Author Topic: $400,000 Line of Credit?!  (Read 3707 times)

Rightflyer

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$400,000 Line of Credit?!
« on: July 17, 2015, 06:40:33 AM »
http://www.cbc.ca/news/business/bank-of-canada-rate-cut-will-lure-canadians-deeper-into-debt-say-experts-1.3154931

Are other nationalities are as "fragile-minded" as Canadians are made out to be in this article?

Disclosure: I am a (somewhat embarrassed) Canadian
« Last Edit: July 17, 2015, 06:43:20 AM by Rightflyer »

Cycling Stache

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Re: $400,000 Line of Credit?!
« Reply #1 on: July 17, 2015, 07:17:52 AM »
I got a $250,000 HELOC because it was the start of the lowest rate bracket.  They were confused when I told them the purpose of the line of credit was nothing at all--just in case (it replaced my emergency savings a la MMM's article on springy debt).

That said--do NOT get a HELOC if you have any temptations at all.  It is WAY too easy to click a couple links and you suddenly have a few thousand in your checking account from the HELOC.  I expect never to use it, but even I thought about how easy it would be to access it.  But the time to get one is definitely when you don't need it. 

music lover

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Re: $400,000 Line of Credit?!
« Reply #2 on: July 17, 2015, 08:04:22 AM »
I have a $280,000 HELOC...simply because it was a lower interest rate than my mortgage at the time so I changed to that. Now that I'm debt free, I still have the HELOC, and in fact, could probably increase as it's based on my house's value. However, that's a non-issue as I haven't used it since I paid off the mortgage.

Rightflyer

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Re: $400,000 Line of Credit?!
« Reply #3 on: July 17, 2015, 09:27:23 AM »
It isn't the fact that he has a $400K LOC. It was the fact that he had run it up to the max and was looking for $50,000 more.

And when you read what they have spent it on...well.

What's more...when you read the original article that precedes this one...they don't have bedroom furniture.

???

MgoSam

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Re: $400,000 Line of Credit?!
« Reply #4 on: July 17, 2015, 09:38:01 AM »
That makes sense.

LeRainDrop

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Re: $400,000 Line of Credit?!
« Reply #5 on: July 19, 2015, 01:30:30 PM »
It isn't the fact that he has a $400K LOC. It was the fact that he had run it up to the max and was looking for $50,000 more.

And when you read what they have spent it on...well.

What's more...when you read the original article that precedes this one...they don't have bedroom furniture.

???

Holy crap!  Aren't they ashamed to admit how much they've racked up on the HELOC to buy a bunch of BS?  A $78,000 wedding, $6,000 for sovenir papyrus scrolls, and a $7,000 Chanel bag?  Here's the link to the earlier article:  http://www.cbc.ca/news/business/the-national-lust-for-home-equity-lines-of-credit-should-we-worry-1.3106533

Rightflyer

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Re: $400,000 Line of Credit?!
« Reply #6 on: July 20, 2015, 04:49:36 AM »
It isn't the fact that he has a $400K LOC. It was the fact that he had run it up to the max and was looking for $50,000 more.

And when you read what they have spent it on...well.

What's more...when you read the original article that precedes this one...they don't have bedroom furniture.

???

Holy crap!  Aren't they ashamed to admit how much they've racked up on the HELOC to buy a bunch of BS?  A $78,000 wedding, $6,000 for sovenir papyrus scrolls, and a $7,000 Chanel bag?  Here's the link to the earlier article:  http://www.cbc.ca/news/business/the-national-lust-for-home-equity-lines-of-credit-should-we-worry-1.3106533

Yes. It boggles the mind...renovating a brand new home???

"...moved into a newly built home and spent more than $100,000 on upgrades, including a custom kitchen, hardwood floors and a high-tech fireplace."

Just when it looks like common sense prevails...

"He admits he's antsy about adding to his debt when the family already has a substantial mortgage on their 5,000-square-foot house."

But then...

"...the place is still largely unfurnished and he's yearning to install a $40,000 glass railing for the staircase."

Of course there's a reasonable explanation...

"Without the glass railing, the look of my stairs is not doing it justice," he says.

 

Abe

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Re: $400,000 Line of Credit?!
« Reply #7 on: July 20, 2015, 06:12:22 AM »
My friends sold their super-fancy 4-story house in Chicago to some "rich" lawyer power couple who bought it in cash (>$1 million). The couple then proceeded to gut the kitchen (which had fancy marble or granite countertop, a stove with 8-10 burners, a fridge the size of my bathroom, and other fancy stuff I couldn't identify) because they didn't like the colors. They then proceeded to run out of money and file for bankruptcy. Talk about justice!

partgypsy

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Re: $400,000 Line of Credit?!
« Reply #8 on: July 20, 2015, 07:44:02 AM »
This must be a sign of some mental disorder.

zephyr911

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Re: $400,000 Line of Credit?!
« Reply #9 on: July 20, 2015, 10:15:03 AM »
My friends sold their super-fancy 4-story house in Chicago to some "rich" lawyer power couple who bought it in cash (>$1 million). The couple then proceeded to gut the kitchen (which had fancy marble or granite countertop, a stove with 8-10 burners, a fridge the size of my bathroom, and other fancy stuff I couldn't identify) because they didn't like the colors. They then proceeded to run out of money and file for bankruptcy. Talk about justice!
Paid $1M cash, and went bankrupt?

Rightflyer

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Re: $400,000 Line of Credit?!
« Reply #10 on: July 20, 2015, 10:26:47 AM »
My friends sold their super-fancy 4-story house in Chicago to some "rich" lawyer power couple who bought it in cash (>$1 million). The couple then proceeded to gut the kitchen (which had fancy marble or granite countertop, a stove with 8-10 burners, a fridge the size of my bathroom, and other fancy stuff I couldn't identify) because they didn't like the colors. They then proceeded to run out of money and file for bankruptcy. Talk about justice!
Paid $1M cash, and went bankrupt?

It's very possible. Your principle residence AND your Registered Retirement Savings are exempt in a bankruptcy in some places.

zephyr911

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Re: $400,000 Line of Credit?!
« Reply #11 on: July 20, 2015, 10:28:39 AM »
My friends sold their super-fancy 4-story house in Chicago to some "rich" lawyer power couple who bought it in cash (>$1 million). The couple then proceeded to gut the kitchen (which had fancy marble or granite countertop, a stove with 8-10 burners, a fridge the size of my bathroom, and other fancy stuff I couldn't identify) because they didn't like the colors. They then proceeded to run out of money and file for bankruptcy. Talk about justice!
Paid $1M cash, and went bankrupt?
It's very possible. Your principle residence AND your Registered Retirement Savings are exempt in a bankruptcy in some places.
Oh, duh. I should have thought of that.
Fairness would include some kind of limit on the home itself being sheltered... otherwise you get situations like this, where idiots blow huge amounts of money on the home and still get to keep it while writing off all their debt.
« Last Edit: July 23, 2015, 08:43:51 AM by zephyr911 »

Abe

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Re: $400,000 Line of Credit?!
« Reply #12 on: July 21, 2015, 01:21:22 AM »
Yeah. I was amazed that they got to keep it. Was hoping to buy it at foreclosure and rent it out as two units.  Unfortunately the top one is missing a kitchen now. They didn't even save the old stuff for donations! Some people just suck.