Posted on 08/27/2005 11:08:50 PM PDT by Roberts
My house is paid for but I guess if I want to be in with the in crowd, I'd better get a mortgage.
If you thought being upside down on an auto loan was bad.
It amazes me the number of folks who view their home as a savings account. This is going to end very badly, IMO.
The root word of "bankruptcy" is "bank".
Yeah, and the dot.bombers thought they'd created "the new economy". Funny how everything old becomes new again. "2-paychecks-from-foreclosure" isn't nullified by "consumer confidence" and reckless credit card spending.
I knew a guy with probably 10's of millions of dollars of rental properties and his advice was do what you have to but in the end have at least one house that you live in that is paid for in full.
Intelligent use of leverage can be a good thing. The "intelligent" part of that equation seems to be lost on many people.
Debt is not all the same debt. If you can't pay for your credit card purchases, they can't take your home.
It is just capitol - any entreprenour moves money!
More disturbing is the interest only loans folks are taking. As the market cools and interest rates rise, living paycheck to paycheck is going to get tougher and tougher.
I like the advice of another poster - have one home you can fall back in if need be.
Better yet, live below your means.
Not directly, but if someone is in over his/her head with debt, their home will be at risk via a judgment recorded against their property. Furthermore, it is unbelievable that people can't see the wisdom of eliminating debt as an end unto itself.
True if it's certain an investment will go up. Foolish if it holds steady. Fatal if heads down.
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
Millions will be crushed.
Sheer idiocy.
That's so 1960's. It's uncivil for folks today to live below their means.
I would. Where else you gonna borrow tens or even hundreds of thousands of dollars at about 5.5%? That's real cheap money. Wait a few years until the economy takes its inevitable, cyclical dive, and invest the same money in high-yield bonds at, oh 8% or 10%. Heck, maybe those money-market accounts that paid 20% in 1980 will return.
Or, if you are a smart and savvy investor, you can take that 5.5% money and invest it in smart and savvy (if slightly riskier) ways NOW and earn more than 5.5% on it.
For example, lots of people have taken that cheap money and bought more real estate. The value appreciation of real estate over the past few years (in most areas) has equated to way, WAY more than the annual rate of 5.5% on the money that financed the purchase.
There's a whole lot of people out there who are getting very rich .
It would be a tough call, if you were out of work and had used up your savings - refinance your home and try to tide yourself over until you could pay the bills, or run up your credit cards.
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