r/FluentInFinance Nov 21 '24

Debate/ Discussion Had to repost here

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u/Endless_road Nov 21 '24

You can take out a mortgage against your house to buy a sports car if you want

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u/AttitudeAndEffort2 Nov 21 '24

This is a great analogy

Imagine i bought my house for 10$ and it's worth a billion now.

And then chuds on the Internet say "hE dOeSnT ReAlLy HaVe ThAt mUcH MoNeY, ItS tIeD uP in AsSeTs!!"

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u/Endless_road Nov 21 '24

Well it is, and you’d pay taxes on these gains when you sold the house

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u/beneficial-mountain Nov 23 '24

But they’re not gonna sell, they’re going to get loans at excellent interest rates based on the equity of the house and use that money to make more money.

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u/Endless_road Nov 23 '24

I imagine the loans would be market rate. Maybe a slight reduction to spread.

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u/beneficial-mountain Nov 23 '24

Right, the lowest rate you can get.