Whaddaya know. Turns out it’s still a sin. That’s more Traditional than most of us bargain for. I love this guy so much!
For a related perspective from Distributists…
The article points out, correctly, that usury is the practice of lending money at a very high rate of interest. It is not the taking of any interest whatsoever on a loan. You can be against the practice of loan sharking and payday loans which exploit the poor without having to tie yourself in knots explaining why it is OK for a saver to get interest on his bonds or savings accounts. Still less need one take the position of the Catholic Workers (an organization I respect in many ways) that taking any interest on a loan is sinful. Like gluttony, usury is a sin of excess, taking excessive interest on a loan. This is the common sense Catholic position I was taught through 16 years of Catholic schooling and it is still the common sense Catholic position.
Our house has been paid for one and a half times over and we still owe the bank more the 18 more years worth of payments. Perhaps once you have half again as much as you were owed you have collected enough.
This may well be a case of excess. I don’t know the exact terms of your loan, but have you considered refinancing? I saved myself seven years of payments and well over $40,000 in interest by this expedient.
We don’t qualify.
Why must you buy such expensive houses? Why not live in a small little apartment or small little house if you obviously couldn’t afford such big payments? Common sense. Everybody wants the “American Dream” (big nice houses, nice cars, nice colleges, &/or nice vacations blah blah), it’s unrealistic people. Not all will be able to live it (economic fact: physical resources are limited- not infinite), so why pretend you can afford by taking ridiculous loans & mortgages from the money-hungry banks (especially the “too big to fail” ones). Live simply, period! Is how a Christian should live. YouTube Dave Ramsey videos.
“Why must you buy such expensive houses”
In many cases, at least where I live, housing costs depend heavily on the quality (or perceived quality) of the local public school district. Families with school-age children will pay thousands of dollars more to get a house in a “good” school district, while the more affordable houses tend to be in urban school districts that people do not want to send their children to if they can possibly avoid it. You could, I suppose, buy a cheaper house in the mediocre/bad school district and use the money you save to enroll your child in private/parochial school, but that is not always an option (for example, if a child has special needs or disabilities).
In other cases, affordable/cheap homes tend to be either in blighted, crime-ridden neighborhoods or they are “fixer uppers” for which the cost and headaches of repair/maintenance may equal or exceed whatever money one saved in the initial purchase price.
Affordable AND liveable homes can often be found in small towns or rural areas far away from large cities; the catch there is that these communities often do not have too many well-paying job opportunities so long commutes to work (perhaps an hour or more per day) are required — which means more expenses for gas, car maintenance, etc. and could be a total budget-buster if gas ever goes back to $4 a gallon or more like it did a few years back. So buying an “expensive” home is not just a matter of greed or selfishness in all cases.
We bought a 3 bedroom 110k house. For the first while all you are paying is interest. We have paid off 26k of the principle. Interest on homes loaned are compounded. They don’t figure a percentage of the loan, then add that to it, divide it up into payment over 30 years and that’s what you pay. You pay the interest every time. Till your last payment.
It isn’t a huge payment. About 1100 a month. Over 12 plus years. 144 months x 1100=158,400. We have been here 6 more months than that. So 165,000. We have paid the 110k for our home plus 55k on top of that. One and a half times the actual loan.
If you ever get an unexpected windfall or a bonus you don’t immediately need for a new transmission or the kid’s braces or something, making the occasional random payment against the principal helps. You send the money, tell them ‘apply to principal.’ They can’t say no.
Dave Ramsey got rich offering expensive seminars on money-management to poor people. I have a friend who’s a devotee. Somehow, she’s still poor. Lives in an efficiency, has a car I bought her, & has possessions in 2 storage lockers & a pawn shop. Admittedly, Ramsey didn’t make her a knucklehead, but his snake oil isn’t helping.
Some of us would have had to move a few states away to buy an affordable house. And in my area, it’ll only get worse because our town made it on some stupid “best places ti live list.” I’m sure or income would go down accordingly, as well, because the job doesn’t transfer that far away. Small and little don’t work with 4 kids. That’s where we were before we bought this house.
I’ve heard this argument recently… Where was it?… Oh, yes, I remember!
A commenter in a previous thread on the Hobby Lobby case repeatedly claimed those four contraceptives objected to as abortifacient were, in fact, not. This was because they frustrated implantation, and experts now definepregnancy not as carrying a fertilized ovum, but carrying an implanted fertilized ovum.
This sort of sleight of hand betrays either ignorance or malevolence.
Being charitable, I would suggest you study the issue at hand much more deeply.
This was because they frustrated implantation, and experts now
define pregnancy not as carrying a fertilized ovum, but carrying an
implanted fertilized ovum.
Since these particular drugs frustrate implantation rather than conception (since conception has already occurred), then why not call them “contra-implantives” instead of “contraceptives”?
There would be less confusion at least.
More confusion is kind of the point of such a rhetorical move.
Excess or moderation has nothing to do with whether interest charged is usurious; rather, the question is whether there is any just cause for charging anything over and above the principle.
The article from the Distributist review which Mark links is an excellent summary of the Church’s teaching on usury. It is long, but it gives a clear understanding of a very complex subject.
Given that money has time value, in an inflationary economy there is always going to be a just cause for charging something above the principal, but it is a question of how much above is justified, so that is indeed a matter of moderation or excess. In a severely deflationary economy, it might be unjust even to demand repayment of the entire principal as this would now be far more valuable than when the loan was made. So how much of the principal to demand back in those hypothetical circumstances? Again, what’s fair and what’s excessive?
Well – its usury if you get something for nothing – so if you take no risk on your loan it is usury. Federal student loans are usury without question. Home mortgages are not usury because the borrower and the lender are both taking a shared risk. If the borrower cannot pay the lender loses also – he cannot enslave the borrower etc.. It is usury for banks to offer high interest rate loans to people who have just come out of bankruptcy because those people cannot get bankruptcy protection for another 8 years. Just mho…
The lender gets the house. Oh if we could all fail like that!
The lender has a house. The bank doesn’t want more houses. Banks don’t even know how to use kitchens or bathrooms.
If the bank gets the house, but can’t sell it for more than the outstanding principal on the loan, the bank loses. Even if there’s no deficiency on the sale, the bank still loses, because the bank was counting on a continuing revenue stream.
Of course, the bank doesn’t lose nearly as much as the mortgagor, and in practice the mortgagee just sells the mortgage to downstream investors, but in principle, it isn’t wrong for banks to charge money for their credit risk.
Only a bank can require you to pay twice for your home, and then borrow your money at zero percent interest to facilitate earning billions for their own coffers. It may not be text-book usury, but it’s text book “getting used”.
thanks for the link to the Distributive Review, as the article sited claimed usury was illegal loans, like loan sharks, that charge very high interest. Mortgages have to be the ultimate example of usury. Also credit card banks charging 28%, 30% and then also charging the seller interest.
Or student loans with compound interest, so it looks like low % but is not.
Yes, the student loans are horrible. So many young people burdened with debt. My husband co-signed our daughter’s student loan and in the event of her untimely death, he would have to keep paying on the loan.
You don’t need expensive colleges, we got public libraries. I know much more from spending days & evenings (or even early mornings) at the public library going to their open workshops & pouring myself over all kinds of books (including Chesterton). Amazon also has cheap books when my library doesn’t have them. Colleges (especially private ones) are ridiculously expensive centers of spoiled kids, drugs, sex, booze, & liberal “progressive” professors (these include “catholic” universities). The liberal college system is crumbling itself. No, save the money (& skip the crazy sex, booze & liberals), don’t pay into the liberal system, & go to public libraries (free) & vocational trade schools.
you seem to know a lot about private colleges. did you attend one?
What alternative is there to being swindled by the banks? My wife and I are looking at purchasing a home, but $2k a month over 30 years will end up having us pay$720,000 on a $350,000 home (our area is very expensive). The alternative is renting from a management company that jacks the rate up each year. How do people survive?
Ben, that’s still not good enough. You can definitely find a house that’s cheaper than that. Come on. Google Dave Ramsey (Christian man who has a national radio & gives very sound free money advice). Look up Dave Ramsey’s YouTube video. By buying a $350000-$700000 house when you cannot afford it while saying it’s the cheapest you can find, you’re kidding yourself & not being a good Christian steward of your gifts, money & financial future. You will need to sacrifice, like Christ.
Apartments should be an option, or living in RV/trailer
To defend Ben, my wife and I live in the Washington DC area, where the situation he describes is all too common. It is very difficult to find a house cheaper than 300K here. Even if you can find a fixer upper at a lower price and willing to do the mold remediation yourself, you then have to deal with developers offering 20-50K over the asking price in cash. Apartment living is an option, but one that is not great for anyone with a family (try putting a kid asleep when your undergraduate students neighbors are having a keg party) but we make the most of it. As for your trailer park option. You can actually buy nice trailer home around Dulles airport for a low 80K. The catch is you have to rent the land for $1000 per month. And if the land owner ever wants to sell that land to those developers or the airport, your charming little trailer home becomes a liability. Some folks I work with buy in West Virginia and take a 2 hour commute (each way). That’s also an option, but one that keeps you way from your family 4 hours beyond your work day. I say all this simply to correct any notion that Ben needs to try harder.
I live in the Washington DC area . It’s hard to even find a fixer upper for less than 300k, unless I want to worry for the safety of my wife and young daughter every day. I wasn’t trying to start an argument here. We are continuing to explore our options, but none of them really look any good. We are considering moving back to my wife’s home country where there is a bit more support for people with children. We could afford a 300k + house now with my wife working, but if/when she has another baby that money goes out the window either to daycare for people to raise our children for us so we can pay the banks or through my wife not working. I know other people have bigger problems, just thinking out loud here.
Moving sounds like a good option to me- housing that expensive is ridiculous. Unless your job requires it, get away from the east or west coast and you will find life becomes very affordable for families.
Might be what I have to do. Would be tough leaving my extended family behind however.
My wife and I rent a two-bedroom apartment (one BR with a study, really) with a baby on the way. She will stop working, and we’ve selected a place where rent won’t break our backs on one income in the hopes of getting into a house someday. Two things:
(1) Break out of the mainstream personal finance/homebuying worldview. There are plenty of secular alternatives that will fit a Christian worldview with a sprinkling of grace.
(2) Google “financial independence”. You don’t have to set it as a goal for yourself, but the perspective of some authors really sets a lot of modern mindset upside down. I follow a really neat Christian guy at http://www.fijourney.com.
All the best with your discernment. And we’ve got plenty of jobs here in Texas. 😉
$1000/month? wow! In Tampa/St Pete, the going rate for the land under a modular home seems to be around $500/month.
lecturing others on how they should live is really offensive. essentially your point is “allow yourself to be controlled by the people with the money, who make up their own rules.” it is they who need the moral lecture, as Francis knows.
People who own million dollar houses or contemplate buying them ARE the people with the money.
a $350K home is not a $1M home.
“You can definitely find a house that’s cheaper than that”
I dunno, it depends on where he lives. If he lives in a major metro area like NY, LA or Chicago that may very well be what he has to pay to get a fairly average size house with at least 3 bedrooms in a reasonably safe neighborhood. Also, apartment rents can be just as expensive or more expensive than the cost of a mortgage payment.
There’s always cardboard boxes, too. You can waterproof them with tar & stuff. [/s]
What happened to this topic? It disappeared for a week or two and now has reappeared. BTW, since the “upgrade” the Patheos site is more user unfriendly than ever.
There was a datestamp messup and so this reappeared now because the Patheos guys fixed it, I think. It shouldn’t happen again.
Yes, usury is still as sin, just like tons of other things people pretend ‘aren’t sins anymore’.
From the article:
“Usury, the practice of illegally lending money with a very high amount
of interest, has become more widespread in recent years as individuals
and families have struggled to make ends meet during the economic
Actually, I thought usury was the practice of lending money with any interest. If that’s so, does that mean that it is not permissible for a Christian to use a credit card? Interesting side note: In Germany, a vast majority of people do not even use credit cards. They just use their chip and pin Eurocards. It seems that “debt” and “guild” are the same words in German.
Many people today do think that usury is just charging excessive interest. My understanding is that charging interest at all is usury, and a sin. It’s simply exploitation of the poor, which is pretty bad.
With that said, being charged interest is not the same as charging interest, just as being lied to is not the same as lying, and being murdered is not the same as committing murder. Taking out a loan that you cannot pay back may be imprudent, it may be a sin, but it is not the sin of usury.
Depends, too, on whether you pay it off every month. No interest charges that way. But as Lisa pointed out, paying interest is not a sin; charging it is.
There’s likely to be a non-usurious business model (see “Muslim lending” or “Halal lending”) that charges a flat fee to all cardholders, and just drops customers who maintain too large a balance.
Pope Francis is right to highlight this predatory lending. Their target demographic are those in desperate financial circumstances and they make their money squeezing as much out of these people possible.