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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: SouthFloridaGuy who wrote (5735)	10/1/2002 11:01:37 AM
From: J. P.	Respond to of 306849

My best friend just tapped 50K in cash off his home equity to buy the biggest Lexus SUV. Of course, his home has appreciated from a purchase price of 250 in 1994 to 750K now(it's a 3 flat in Chicago), so he's got about a half million of appreciation to play with. In fact, this equity line of credit has financed quite a nice lifestyle for him including another house (in a very toney area), business loans, home improvement loans for his new house, and of course the Lexus.

To: SouthFloridaGuy who wrote (5735)	10/1/2002 11:12:45 AM
From: patron_anejo_por_favor	Read Replies (1) \| Respond to of 306849

Looks like ABN AMRO came up with a "residential real estate crash" product of their own...financial innovation at it's finest!<G> abn-zertifikate.de

To: SouthFloridaGuy who wrote (5735)	10/1/2002 12:38:57 PM
From: JoanP	Read Replies (1) \| Respond to of 306849

>The moment people begin to tap home equity to buy an SUV, it becomes an investment.> This is a way of financing purchases in order to write off the interest on tax returns and is a financing option available only to homeowners. This trend has been growing ever since interest payments were no longer deductible. My accountant recommends using home equity lines of credit for large purchases. Not only do you get a lower interest rate, but you can then deduct the interest on your tax return. Most of these are purchases people would have made anyway, but are financing them differently so they can deduct interest that otherwise would not be deductible. I'm not making a judgment whether this is wise or not, just noting that it is a trend that I think will continue and probably accelerate in the future.