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Originally Posted by Sylvanfan
You can also borrow to invest and lose that money too.
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Right, but that's not what we are talking about here. The example given was someone who is investing the difference between rent and what the mortgage/expenses would be.
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Home owners who end up in negative equity situations have the choice to keep making their payment or take it up the tail pipe then and there and get out. If you invest on margin, and lose it all...no choice, and no place to live either. Like anything you have to be selective with what you buy.
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I think lately the negative equity people have had it a bit easier come refinance time because prices have been rising dramatically over the last few years so there's less risk. But if/when prices start heading the other way (like down in the states) people won't necessarily have that option to just keep making the payments.