Capped Rate
A capped rate is well, just like it sounds...a rate that is capped. In home financing terms, it is an interest rate that has been capped at a certain percent and cannot ever go above that set mark.
Let's say you're buying your dream house for a cool $900,000 bucks. You're discussing the details of your forever loan with your mortgage guy and he's droning on with the boring details of origination fees, PMI, closing costs, and attorney's fees, but you're only thinking about the stupidly, ridiculous amount of time that you'll be paying on the loan and about how much it's really going to cost you in the long run.
He's getting to the part about a capped rate and never having to pay more than x%...which suddenly peaks your interest (sounds like you might be saving a little dough on this baby). He explains that the current variable rate on your mortgage is 3.5% but because it's variable, this can fluctuate with the market. However, the interest is capped at 6% which means your rate will never go above that. Sounds like a deal! Until he says that you were actually only approved for a $90,000 loan. Humph.
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Finance: What is an Omnibus Account?111 Views
Finance a la shmoop. What is an omnibus account?
Herbi just eats leaves, Carni just eats meat, Omni well it's pretty much [Different buses eating stuff]
everything. So yeah an omnibus as in bus-i-ness or business account services is
a bunch of investors who've all pitched in or wired in their capital to become a
percentage owner of that omnibus account. Why would people do this? Scale, volume,
discounts size, heft. When you have a lot of money in an account basic things like [Lots of money in a suitcase]
audit and legal fees and brokerage services and the fees with them and
other one-off costs get amortized across a lot of people in dollars invested [Definition of Amortization]
rather than being laid entirely or solely on one investor where they can
then be a meaningful percentage of the total and with an omnibus account you [Bus labelled Omni eating leaves]
also get anonymity since it's a broker dealing in street name with the account [Anonymity stamp]
interfacing with the street well investors can live if they want in the
lovely dark shadows of Erewhon. Omnibus accounts are sort of like your own [Full moon in a dark sky]
custom mutual fund without the whole nav, net asset value stamp requirements at
the end of each trading day and all the other regulations and filings and legal
crap needed for publicly offered securities it's like having a fully [Book labelled my very own omnibus account]
gassed up bus with a working GPS and Waze system you can drive anywhere you [Guy sat on a bus]
want on the investing landscape you don't have to tell anyone outside of
your own partners about it, and it works great as long as you all want to eat the
same kind of financial cooking.. [Omni asking Carni if he is going to finish his food]
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