whatever I want passed through the next pork barrel bill in Congress, what am I doing wrong?

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.

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

#69

Post by jpmattia »

jonknee wrote: post #49
jpmattia wrote: post #33

Earlier quoted context omitted.

There's also a deduction phase-out at high incomes. (450K iirc)

Though somewhat ironically, Zuck probably isn't high income because his Facebook salary is $1 and the vast majority of his wealth is in FB shares that pay no dividend.

Low income reduces the value of the deduction. I'm sure there are a gaggle of cpa's optimizing his 1040.

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

#70

Post by vermontdevil »

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

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