RE-ATM Vancouver – “They don’t consider a HELOC a loan but rather consider it already ‘earned’ cash that was ‘trapped’ in the house.”

“My significant other has two sisters, each of whose family has taken out HELOCs on an annual basis (“to get us back to even”) the last three years. Their mortgages are coming up for renewal later this year and I’m curious as to the how much they owe relative to perceived equity. The one sister talks about “moving up” in a couple of years (“Janie and Andrew [their children] will need their own bedrooms soon”), but all I can think about is how she has no idea what is going to hit them. If my hunch is correct, they’ll barely be able to remortgage their current place let alone have the means to move up. I’ve decided to keep my mouth shut when I’m in their presence, however.”
oneangryslav2 at VCI 22 May 1:36pm

“Two close friends of mine got 50k HELOCs each within the last year. They are at their max right now.
They don’t consider a HELOC a loan but consider it as already “earned” cash that was trapped in the house. And no they are not uneducated hillbillies. One works as senior analyst for the government..i just roll my eyes and pray that god will have mercy.”

bum at VCI 22 May 2012 12:07pm and 1:59pm

Only a small percentage of overextended home owners need to get into trouble to put considerable downward pressure on prices.
– vreaa

10 responses to “RE-ATM Vancouver – “They don’t consider a HELOC a loan but rather consider it already ‘earned’ cash that was ‘trapped’ in the house.”

  1. “Only a small percentage of overextended home owners need to get into trouble to put considerable downward pressure on prices.”

    It’s so hard to get, that so few can cause so much disturbance by making asking prices obsolete literally overnight.

  2. “One works as senior analyst for the government”

    Should it be a surprise that our govt is malfunctioning?

  3. Paul Streppel

    rating Canada’s provinces:
    BC is highest in personal indebtedness at $37,000 not including mortgage debt. Alberta is second at $33,000. Quebec is lowest at $18,000.

    The $37,000 breaks three ways; a)Heloc, b)Auto, and c)Credit card, with HELOC debt the highest of the three. But interest rates go the other way, of course. CC debt is highest, then Auto, then Heloc.

    Often Heloc is considered ‘good debt’, but what most don’t realize is how easy this ‘line of credit’ gets run up. So how good is it, really?

  4. pffft! omg … title has magnificent visual potential … it’s for sure not the cash that’s trapped … think-think-think >> this whole thing is one gigantic monkey trap … those who can’t let go, are really screwed … LET GO! … read a good one … debt is normal – be weird … choose life

  5. I never got over the power of delusion over normally rational people…

    What is it about HELOCs which make homeowners believe equity is nothing more than a temporary paper gain?

  6. The game is easy to figure out. Back when Enron ruled the stock market all rules were rewritten to show debt was something that was good for you. After those clowns broke up and took billions with them, the rest of the time card pushers knew the game… make people believe they could book future profits on today’s purchases. It is easy, “you’re richer than you think”, buy a house, prove you own it (bank really, but no-one is paying any attention anyway), get a let your house lend a hand, (booking future profits) and walla look how much you are ahead of the game….

    Sit back and enjoy the show… it is going to be one of those, “haven’t we seen this before?” epics. (fill in the blank from just about any country in the world)

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