Quote:
Originally Posted by Moose
Millions of people used the equity in their homes like an ATM machine through Home Equity Lines of Credit the last decade, creating huge consumer spending that did not include home improvement. Buying cars,vacations,second homes ..you name it, it was being bought with HELOCS.
Millions of these loans were being originated in California alone in the last big run up, sure alot more elsewhere as well.
|
I've heard that. But again...neither myself or anyone I know personally has knowledge of anybody buying cars and vacations with home equity loans.
And since the people I run with are homeowners like myself...it seems strange that none of us or anyone in our families knows of anyone using their home like an ATM machine.
First off you had to HAVE equity in the home to do that...right? Which means you have paid enough of your mortgage to have something in it correct? Or am I off base about that?
Anyway, that would mean that it would be mostly people with money to begin with. Nice enough homes with enough equity to get a home equity loan.
I personally had a home equity loan on my last house in South Carolina. I borrowed $200,000 against it.
BUT...I had already paid the home off in it's entirety in 8 years, and I already had it sold. I needed the money to close on my current home in Las Vegas.
So I took out the home equity loan. Flew to Vegas with 200 grand. Closed on my current home with that money. Flew back to South Carolina did the closure with my old home the following week with the new buyer.
Paid back the home equity loan in full right there on the spot.
That was my personal home equity loan story. I never knew anyone who took a home equity loan to go on vacation or buy a car though.
Did you personally ever know someone who did that? It sounds like a pretty dumb idea right out the gate if they did.