Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: LLCF who wrote (17109)	3/20/2002 3:45:07 PM
From: GraceZ	Read Replies (2) of 74559

My point was that the debt carried against the asset isn't a problem while the asset is appreciating. Even in situations where I see people continue to borrow against a house it is in a situation where they then take that money and reduce other higher interest rate liabilities or they use the cash to increase the value of the house. (Ie. add rooms, make improvements). Mostly what I see is people using a low rate environment to either reduce their payments or reduce their term on existing debts while keeping their equity equal. Either situation shores up the financial situation of the borrower.

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