Buying a car with cash

[frosst]

Because real estate generally appreciates, you can borrow against it at really favorable rates allowing you to "untie" your money and use it as leverage in other endeavors.

I may be wrong here, because I've not been following the news all that closely, but didn't Western civilization recently collapse because of this theory?

LOL true

um no. banks gave out loans for people to buy houses. people who couldn't afford the types of loans they were given. not because the people refinanced, pulled out equity, and wrongly invested said money.

[boost]

Because real estate generally appreciates, you can borrow against it at really favorable rates allowing you to "untie" your money and use it as leverage in other endeavors.

I may be wrong here, because I've not been following the news all that closely, but didn't Western civilization recently collapse because of this theory?

LOL true

um no. banks gave out loans for people to buy houses. people who couldn't afford the types of loans they were given. not because the people refinanced, pulled out equity, and wrongly invested said money.

well, to be fair, its all cyclical. The easily available loans made the market more active, driving up prices, and therefore inflating the true value of a house to an unrealistic level. Then people could borrow against this unrealistic number... but when the bubble pops, they no longer have the assets to cover their loan, should something go wrong. So lending to people who couldnt afford to pay back creates a market in which everyone is getting loans that they cant back up if need be.