2 ms·
One of the problems that I see is that, sometimes, you must borrow beyond what you feel is your limit, because everyone else is doing the same and the market ri
by alanfranz 2y ago
One of the problems that I see is that, sometimes, you must borrow beyond what you feel is your limit, because everyone else is doing the same and the market rises accordingly.
So you take the “everybody is doing this so if we fall, we fall together and somebody will need to act” route.
That can happen in a (imho) non-perfect, non-commoditized market like housing. I wouldn’t care for people overborrowing on, let’s say, cars.
- alecco 2y agoWhat could possibly go wrong.
- alanfranz 2y agoEverything. But what is the real alternative? Renting, with the risk of rent going up and become unbearable? I know quite a few “mindless borrowers” who did ultimately “win”: their house price increased a lot and so they are now sitting on a house which has a much higher value when compared to their mortgage. They could sell and realize a huge profit. Basically, the system invites people to gamble.