| ▲ | seabass-labrax 6 days ago | |
How does that work? Mortgaging is selling a portion (in an abstract sense) of a house for cash, with an obligation to buy that portion back in installments. So parent has mortgaged their 100k house for a million - now what? How do they get out of their obligation to repay the mortgage - that is, buy the house back again for at least a million - without incurring penalties? If there weren't repercussions for defaulting on mortgage payments, anyone could just trick lenders into buying their house immediately. | ||
| ▲ | qwertylicious 6 days ago | parent | next [-] | |
The parent is referring to the "buy, borrow, die" strategy of wealth accumulation. Would that work in your parent's specific circumstance? Maybe? Maybe not? But taking a low interest loan against assets as a method of wealth generation and tax avoidance is both a viable strategy and an extremely popular one. | ||
| ▲ | carlosjobim 5 days ago | parent | prev [-] | |
> How do they get out of their obligation to repay the mortgage After they have repaid the mortgage they will own a million dollar house clear and free. Which they can sell or mortgage again. I'm stating that the ability to mortgage or sell your house for a million is evidence that it has increased in value by 900 000. | ||