5 ms·
It’s turtles. JPMorgan is publicly traded. The renter can just buy as many shares of it as he wants and pretend it’s his home equity.
by naveen99 4y ago
It’s turtles. JPMorgan is publicly traded. The renter can just buy as many shares of it as he wants and pretend it’s his home equity.
- TaylorAlexander 4y agoThis is nonsense. 99.99% of renters can’t buy enough JPMorgan to make a difference. They don’t have the money and that’s why they’re renting.
- darth_avocado 4y agoBut if tomorrow JPM decides to invest like Kathy Wood and lose all the money, the renters will be without home equity and the JPM equity.
- ramesh31 4y ago> It’s turtles. JPMorgan is publicly traded. The renter can just buy as many shares of it as he wants and pretend it’s his home equity. Try asking your brokerage for $400,000 of margin at 5% on a $20,000 account and see what they say. There's no financial instrument even remotely close to what a 30 year mortgage is for the average individual.
- naveen99 4y agoI believe you can get higher leverage on treasury bonds at your broker. My 1 year treasury bonds use less than 2% margin.
- roflyear 4y agoWhat's the rate? You're not getting free money.
- naveen99 4y agoIt’s 1% above what you make on the treasury. Less than mortgage rates for sure, and if interest rates drop it might become free money, of course if interest rates go up you are swimming naked.
- roflyear 4y agoI suppose, but can't really beat 2.5% on a house (remember, if you're living there, you're not paying rent.. hopefully!)
- speakfreely 4y agoGood luck getting 95% leverage to buy $500k worth of JP Morgan stock.
- naveen99 4y agoEquity is the part of the mortgage paid off (unleveraged value in the house).
- throwaway5959 4y agoMaybe the fact that someone can get 95% leverage to buy a fixed rate mortgage for _30 years_ is part of the problem. We should bright back 50% down, five year mortgages and cut the rest of the stuff out.
- roflyear 4y agoThen everyone would have to rent.
- throwaway5959 4y agoNot if prices fell. And they’d save a small fortune in interest over the life of the loan.
- roflyear 4y agoA fortune? I'll be paying a little more than $100k over the life of my 30y mortgage. I think that is very fair for the amount I borrowed (3x that...)
- throwaway5959 4y agoWhat was the interest rate?
- speakfreely 4y ago> We should bright back 50% down, five year mortgages and cut the rest of the stuff out. Well, in that case, good luck convincing the majority of the population to adopt a policy that will catastrophically crash their net worth. Government involvement in mortgages is what keeps our society civil at this point.
- seanp2k2 4y agoHow much of that profit is passed on to shareholders vs benefitting land owners directly? There’s also the matter of not being able to live in those shares, having to still pay rent, still pay massively inflated property taxes yourself…