Is It Alright To Use A HELOC For This?
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- Опубліковано 12 вер 2024
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I love Dave Ramsey taking instant ownership for his website and looking into the posting.
Facts, Dave lots of integrity 👏🏿
@@termsb7635 link?
That’s not what it says.
His website could’ve been hacked
More like throwing his workers under the bus before he even had the facts. Really a great boss right there…talking about “punching” his content people.
The cult leader can’t be wrong!
This is why Dave is superior. Complete and total accountability. Amazing
My unclu used to say: " you borrow temporary, and pay back forever"
Nailed it
Rates are sky high! Perfect time to do it!
Or so the banks will say
Before even watching- No.
After watching and having dug myself out of debt, it's 100% true what Dave said that spending your Own money vs Borrowed money, does Indeed change your whole mindset and perspective.
Agreed. Wife and I are in the same position, in baby steps 4-6 while building out our basement at the speed of cash only. You make different decisions when it's your bank account paying the balance.
2nd lien Heloc makes sense to pay off existing debt, like mortgage or high interest credit cards, but it's a line of credit, not actual debt. Used to consolidate existing debt to avoid multiple high interest rates or make large principle payments on your mortgage to reduce the amount of total interest you'll end up paying.. Any other type of loan is going to get you.
He make 145k, but have no money?
How can people make that much money, but are still broke?
Some people spend it as fast as they make it
Not hard at all to spend $145k before taxes.
Lifestyle creep
@@edhcb9359 Not where they live. You can get 2k square foot houses for like 300k.
@@jimmymcgill6778 Still doesn’t make it hard to spend 145k before taxes.
This guy has $1000 to his name and wants to do $40k in upgrades to his house.
The American Dream.
Yeah, I was laughing at that one myself! Clearing $125k, and only has a grand to his name??? Sheesh! Dude, what happens if you lose that job next year? Hope for the best, but plan for the worst!
That said, it's generally not a good time to take a loan and do a reno. Why? Interest rates are up, as are material costs. Pay your $30k debt, and do the reno in 2024.
@@nephetula Not to mention a recession next year where the chances of losing a job is increased.
The irony is that people who can pay for $40k in upgrades without borrowing would probably look at the same house and say that it's fine the way it is. HGTV is evil folks.
Q "Do you have any money?"
A "Oh look, a squirrel"
What do you have in your wallet .... A squirrel....I think he's got rabies
🤣🤣🤣🤣
I'm doing a remodel with some substructure repair myself. Paying cash for materials, and paying H on my dear wife's patience. But it is all cash. Also, an education for me. You don't own a house built over 60 years ago, it owns you
Should I sell my house because the price is high, and then also buy a new house while the price is high. We live in a place where minimum rent is 3600$ a month ?
come straight to point. making 125k a year and no any money saved , i'm making $75k year and saved so far $230k
Everyone goes at their own pace. It largely depends upon how old you are & your circumstances in your younger twenties.
If you are 50 years old saving $10k a year for 20-25 years, that’s impressive, but just standard.
If you are 25-35 years old, very impressive.
Good for you either way!
Depends on cost-of-living in your area and how many kids you got and how healthy you are and your competency and luck and and and
First, most people will take out $75,000 (as of August 2024, the monthly payment for a $75,000 home equity loan with a 20-year loan term would be around $653.) half of it will be used for things not considered home improvement, trips, bling, expensive purse/jewelry, fishing boat, RV, giving family money they are not going to pay back. You will pay back about $80k in interest. Just asking the question is a lack of knowledge about how money works.
That caller is probably regretting making the phone call
90% of Americans think this way! It is unbelievable. Thank you for the great advice and direction over the years Dave.
The guy called and asked in good faith. He wasn’t being a jerk. He was misguided and looking for guidance. It costs Dave nothing to be gracious while also speaking the truth. When he chooses not to it’s sad how many people here revel in it. How many people might have called in and gotten the help they needed, but were scared off by this kind of treatment in this and other videos? I’d never call in and risk that. Grateful for the videos to watch and all he’s helped, but no thanks.
You are right that the guy did ask in good faith and Dave could have been more gracious. The facts are man wanted to take HELOC which is more debt while still trying to pay off another debt. I could understand if it was more for medical reason like life and death. The only grace that would be beneficial to him at this point is from Jesus Christ. I wish him the best
Making $125K and broke!! Dave kept asking how much money does he have and he said "uh huhm, we have about the 1000 dollars and we are paying off debt" I bet he doesn't even have the 1K! Then he wants to take out a HELOC and add more debt on top of the 30K he's trying to pay off now? Sheesh!!
Asking Dave about using a HELOC is like feeding a lion a cabbage for dinner.😄
For some it could make more sense than buying another home with a higher mortgage. If you bought at the bottom of the housing market it may be a better deal. You could put 30K-40K in renovations verses moving into a substantially higher mortgage. To buy a home with the equivalent upgrades might cost you 100k-200K more.
Understand in this clip we are talking about renovations. But If a roof needs replaced?
My house needed a new roof and main sewer line replaced. Repairs that could not wait. Also a property tax bill coming up. Total cost was $24k. I didn't have enough saved at that time, so I got a HELOC and took out $30k. A variable rate between 3 and 4 percent. I did not take out any more money from the HELOC, and it took me 6 years to pay it off. Yes, I paid a lot in interest, but it did save the day. Today I have savings and an emergency fund. No more HELOC for me.
This dude didn’t even read those articles. There are articles discussing people leveraging homes in various ways on the Ramsey site. It says about 100 times that it’s a terrible idea and not recommended.
I agree with Dave - he's probably going to do it anyway. We've done a number of renovation/ remodeling projects. We always saved and used cash. NO DEBT!!
The website says nothing about supporting home equity loans. There are however, articles that explain what home equity loans are and what they are commonly used for. They probably just have those to rank better SEO wise.
I popped some corn 🍿 prior to listening to this call. 😂
My back deck complete tear down and rebuild with Trex was 8k. Paid cash but hope nothing breaks for a couple of months.
I went to check the site when I heard what the guy said. He read into it.
What about a HELOC for paying down your mortgage?
Right he didn't address anything
I need $50,000 to pay off medical bills and credit card debt. What should I do?
I make more than this guy and I am going to be doing the basement all myself that I have to only pay for materials. 100% self taught skills from the internet. Almost anybody can do it.
This is good advice (under ideal conditions), but not everybody makes $125,000 a year. Some of us are homeowners that need a new roof put on, but only make less than $40,000 a year.
In that case, wouldn't an equity line of credit be the way to go in order to prevent further damage so that the value of the home doesn't go down hill?
Depending on the size of the home, a roof could easily be around $13k.
If I go to sell the home, I won't get nearly as much if the roof has not been replaced. Furthermore, there is a leak due to the old gutters not draining the water properly, which resulted in a patio ceiling leak that has resulted in part of the drywall ceiling falling in.
Home repairs and updates are inevitable after living in it for 15 like I have. Homes tend to go up in value. However, if there are extensive repairs that need to be done, then the value of the home can plummet.
Save money for repairs and renovations. That means work extra hours for it.
While I genuinely appreciate the time you took to offer sound advice, and I have already given the idea of working a second job serious consideration in the past, working full-time and attending college to complete graduate school feels like having two full-time jobs already. This leaves little extra time for working a second job that will pay any decent money to save up for repairs that require immediate attention.
By the time one finishes a 40-hour workweek and then works another 20 to 30 hours part-time, there isn't much extra left on the table after the usual deductions and Uncle Sam takes his cut.
I'm trying really hard to work 40 hours and finish my MBA program so I can break free from the $16 to $18 per hour rut. It is quite challenging to accumulate any reasonable cash surplus on $500 (or $2k a month) each week to pay the mortgage, gas, water, sewer, electric, money for gas and auto insurance and maintenance, groceries, etc.
It has been said that the federal poverty line is around $14k per year; I think they need to reconsider that figure. It is hard to get by on $34k a year in 2023 (and that is before any deductions). They ought to make it so that you pay your usual taxes for a full-time job but make the second job tax-free (or reduce the taxes at least) to help those making less than $40k a year get the most out of their money.
Not to go on a tangent, but the government needs to start putting the taxpayer first and put the rest of the world second, instead of buying the latest military toys and giving money away to fight issues and provide financial support outside of our borders. If the federal government has tax money to waste year after wasteful year, then they don't need to raise my taxes. Local taxes, yeah, sure. These go to sustain emergency services and other stuff needed for community upkeep. It’s funny how these fat-cat politicians in positions of sinecure have it made living the easy life without giving much thought to solving issues here at home.
There was once a time when a high school diploma, a good head on your shoulders, and a solid work ethic was enough to get a middle-class level job. Not anymore!
That’s just my two cents…
@@widescreen1272 Yes, agreed. But if it comes to a roof in dire need and you don't have the replacement cost in cash, what suggestion do you offer? Become a roofer? Have the half you do have cash for done, and do rest later. Not to mention. If the roof is so bad that it is a threat to the asset value of the home, and you have 70% of the cost in cash, but that payment would delete your rainy day savings for all other possible needs, what should one do?
Caller making $120K take home----->I earn half that gross, feelsbadman. Him still owing $30K and I'm debt free, feelsgoodman.
0:25 My thoughts exactly, without even watching the video.
Coming straight to point: do this this this.... done. loved it. great tips ✌
Broke and deeply in debt and him and his princess wife are discussing a $45k house remodel….. can’t make this stuff up.
Haha, I also thought he probably has a wife that watches too much HGTV and is full steam ahead on remodeling the house no matter how much further they are plowed into debt.
I'm wondering if it's a sitcom?
Dave only makes money on mortgages and refinancing. He’ll never agree to HELOCs
So he bias it shows considering he never gets to point or offer othe options
Dave should invent the DRELOC then. Dave Ramsey equity line of credit so then this guy can get his new basement
Before Dave says No to a HELOC, he should ask if they have a bonus coming, or an inheritance, or what their 401k looks like. This guy could get a 2.5% HELOC for a year to pay off that personal loan, then later look into doing a basement. In fact, stud and sheetrock the basement yourself with $1000, paint the basement floor, throw a rug on it, and hang some quilts from the ceiling and use it that way for 5 years. Your home tax value stays the same and it’s usable until you have $ to add a bathroom and ceilings.
What about getting a HELOC at 8% to pay off a 24% credit card and a couple other debts that are at a higher rate?
Do the math and start saving 2-3% of your home value per year for repairs and renovations. It sounds like a lot, but trust me, it can all disappear overnight if you have some major appliance, foundation, or storm issues. Better to have some saved up than try to scramble and pay interest on repairs later.
Blows my mind that some people can't answer a simple question. HOW MUCH MONEY DO YOU HAVE?
"uhh well we weren't really thinking right away" WHAT? NOT THE QUESTION
"Hi Dave, I know I shouldn't do this but will you please tell me what I want to hear?"
I’ve got my soda and chips ready to watch
Lol the website does not say that. It matter of factly says what you can use a HELOC for.
Hasn't worked for the company for a year yet but wants to remodel the house.
He’s hopping all over the place 🤦♂️🤦♂️
Foolish people borrow down / smart people save up.
Nah I checked the website, it says "Should you? Heck No!".
😂 ill never understand why you have any callers about getting a loan. I've seen your content for all of five minutes, and I know no matter what your website says. You are going to say no to anything involving any kind of loan except a high equity home loan.
I do mostly agree with that philosophy. But I have an exception clause in my rule book. So it's not an automatic no. But the vast majority of reasons people take loans it becomes a no. It's similar enough. Whenever the loan is concluded. I need to be in a better financial position than I was had I not taken out the loan. And, I need an escape plan. Ideally being able to cancel the debt in hours. But a few months is acceptable to me. Even if I had to hit the escape button immediately after signing papers. No escape plan. No loan.
Contrary to daves philosophy, there are loans and situations that can do this for you. A home loa often does as example but it violates my escape clause topically. It's just not very common. The overwhelming majority of use cases for debt hold you back financially.
Itty bitty constructive feedback for this channel - Turn down the intro volume. It's always substantially louder than the speaking audio. I get blown away by every intro.
For sure!
John talks like he got no money... Dave needs to pay him more.!
would if i borrowed 30k -heloc, and then purchased a fleet of 20 e-bikes and rented them out at the local unversity or down at the beach....might pay the loan back in a year or sooner .....possibly make a little coin
Or fail and take a loss and still have the loan...
I just read a couple of mortgage broker channels that are selling HELOC loans to pay off your home faster. Makes no sense.
Wouldn't it make sense if the APR on heloc is lower than your mortgage
The guy only saw and read what he wanted, it clearly states in the paragraph..."Is a HELOC a Good Idea?... Heck No!"
Seems pretty clear to me, but this guy must not have been listening very long to know the DR mantra.
Good one. Yes on the borrowed vs real money.
Haha $1000 in savings?!?!?! And your wanting to take out a heloc to fix up your basement??? This is why Dave is in business because people are idiots with money
If your roof was falling in, and you didnt have any other means, sure but other than that no.
Great to have for emergencies, I have a 50k one sitting there costs me nothing to keep.
My emergency will be down payment on another rental.
Dave says no. Let the roof fall in all the while saving cash. 😂
@@wldktz1 Yeah, let the roof fall in. Dave Ramsey doesn't live there.
Sell the car, get rid of the wife
Do you know how expensive it is to get rid of a wife. Ask a few divorced guys.
@@kenfrank2730 good point
Shortest way to become a millionaire work for 30+ years according to Dave
Safest way and hey if it gets you there why not rather be a 70 year old millionaire than a broke 70 year old
He used real estate, but preaches to others no debt. He used debt, but over leveraged himself. Most of the people he deals with cannot carry good debt, so he treats them accordingly, but people use debt to make money, nearly all businesses operate like this. I carry good debt that makes me monet, rentals. As it goes, they snowball, and get paid off quicker. Rinse repeat.
@@relsidebr4785 Because the majority of people don’t keep the same job for longer then 10 years it’s a different world. Even if you want to keep that job for 30 years you could make it 19 years and get let go. Everything is a risk even keeping a stable job is a risk now of days.
@@neilsmith9066 I left a $130K private job to take a $65K gov't job.
really hard to get "let go", from a legally mandated position
@@aolvaar8792 congrats for you
Ryan is not the sharpest tool in the box 😂😂😂
I've been trying to sign up for Ramsey plus as a Canadian anyone have any advice on what I should do, my debit card is getting declined due to us being from the TD and bank that is operated in the states and Canada
Perfect time to get a HELOC with interest rates sky high. Always a wife wanting to do something with a house.
I'm sorry you hate women so much K Roddy. You might want to call in to Dr D vs commenting on DR's posts.
@@truthseeker6370 No hate just observing that trend. Wife+House= incredible bad financial decisions.
@@truthseeker6370nothing wrong with the wife wanting to do something with the house. Made our value go way up for a really nice profit.
@@siegfriedbraun5447 And so many more where the opposite happens.
We have friends that have always made more than us that have continually borrowed against their equity to do renos and now owe a large amount on their home.
We paid ours off a couple of decades ago, gradually worked on it and now own a pretty expensive property freehold.
I no longer have to work and he will likely work until he dies.
Interest rates on HELOCs I have closed recently are between 10-18%
A Heloc should be used to get out of debt. And have more disposable income. Put all of your monthly income towards repayment each month. And then using that account to pay bills.
Putting the human into the equation is very smart. You can come up with the perfect plan, but if it isn’t executed exactly by a machine and you put in human variability it will quickly fall away from perfect.
SELL THE CAR!!!!!!
I guarantee that is not on his website!
It's easier to use a credit card than it is your cash money .I think twice when using my cash.
HELOC’s are predatory hands down. You take out money against your home and paying high interest. It snowballs so you are using your heloc to pay back your heloc, I’ve worked in a hand and seen it first hand.
You're half right. They're both predatory and asinine.
I have one with zero balance for emergencies like down payment on another rental property. But most people will use for consumer debt. Saying a bank is predatory is like saying water is wet, it's up the the consumer to be responsible.
I used one and had the opposite experience. I basically had sn investment property that I got a HELOC on in 2018 or 2019 at 4.25%.and I maxed it out to buy another property. Initially the monthly payments were high, but unlike a mortgage each payment made the following payment lower. I eventually got a traditional mortgage on the new property right at the point property values peaked before the rate hikes and paid off the heloc.
I can see the potential danger in them, for example I could have easily used it for a series of expensive vacations, but if you're responsible they can be great.
Snow balling debt, only $1000 to your name and you want to take out a 50,000 HELOC? Yikes
Hasn't even worked there a year and is considering refinancing for renovations
Dave is very humble!!
It could be a scam that broke into your site and posted it
Ok first off the guy starts out saying he wants a home equity loan ……. The TITLE OF THE VIDEO SAYS HELOC which is a home equity line of credit …. HELOC and home equity loan is 2 totally different things just an FYI
4:30
In what world do you make 125k and have only $1000 to your name?!
Take out a fixed HELOC and buy a rental property. Now.
Hey Dave should I take a heloc out to go on vacation?
I looked up the website page the caller was referring to. Hasn't been updated for a month prior to this call.
NO. It doesn't recommend HELOCs for home renovations haha Big misunderstanding
Dude needs to pay off his debt and then learn to do some things himself to save money. 25k for a basement is ridiculous
$25K isn't really ridiculous. That's probably underestimating for that job. You can easily spend 15K on a basic no frills kitchen!
I stop giving advice people don’t listen. They’re going to do what they want to do anyways.
someone is going to get fired!!
Nope. The caller simply can't read. Plenty of other comments here explaining why.
@@amireallythatgrumpy6508 congrats, I don't spend my free time reading thousands of other people comments. I don't read other comments except to mine. 😂😂😂😂😂
They can't spell Sioux either😅
thats tough,only 125k,,somethings wrong ?
Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.
People believe their currency has the worth it does because they have no other option. Even in a hyperinflationary environment, individuals must continue to use their hyperinflationary currency since they likely have minimal access to other currencies or gold/silver coins.
Inflation is gradually going to become part of us and due to that fact any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire.
I've tried investing in the stock market several times but always got discouraged by fluctuations of stock value. I would be happy if you could advise me based on how you went about yours, as I am ready to go the passive income path.!!
My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Just ran an online search on her name and came across her websiite; pretty well educated. thank you for sharing.
It takes John years to save up to have a porch fixed?
Did you listen? He said they have other higher priority things to save for first. 6:52
Watch the video again. He said the project will fall on his priority list meaning it's not a top priority now.
@@MrTmenzo For me, something that is wrong on a post, is a high priority.
@@jimmymcgill6778 Must have an unstable job?
@@WoodUCreate John doesn't.
A rotten porch is a priority.
Imagine going to a dnc rally and asking if you should buy an American flag or donate to local police
Get out of debt but dont invest and make money. Boomer ignorance.
who would pay that caller 160K a year? and he has student loans, young.... FAKE CALL FROM THE BACK ROOM. to make the host look Brilliant.... Next
LOL
You're that idiot that doesn't realise Americans are as dumb as a brick, aren't you? NEXT.
@@amireallythatgrumpy6508 I know full well of that. check mate
@@bobcostner2238 You clearly don't, as you're one of them. That's not how check mate works.
Somebody just got fired
Nope. You clearly weren't paying attention at 4:40. Turns out the caller simply can't read!
✝️🙏
This guy will not listen to Dave. He’s going to use his HELOC !! He’ll be calling back in one year and say he’s in $50k in debt now !!
This guy never got to the point spends all his time babbling, guy didnt advise on any, BS advise
WHOOPS
Dr. Deloney bounced up SO fast 😂 also can you imagine being the new guy that posted on HELOCS at Ramsey solutions 😂 wooooo🥵
It's a little too narrow minded to say there is never any good time to use a HELOC. Dave is generalizing too much.
Agreed I have a 50k one sitting in the bank with no balance. I keep it there for emergencies, like finding the perfect rental property and needling the down payment right away. It's a good tool to have in your toolbox.
SIOUX