Quote:
Originally Posted by chemgear
http://www.cbc.ca/news/business/the-...orry-1.3106533
For the Toronto-area couple, it all started back in 2009 with a lavish $78,000 wedding.
Then came numerous overseas vacations. When touring Egypt, Ali bought four souvenir papyrus scrolls for $6,000. In Italy, Haji picked up a $7,000 Chanel bag.
After the birth of their daughter, the couple 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.
The wedding, trips and high-end purchases were made possible with cash from two home equity lines of credit secured against a couple of investment condos the family owns. The debt from those loans now totals $370,000. They also recently got an unsecured $30,000 line of credit to buy solar panels for their new house.
"We are addicted for sure. Who wouldn't be addicted to something so easy [to get]?" says 35-year-old Ali about the free-flowing lines of credit that have enabled him to splurge on the finer things in life.
But the place is still largely unfurnished and he's yearning to install a $40,000 glass railing for the staircase.
"Without the glass railing, the look of my stairs is not doing it justice," he says. |
Kind of a stupid story.
They're in Toronto where the average detached home is now over $1.0 million. Doesn't say how much their home is worth or what they paid. Just a lavish number, $100,000 in upgrades. They sound like the type of people that live in at least an average house, so it's worth over $1.0 million.
They've spent about $370,000 in HELOC's against (a couple) of condo's they own. So, let's say that's two, so $185,000 on each. With HELOC's you can borrow 65% so assuming they've got two condo's and if they've borrower the MAX (meaning they could be worth a lot more) each worth approximately $285,000, ($570,000 against $370,000 in debt) or $200,000 minimum in equity from two condo's.
Don't know how much they make, don't know how well off their immediate family (parents are), etc. It's a dramatic story shy on details because it's more interesting that way.
It ends with this. . .
"If you get a line on this [house] and God forbid something happens to me or [my wife] and we are unable to sustain our lifestyle or stream of income that we have, then we would be in trouble and that may lead to us losing this house," says Ali.
Which means there's currently very little debt on their primary residence.
I'm fairly frugal, only debt is on mortgage and a line that's been used to invest in equities, own all vehicles and trailer outright. I have plenty of savings and investments that could (if accessible) wipe out all of the LOC and most of my mortgage yet these people look like they could have more equity than I do. . . I mean if housing prices tank they could be in trouble, but really only if they take out all the equity of their primary residence too. Not to mention the lack of details on their investments, income, etc.
A quick summary of me in the globe could say "Calgary family doesn't follow the herd" when in reality I'm potentially much worse off than these people and tons of others that may spend like them.