Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: carranza2 who wrote (6036)	7/19/2001 11:22:43 AM
From: Cogito Ergo Sum	Read Replies (2) of 74559

*It's an economically rational thing to do. Interest rates on home equity loans are substantially lower than those on credit cards.* At some point though, interest rates notwithstanding, the debt service ratio could erode disposable income to nil. One cannot refinance forever. The only other option to increase disposable income then is wage increases and possible corresponding inflation or we could all win the lottery :o) I know people refinancing to maintain their standard of living. After paying 10 years on the mortgage they add back another 5 or whatever via refinancing. When they retire they have no home or at least are still stuck with a big mortgage debt. Note also that up here in Canada we cannot deduct mortgage interest which is further incentive to pay the thing off fast, then borrow against the home (within reason) for investment purposes, a loan whose interest is deductible. By the by, pleading ignorance, what are menudo and sangrita. Both my prep school Latin and Spanish dictionary are failing me here :o) regards Kastel

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