My FIL owes something like $800K on the house he bought in the 1960s for under $50K. He has refinanced a dozen times to pull money out for home renovations and other various things. The home is probably worth a little over $1M, so he's not underwater, but he does not have a lot of equity and he does not expect to ever have it paid off (he's in his late 80s). If the market ever crashed like in 2008 he could be in trouble.

i owe 1.3 million on a property that i bought for 800,000. we got a construction loan and built a house, and refinanced into a conventional mortgage once it was finished.

A lot of people tap out the equity in their home to pay for their kids college tuition or renovate, especially when they want to be in their homes for the long haul; at the time, the rate for refinance was presumably lower than obtaining private loans. That part makes sense. The part about crowd funding does not.

Someone I know bout a lot for $500k 15 years ago, built a house and now took out a loan for $1.5M on it. Very strange, I think it’s to pay for private schools. An executive assistant who worked at my office one did the same thing, also for private school tuition.

When we bought our 1950s colonial in Bethesda, we saw at closing that the owners still owed hundreds of thousands of dollars on it -- despite the fact that they had bought the place almost 40 years before.

Turned out they were treating their house like an ATM, taking out HELOCs, presumably to meet expenses like college tuition for their kids.

I found it kind of irritating, for some reason, that through an accident of geography -- the house was close-in in what became an increasingly desirable neighborhood over the years -- they were getting a big pay day despite bleeding the house for money over the years. They certainly didn't spend it on maintenance, unfortunately -- so we got stuck with those costs, too.

Refinanced or home equity line of credit, and now probably can't afford payments due to job loss or retirement. Probably living larger than they could afford earlier or helping too many dependent family members.