Home Equity Lifestyle
The Big Picture has some pretty good quotes about the intention of home equity loans and outcomes with them.
I have got an huge grudge against Greenick. The launching of credit bubbles changed how the world was supposed to work, and it did so at the peril of the economic future of young. Unfortunately, I was young and not yet established in a home.
People can go on about people being greedy and/or foolish for buying homes at the price they did, but how it works is that you start by trying to be responsible and save a proper downpayment. Meanwhile, the declining interest rates are putting housing costs up so much faster that you can possibly save, well, you figure it will stop in a year. And it doesn't. It makes no sense because what declining rates do to housing affordability and personal wealth empowerment is poorly understood. Houses almost triple from when I went back to school and managed to save a downpayment.
But, I had the you are supposed to pay back the money and paying extra is a good thing training/beliefs. The fact that instead of reducing debt people increased, a lot, it is insane.
It seems a lot of people were spending about an extra $1000 per month increasing their mortgage debt, if people are increasing their morgage by $100k over 8 years of ownership, that's about what they are doing.
I can not imagine tightening expenses by $1000/month, and that would just bring these people to living within their means. They still wouldn't really be attacking their debt.