ladelfina
Thinks s/he gets paid by the post
- Joined
- Oct 18, 2005
- Messages
- 2,713
I'm noticing a pattern.
Financially smart and responsible people with good jobs who bought homes in high appreciation areas are reminiscing about how leverage helped them get a big head start.
Just realize that most people are not smart, nor responsible, many dont have good jobs and many buy in low/no appreciation areas.
..not just low-/no-appreciation areas, but low-/no-appreciation eras. I'm glad for the people who reported that lots of leverage worked out ok for them, but it could just as well have gone the other way; not really that different from buying stocks on margin. If the market goes up you look like a genius; if it goes down you look like an idiot.
When things are going up, manuevers like clifp's can certainly work well. Was watching an old Peter Schiff talk to mortgage brokers and he said something that made the recent situation even more absurd: he compared renting to buying in terms of what a person had to come up with at the time.. 3 month's rent/deposit for a rental vs. zero for a house.. credit check and references for a rental vs. essentially waived for a house a couple of years back, not to mention the teaser or neg.am rates that may have made monthly payments less than rent. No wonder renters became buyers; it was made much easier for them in the short term.