When I look at people like my neighbor, who has 3 mortages I wonder what she's thinking. One of them paid for a rail dragster for her (now ex) husband. The total of the mortages is roughly the market cost of the house. Someone I work with has an open credit line, and can (and does) spend up to the equity value.
It's not free money, if they ever want to move, and both plan to at some point, that's going to come out of anything she might have to purchase another house. They might as well rent. The market will fall at some point, what do you do then? You won't be able to move, ever. Unless you can afford to pay off everything and start over from scratch. Not too likely for most.
http://business.timesonline.co.uk/artic ... 66,00.htmlAlan Greenspan wrote:people were investing in houses as if they were a one-way bet, not allowing for the risk of price falls. He said “history had not dealt kindly” with investors who kept ignoring risks.
LA Times articleAs they happily watch their houses swell in value, Americans are changing their attitudes toward mortgage debt. Increasingly, a home is no longer a nest egg whose equity should never be touched, but a seemingly magical ATM enabling the owner to live it up or just live.
