Celebrities: They’re Just Like Us! These Celebrities Took Out Major Home Loans
You have often been bowled over by your favorite celebrity’s lavish lifestyle, stunning designer dresses, and grand estates, haven’t you? You might not be aware of the fact that many of these entertainers are actually drowning in debts. There is a multitude of luxury home buyers in the industry who have borrowed millions of dollars to lay their hands on their chosen properties. This is a contradiction to the tradition of the super-rich shelling out cash for their super-expensive homes.
Why Do Celebrities Take Out Mortgage Loans?
A steep rise in real estate prices is being hailed as one of the major reasons why Hollywood A-listers often end up taking out “super jumbo” loans, and the number of celebrities taking out big house loans has increased in the past two years. Not only that, low-interest rates are inspiring rich buyers to avail mortgage and enabling them to invest the free cash somewhere else. For banks, giving out these loans is a simple way of alluring valuable customers, a fraction of whom might have invested millions of dollars with the bank and have been pleased with the service they received. If you, as a bank manager, come across a client who is ready to keep his $50 to $60 million with your bank, you would naturally go to any extent to stop them from withdrawing their money.
Even Top Celebrities Opt For Mortgage Loans
According to public records, Beyonce and Jay Z have financed their swanky estate in Bel-Air worth around $88 million by availing a mortgage of $52.8 million from none other than Goldman Sachs. The interest rate in the initial stages was 3.4%. However, by the time 2020 arrives, the rate might become adjustable. This implies that Jay Z and Beyonce would have to shell out almost $200,000 every month, as per the estimation carried out by a mortgage expert. Another well-known entertainer, Mr. Griffin, has opted for a higher mortgage. Sources suggest that he has availed two mortgages through a liability company. The total mortgage has amounted to nearly $114 million. He took out such a huge sum in 2016 for the construction of his residence at Palm Beach. The debt is said to have been issued by JP Morgan Chase.
The Numbers Increased In 2017 And 2018
Aside from these three, Edmonton Oilers hockey franchise owner, Daryl Katz, is said to have taken out a 30-year mortgage sum of approximately $47.45 million to fund his Malibu compound that’s worth an estimated $85 million. According to property reports, Daryl has availed this mortgage from the UBS Bank USA. He is supposed to pay more than $200,000 every month. Senior banking executives revealed that the number of jumbo loan borrowers is increasing with every passing year. Almost 233 mega-loans lie in the range of $10 million to $20 million, and out of these, approximately 23% is said to have originated in 2017, and 16% is supposed to have originated in 2018. In fact, 123 loans have been issued from California, 40 from Florida, and 31 from New York. This data has been released by several well-known real estate research firms.
For borrowers who don’t enjoy a strong connection with a traditional bank, there is a lesser-known group of lenders who issue out debt on luxurious properties and grand mansions, but for an interest rate that’s comparatively higher.
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