VeeshanVault

I've been seeing a lot on this lately, I don't want to pay on my house forever. I've maintained a very conservative debt-income ratio, worst case I could get by on roughly 1/3 of what I make now. Unless I decide to sell, any equity gain in the house is going to just sit there.

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.

Alan 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.

http://business.timesonline.co.uk/artic ... 66,00.html

As 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.

LA Times article

And dont forget the large number of "Intrest Only" loans people are buying into now. There a great idea if you dont intend to stay longer than a year or two and the price increases enough to cover the intrest you payed, heck thats like a free house.

ATM San Diego's housing market is skyrocketing, may not last forever.

May not last forever? Shit, it CANNOT last forever.

Have we learned nothing from the dotcom bubble? There is no market in the world where a 500% growth rate is sustainable. I look forward to seeing all these stupid fucks homeless in 5 years trying to blame the big bad banks for making them sign these 3rd mortgages.

Noysyrump wrote:And dont forget the large number of "Intrest Only" loans people are buying into now. There a great idea if you dont intend to stay longer than a year or two and the price increases enough to cover the intrest you payed, heck thats like a free house.

Just because you have an interest only mortgage does not mean you are only allowed to pay the interest.