NJ Heloc Heaven! The First One... Finally

Well, I finally found someone in NJ who was able to be in HELOC heaven - I hope they enjoyed it. The house is located in Parsippany, NJ.






Here is some house info -

ALSO FOR RENT!!

The web address for this property is: http://www.ISellRoxbury.com/654648

$416,000

Description:
You'll need to bring your checkbook for this one! A marvel of sun, light and space fill this amazing townhomes open floor plan. This desireable Hamilton model greets you as you enter into the ceramic tiled foyer. This contemporary style townhome features a decorators touch and boasts many upgrades including new cherry hardwood floors, 2 remodeled granite bathrooms and a granite filled kitchen. Enjoy cooking in the eat-in kitchen featuring cherry cabinets, a stainless steel backsplash, newer appliances and a ceramic tiled floor. You can easily entertain family and friends in the formal dining room or in the living room with a sliding glass door out to the expanded deck. Your new home has 2 well appointed bedrooms, a spacious family room, a loft perfect for an office/den, full basement and one car garage. In close proximity to Powder Mill’s pool, tennis courts, clubhouse, playground, major commuting routes and shopping makes this home available today and gone tomorrow.

This is one of the nicest properties profiled here. A perfect Pergraniteel Bubble House! Here is the financial history of the property -

• Purchased in Feb. 2005 for $380,000

• The first mortgage was Feb. 2005 for $304,000 ARM with Weichart Financial

• Same day HELOC for $57,000 also with Weichart Financial

• HELOCed again Feb 2006 for $70,000 with USAA

• Another HELOC in Dec. 2007 - this time for $130,000 with USAA
  

The owners were able to put 5% down - $19,000 - which is pretty substantial sum of money. Especially during the Great Housing Bubble when people were often putting 0% down. This means they either they saved, they received it as a gift, or made some profit from an earlier sale.

With the standard realtor's fees of 6%, in this case $24,960 they would clear $391,040 if they received the full asking price - while only being $11,040 more than the original purchase price it is still a net gain. However, the owner chose the HELOC heaven path and upped the original $57,000 HELOC into a $70,000 one and then a $130,000 one. The use of the HELOC amounted to taking out $73,000 out of the house in 3 years - that averages to $24,333 per year. That is not too bad when used as a second income for vacations and cars.

Now with the original mortgage of $304,000, the $130,000 HELOC, and the $24,960 in realtors fees they (or the loanholders) will lose just $42,960. That is a pretty hefty loss in just 2 years.

My guess is the owners are living elsewhere and are not in a short sale mode yet - or they would not be advertising the possibility of a rental. This is common in other markets (like Irvine) - but I have not seen that much in Northern New Jersey yet...