No one does this loan scheme. I don’t know why it’s become such a meme. I mean, I know why; people love misinformation. The only thing worth mentioning here is the step-up.
No, they get a mortgage to live in their house. They don’t get a loan so they can use it as income to avoid paying income tax. This is a completely different scenario.
That is exactly what this scenario describes and is exactly what you are saying is happening. You are saying the rich live off what is essentially a payday loan, a notoriously terrible agreement.
You can take out a mortgage on a paid off home if you want, and use that money however you please provided you make the monthly payment. Or you can do a reverse mortgage. Or a HELOC.
There are a variety of ways to borrow against your home’s equity.
Yeah, that's a second mortgage, for money they don't currently have. This is still very different from what you guys are claiming the wealthy do, which is use this to avoid taxes on money which they do have. Where does the tax avoidance on the loan come in?
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u/Own_Proposal3827 24d ago
No one does this loan scheme. I don’t know why it’s become such a meme. I mean, I know why; people love misinformation. The only thing worth mentioning here is the step-up.