Friday, February 15, 2008

HELOC Heaven - Montville Version

Well I finally found someone that took advantage of their HELOC - this will probably not lead to a short sale - but it is a great example of someone using the house as a second (or third) income.

This house is located in Montville, NJ.

Judging from the kitchen picture the money was not spent on the property...

Also no renovations listed in the description -

Great opportunity to move into Montvile, NJ. Rated by Money Magazine as one of the Best Places to Live. Large EIK, Extra Large LR, Large Fenced in Level Yard with Shed and Tree House, 3 BR, Loft/office, Full Floored attic and Full Basement
So here is the financial data -

  • Purchased Sept 2001 - $187,500
  • Mortgage Oct 2001 - $150,000
  • HELOC May 2004 $20,000
  • HELOC July 2005 - $100,000
  • HELOC August 2005 - $193000
  • HELOC May 2007 - $220,000
  • For Sale Feb 2008 - 397,000
If they get their full asking price with a standard 6% commission - they stand to lose $34,320 during the great housing bubble. This owner could have made over $185,000 on this investment during the run-up. Wow - that's huge amount on such a modest house. But they chose to HELOC it away.

Remember they must have been able to save at one time - they managed $37,500 for the down payment. But since saving was so 90's, they had to use the house as a second income and made an extra $36,600 per year. I hope they had a good time.

No comments: