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Response to Egalitarian Thug (Reply #58)

Tue Aug 13, 2013, 06:19 PM

61. I think the point would elude you, but ok...

Interest rates reflect risk.

Jumbo loans have higher rates because they represent more aggregate risk than smaller loans. Processing them may cost about the same, but that's not the point. The financial risk is higher, so the return needs to be higher.

It's a pretty straightforward concept in finance that's been around, oh, forever.

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