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What does the lender use as collateral? And doesn’t this defeat the point of most loans? People use houses as collateral for mortgages, but other than that are
by graeme 6y ago
What does the lender use as collateral?
And doesn’t this defeat the point of most loans? People use houses as collateral for mortgages, but other than that aren’t most loans given with substantially less collateral, all the way to zero collateral?
Even mortgages are usually less than 100% collateral. And the house isn’t in escrow! You use it.
Am I missing something fundamental? How does it make sense to borrow $100 and lock up $150 for the lifetime of the loan?
- bhupy 6y ago> Am I missing something fundamental? How does it make sense to borrow $100 and lock up $150 for the lifetime of the loan? Great question, I was just as dumbfounded as you are. Answered below in another sub-thread, which I believe you're also participating in: https://news.ycombinator.com/item?id=26162914 https://news.ycombinator.com/item?id=26162914