Our Waterloo Moment

by Emily · 5 comments

in Money & Spending

It was August, 2007.  I walked into the office at our business to find my husband and another well-dressed gentleman rifling through a fairly large stack of papers.  Papers that required my signature.  Because we were taking out a line of credit against the equity on our house.  In order to finance the second franchise location.

It was, in hindsight, our point of no return.

They call them HELOCs.  A word that rolled off many tongues a few years ago.  Want that new car?  Just borrow against your house.  Need to consolidate some credit card debt?  Sign on the dotted line.  Feel like taking the fam on a great vacation?  Just call the number at the bottom of your screen and someone will be waiting to assist you.

It’s amazing how many of us fell for it.  Like equity was something concrete and measurable.  You might wonder how the great and mighty HELOC played into the foreclosure crisis.

From our perspective, we may have been able to keep our house through our bankruptcy, had we not had the HELOC.  Having more than one mortgage on your residence disqualifies you.  So all those people out there who used the line of credit as a way of paying off multiple credit cards and then lost their income?  Homeless.  It seems unfair.

For those who took out a line of credit for vacation, um, I have a little less sympathy.

Back to August.  I wish I could describe to you that feeling in the pit of my stomach, that no good would come of this.  I wish I could tell you my husband had a full appreciation of what he was risking.  I wish I could say I pulled him from that office and had a long talk with him.  I wish I could tell you I didn’t, at that moment, feel blindsided.

If wishes were horses….

So what about you?  Do you have a moment in your past that you look at and say, “if I hadn’t done __________, things would have been incredibly different.”  Maybe it’s not a negative moment, but a positive one.  And do you have any opinions about equity loans?  Have you been burned by one?


1 JanB May 17, 2010

We have a HEL, too. We consolidated debt and then kept right on spending. Idiots. But at least we have now seen the light.
.-= JanB´s last blog ..Big Time Murphy =-.

2 boucning back betty May 17, 2010

Hum, good post. I’ve posted before that even with me making the best decisions at the time when it came to money and other things (And I did do research, weigh pros/cons, etc) I still had just an unbelievable string of bad fiscal luck which did end in my BK. Probably the dumbest thing I did was take money out of my 401K to try and stem the crushing flow of outgoing money.

Hindsight is a wonderful thing, all we can do is learn from the mistake and move on.

3 Kathy May 19, 2010

Mine was buying interest in a timeshare after attending a presentation with my husband to get the “free gift.” We actually drank the Kool Aid and bought, just as we were about to pay off all of our debts.

We never used any of our time and it was money down the drain, money that we could have used for other things or simply just saved. It was also a frivolous purchase that set us back from being debt free (except for the mortgage.)

Hindsight is always 20/20.

4 Kirsten May 19, 2010

We bought a house just as the market started coming down. We got a 30-yr conventional fixed, bought well within our budget, and did everything right, at the time. Then my husband was injured at work and lost his job. We are listing our house for short sale very soon, but will more likely be looking at foreclosure or deed in lieu, because we're in one of the worst markets in the country.

If we could go back in time, I think we'd choose to move to a bigger apartment rather than buy a house. But at the time, it was a good decision.
.-= Kirsten´s last blog ..Perfectionism =-.

5 Kelly May 19, 2010

Way back when in ninth grade, we ahd to choose a foreign language to study. I didn't want to take Spanish, so I took French. And then I took French all the way through highschool, and when I continued into college, I continued studying French. When I wanted to study abroad I came to France, because that was the language I had been studying. And it was in France that I met my dear hubby! So, thinking back, the whole direction of my life is because I didn't want to learn Spanish when I was 14 years old.

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