LifeinAsia - 6:20 pm on Aug 13, 2007 (gmt 0)

I agree- the ones doing the risky loans (the loaners AND the loanees) were basically gambling, using the real estate market as the vehicle instead of tables at Las Vegas. Just like any gambling/investment, there are associated risks.

One has to wonder how many of the people who are currently being (or soon to be) burned by the downturn in the sub-prime market were also "victims" of the dot-com market crash.

No one likes to hear that they realistically can not afford to buy a home. But that's exactly what a lot of people should have been told. Home ownership is certainly not a right; it's a privilege that needs to be earned (in terms of fiscal responsibility).

My wife and I desperately wanted to be home owners for years. But we faced reality and accepted that we weren't in a position to afford a house. Eventually, our circumstances improved and an opportunity came up that allowed us to buy a house. But before we jumped in, we ran and re-ran the numbers numerous times to make sure we could afford it.

Yes, we also "gambled" an went with an ARM and interest only loan. But we're paying a lot more than just the interest portion every month. We also went for the higher rate and have another 9 years before the interest rate adjusts. We expect to probably move to another house within the next 5 years, but we also have an almost 4-year cushion after that in case our circumstances change. Regardless, we've been going forward planning on the worst-case scenario that we'll still be in the house and mortgage rates will be through the roof at that time, so we'll have a sufficient cushion built up by then.