| Too Many Financial Terms |
[Mar. 4th, 2009|08:46 am] |
When your car is worth less than the money you owe on it, your loan is upside-down. However, when you owe more on your house than the house is worth, your loan is not upside-down, but underwater. Why two different terms for essentially the same concept? Is it perhaps to immediately distinguish between home loans and other loans? Is it a mass conspiracy to confuse loan consumers and cause the eventual downfall of civilization? I dunno. I do know that it is one more financial term we all have to know, especially now during this recession when newscasters are talking about the record number of "underwater" mortgages in the country.
It makes me wonder what they call it if I owe more on my boat than the boat is worth. "Underwater" has already been taken. Perhaps my boat loan is "underground"? Or maybe it's just listing a little.
P.S. I don't actually own a boat. That was just an example. |
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| Comments: |
Hrm. I have heard the term "upside-down" used in reference to home loans by financial professionals like Suze Orman. Underwater doesn't make any sense to me as a financial phrase.
It's a new phrase to me. I only started hearing it maybe a year ago. I've heard "upside-down" term for years and I was expecting the news people to start using it when the mortgage crisis hit last year. Instead I keep hear "underwater". I wonder if someone made up the "underwater" term and was completely ignorant about "upside-down" and "underwater" suddenly became the popular word by the media to use for the situation.
Maybe they like to use that as it gives reference to people drowning in debt? That's much more dramatic! | |
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