Quote:
Originally Posted by Incinerator
How is getting financing for your own primary residence playing with fire? Shouldn't it be the other way around? If you're an investor you can overstretch yourself holding multiple mortgages. I don't think there is much to worry about when you only have one mortgage with interest rates still hovering around the low end of 5.xx% as long as you have a steady income.
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That's exactly it. Interest rates will not stay at 5%, and you may or may not always have steady employment, good health, proper insurance, or all the other necessary requirements to service your debts.
This holds true for both the individual home owner and the investor.
The difference being that if you are stretching the boundaries on financing for your primary residence in this current market, there isn't much room for change in economic conditions before you can find yourself homeless.
As an investor, you can decide how much you wish to leverage what you have, and that is often a calculated risk based on what you can afford to lose.
So... market conditions change, and the individual homeowner is homeless, the investor has lost his assets, but still has a roof over his head.