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The Death of LIBOR & it’s Impact on Home Insurance & Interest Rates 2019, 2020, 2021 and Beyond
Posted by Premier Shield Insurance on
If you are a homeowner and you aren’t savvy to what the LIBOR is, don’t worry. It’s being phased out. I will never forget the LIBOR Scandal of 2012. They were literally manipulating global interest rates world-wide over day-old sushi just read this piece in the RollingStone: Everything Is Rigged: The Biggest Price-Fixing Scandal Ever. The more you learn and understand Wall Street, big banks and institutions use the “system” to their advantage, the more you wish you just didn’t have to do business with them.
My heart goes out to all the first-time home buyers that were taken advantage of back in 2012. They’re probably paying, at a minimum 25 basis points (.25%) more, on a 30 year fixed rate mortgage. The staggering figures equal $71.869.51 paid in total interest over the life of the 30-year fixed rate loan. That compares to Total Interest Paid $66,721.61 over the life of the loan on a 30-year fixed mortgage at an APR of 3.75% compared to a 4% APR. That is $5,147.90 for every $100,000 borrowed on the 30-year fixed loan. Most United States residential real estate sales are going to first-time homebuyers today. Many are unable to put down 20% for a loan so they are required by the lender to have PMI. This causes them to spend a lot of extra money over the life of the loan.
Premier Shield Insurance First Time Home Buyer Tip #1
Do everything in your power to avoid PMI (Private Mortgage Insurance) and put 20% down. Obviously, when you’re buying your first home you are depleting your bank account no matter what the down payment is. It’s ironic that
I live in Massachusetts and the median price of homes currently listed in Massachusetts is $439,900 according to Zillow. My business partner lives in Connecticut and the median price of homes currently listed in Connecticut is $314,900. Yet people in California face unsustainable housing price growth. Currently, in the state of California the average home prices and home values. is approximately $525,000 while the Median listing price; $491,100.
With the large financial commitment needed for a down payment on a home, it’s important to start saving as soon as possible. The American Dream has slowly grown out of reach for the average American. Millennials are beaten down and strapped with high debt levels (Currently a $1.5 Trillion in Student Loan Debt Bubble). It’s frustrating as a business owner, to watch the widening gap between the rich and the poor, in the face of rising cost of living. We are told by the money powers and the Federal Reserve that inflation is low.
LIBOR has a huge impact on inflation in the United States. It is the rate that all other rates are based on. Isn’t that crazy?
The average American should get educated on inflation. Yet we find based on our internal studies, Americans are increasingly seeing less money left over after paying their monthly bills and simply don’t have the time or inclination to get educated on inflation.
THE 2012 LIBOR RIGGING SCANDAL FALLOUT
Fast forward to 2019. The average United States price to rent is absolutely out of control and need to be addressed. Not just the news media, it needs to be a political issue. The answer is through free markets not subsidizes.
Last week I was reviewing the April 2019 United States Rent Report and there were some interesting pieces. According to the report, the U.S. Median Rent Growth Slowed to A Modest 1.3% Year-Over-Year.
The problem is, these levels are still at all-time highs wage we are slowly coming out of a 40 year period of stagnant wage growth.
Our national rent index remained flat for the second straight month, following two months of slight decreases, a pattern that is consistent with the seasonal trend of stagnating rent growth during the winter months.
Year-over-year growth currently stands at 1.3 percent, trailing the levels from the two prior years.
Many lives were destroyed over this LIBOR scandal. Will this even be addressed in the election? It will only be addressed if financial fallout from the LIBOR rate change impacts financial market going into the election cycle.
As we enter the election cycle of 2020 we’re seeing how the Democratic candidate (Joe Biden, Kamala Harris, Elizabeth Warren, Cory Booker, Beto O’Rourke, Pete Buttigieg, Amy Klobuchar, Andrew Yang) will stand up again president Donald Trump.
Will they be able to deliver an economic win for the average American? Which candidate will help bring lower insurance prices?
Time will tell the long-term impact of LIBOR on insurance for 2019 and beyond. We will keep updating this page as more LIBOR-related material becomes available.
.You always hear how happy sellers are making huge profits selling their home. You never hear about how subsidizing housing has created a massive landlord bubble. We’ve seen it with the student loan debt bubble. You will soon learn about a commercial real estate debt bubble as it starts to unwind. This artificially manipulates prices. Premier Shield Insurance understands the needs of the working class.
Why Does Premier Shield Insurance Think LIBOR is Important?
At Premier Shield Insurance we are an advocate for everyone that crosses our path. We don’t care if you’re a homeowner or a renter, we still believe that your needs are important. If you are a renter, we want you to work hard and achieve the “American Dream”.
“The American Dream is one of success, home ownership, college education for one’s children, and have a secure job to provide these and other goals:. – Leonard Boswell
LIBOR FREQUENTLY ASKED QUESTIONS
What is LIBOR? LIBOR is the London Inter-bank Offered Rate is an interest-rate average calculated from estimates submitted by the leading banks in London. Each bank estimates what it would be charged were it to borrow from other banks. The resulting rate is usually abbreviated to Libor or LIBOR, or more officially to ICE LIBOR. Read More
What will the fall out be getting rid of LIBOR? Time will tell what the central banks and regulators find to be the optimal solution.