Patrick McKenzie


14 days ago

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And you’re now upside-down on that mortgage, having seen your $120k down payment vaporized when the value of the house decreased with the interest rate increase. Mortgages are a complicated bet presented as simple!

“Is that consequential? You own the house and nobody can margin call you on it.” Yeah but you can’t leave without walking away from the equity you thought you had (and now likely do not), which complicates many life plans.

As always I refer you to Byrne’s excellent essay on this, which thoroughly earns the contrarian title:

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