Fearing losses, banks are quietly dumping real estate loans • Hacker News Board

Re: Fearing losses, banks are quietly dumping real estate loans

#111

Post by dotBen » Wed, Jun 26, 2024, 2:06 AM UTC

scwoodal wrote: post #102

babyshake wrote: post #57

Earlier quoted context omitted.

A not very degen version of this is taking money that you might spend on your mortgage at a rate under 3%, and putting it somewhere safe that earns more than 5% (not hard to find).

Isn't what you describe using your own capital to use as an investment instead of paying down the mortgage? How do you use the leverage (debt) from the mortgage to put in a 5% investment?

I already owned the house free and clear. Was offered stupid (good) terms for a mortgage so I took it. Used the money to create a return that pays back the monthly interest and principle while still creating a return AND tax deduction.

Re: Fearing losses, banks are quietly dumping real estate loans

#112

Post by Kon-Peki » Wed, Jun 26, 2024, 5:58 PM UTC

dotBen wrote: post #111

scwoodal wrote: post #102

Earlier quoted context omitted.

Isn't what you describe using your own capital to use as an investment instead of paying down the mortgage? How do you use the leverage (debt) from the mortgage to put in a 5% investment?

I already owned the house free and clear. Was offered stupid (good) terms for a mortgage so I took it. Used the money to create a return that pays back the monthly interest and principle while still creating a return AND tax deduction.

Ah, thanks for the explanation. Unfortunately not something I can do.

Re: Fearing losses, banks are quietly dumping real estate loans

#113

Post by yunwal » Thu, Jun 27, 2024, 4:13 PM UTC

jjav wrote: post #84

yunwal wrote: post #73

Earlier quoted context omitted.

There are really really good reasons why certain places are expensive vs. cheap. Having no access to walkable areas, fresh food, education, safe water, or public amenities in general is not a dignified way to live for most people. It's not about fun, it's about your health, community, support system. Changing that situation in cheaper areas is not necessarily going to be easier than changing housing affordability.

> Having no access to walkable areas, fresh food, education, safe water, or public amenities in general is not a dignified way to live for most people. These things are easily found outside of Manhattan (in my example, or whichever large downtown area you prefer). In my little suburb I can walk to just about everything I could need, multiple farmers markets for fresh food (probably more than in Manhattan since there…

> These things are easily found outside of Manhattan

True, but in my experience every place that’s satisfactory on these fronts is also getting insanely expensive, even the suburban areas. I currently live in a walkable small town and COL in walkable areas is essentially the same as, say, Astoria, without nearly as many transit options or amenities.