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Randy Krum infographic designerRandy Krum

President of InfoNewt.
Data Visualization, Infographic Design, Visual Thinking, Product Development and Marketing professional fascinated by good infographics.  Always looking for better ways to get the point across.

 

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Tuesday
Jul242012

How Banks Make Money From Home Loans

How Banks Make Money From Home Loans infographic

How Banks Make Money From Home Loans is explained right here in this infographic from Tomorrow Finance. We are even given the outstanding figure of $13.4 trillion of outstanding mortgage debt.

What the Frac?

How banks make money from home loans.

Fractional Reserve Banking refers to a banking system which requires the commercial banks to keep only a portion of the money deposited with them as reserves. The bank pays interest on all deposits made by its customers and uses the deposited money to make new loans.

This design does a good job of showing the audience the scale of the amount of money involved.  Each $100 stack of bills is carefully used to visualize the amount of money being used in the explanation, and it makes a bigger impact by making it visual.

The sources are carefully documented and all of the visualizations appear to match the numerical values.  At the bottom should be some type of copyright or Creative Commons statement, and the text URL back to the original infographic to help readers find the high-resolution version when they see posts of this on other sites.

The designer here did a really good job of telling a simple, focused story in the the infographic that is quick and easy for readers to understand.

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References (1)

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Reader Comments (11)

I don't like this one at all. Nothing in the steps show the banks making home loans, or making money from home loans as the title says. The second and third steps don't make sense - why would Jane borrow money from bank A only to deposit it in bank B?
July 24, 2012 | Unregistered CommenterJsam
great blog. thanks for sharing,....
July 25, 2012 | Unregistered CommenterMedical Service
Banks are businesses and as all businesses, they want and need to make money. Whether we like it or not is not the point. Shopping rates, doing your research and reading about it will help you more than just complain about it.

Art Pinto
www.decorativeconcrete.com
July 25, 2012 | Unregistered CommenterArt Pinto
Silly Q's. What does the "x20" refer to in farm mortgages? And the subtle inclusion of a balloon is brilliant, but why no other reference?
July 26, 2012 | Unregistered Commenterg
I really like this great home loans information and thanks for sharing this really nice blog. Appreciative piece of work.
July 30, 2012 | Unregistered CommenterHome Loan Deals
This is very informative! I never knew how this works and the pic breaks it down.
August 3, 2012 | Unregistered CommenterKing
I like this app and I look take to your future posts on further development. Good luck!
Very nice infographic - thanks for sharing. Banks obviously make more money for the LONGER TERM home loans, which is why it's now not uncommon for them to spread your loan over (say) a 35-40 year term. The banks spin this by saying that they're providing a "better overall service to the customer" when in reality they're making 20% more income over the lifetime of the loan :-(
August 6, 2012 | Unregistered CommenterWhiteLoans
Excellent post. I learned a lot.
June 13, 2013 | Unregistered CommenterNJ FHA
Just remember that the bank does not want your run down home. They want interest and money. Most banks nowadays are much better than they were with their lending practices ten years ago. Try researching and using a bank that did not require a government bailout in the last fifteen years. You'd be surprised to know that good lending practices still exist and any bank that did not require outside help to maintain stability is a sure sign of a good lender right there. Thank you!
July 22, 2013 | Unregistered CommenterJesse Janellastaud
Awesome post! Really informative.
April 9, 2014 | Unregistered Commenter37 Property Group

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