Get a small HELOC, so you could see how it works. If it goes well, get another one, and if that one goes well, step it up. Paying your house in less time saves tons of money. HELLO!!
Sammy from Alabamy once you pay off your first HELOC, you can get another one from the same bank or another lender. Always compare rates so you can get the lowest interest rates. Once you have experience with HELOCS, you can better determine if you can get a bigger one. Look at other UA-cam videos on this subject so you can get a better understanding of how they work. Good luck!
If you are financially responsible, then the heloc opens up massive opportunity. I think the problem is people who view credit as money they own, or people who use their heloc on depreciating purchases and not using it to make or save money.
Exactly. It's an awesome financial vehicle if you manage it responsibly. If you use it to pay towards unsecured debt and don't change the habits that got you there, you're digging a bigger hole with an excavator.
In the US, heloc terms are specified in the Home Equity Line of Credit Agreement. The terms cannot be arbitrarily changed by the lender. I've never seen a heloc agreement that allows a lender to call the loan due. They retain the right to freeze the account under certain circumstances such a late payments, extreme drop in value, etc. The risk is many times lower as a 1st position than 2nd.
Yes, in the USA, banks can call the loan due on a HELOC. Banks were stealing people's homes during the crisis by doing this. People don't realize that they give up certain protections when they take out a HELOC on their primary home.
@@micahwatson9017 That's completely wrong. Most banks were accepting $500 - $1,000 on tens of thousands of dollars that were owed to them when the borrowers short sold or short refinanced. Again, they cant call the loan due. They can stop you from drawing and they can limit your credit limit but they cannot arbitrarily call a heloc due.
I talked to 3 banks last year around the same time this video was published. None of them were variable interest rate fir HELoCs. I think you guys are talking more about the predatory portion of the HELoCs. What you should probably do is show how to utilize the HELoC correctly after showing the cons, you're only showing the cons. You guys actually said that moving debt to a lower interest rate is good, but bad in this case, its not if done correctly. Most credit cards people only pay interest on for heavens sake. There is no rule that you ONLY have to pay interest. Its not about getting a lower payment. Its about paying more principle rather than interest. If you want to rail against people going for lower interest rates, rail against those who refinance at year four of a thirty year loan for a slightly lower interest rate and lower payment. at year four, do the math, most people up to that point, have paid between 75 and 80% interest. then they refinance and restart the cycle? this video is disappointing.
HELOC have variable interest rates in the U.S if you take one out to do improvements on your house they count the same as a mortgage and you can deduct the interest like you would a mortgage . I used mine for that purpose. I also paid it back as quick as I could because of the variable interest.
Not exactly, HELOC interest is calculated on avg daily balance in most cases, whereas credit card if paid in full each month incurs no interest, and includes points if you are smart and get a card with some cash back.
First position HELOC is the way to go IF you have positive cash flow and don't spend that positive cash flow over the course of the loan. You can pay your mortgage off MUCH faster than any conventional loan.
I had a HELOC loan, interest started at 4% and went up to 5.75%, it went down to 3.75 % during Covid. I made $200 payments on it a month or more to get it paid off, I think it was at 4% when I paid it off. I still get a statement every month, even though it is paid off, the last I looked it was at 8% or more. Glad I got it paid off before it went up to that.
If your Credit Score falls greatly, then, of course, the bank may raise the Heloc rate. They don't just raise the rate "whenever they want". A mortgage also has this risk. [Note: your lender can do a 'soft inquiry' of your credit score at any time, but especially before your renewal date. Your mortgage renewal interest rate may be affected a lot!]
I own my house outright, no mortgage, no other debts. I have a heloc attached that I have not used, nor I don’t think I ever will. What is my best option, just have the heloc just sitting there, or get clear title of my home and remove the heloc? I’m in BC🇨🇦
How about consolidating debts and/or purchase a rental property? If utilized to purchase a performing asset and youre not a complete dolt its a viable option. Rear load all of your bills to towards the end of the month to keep your average daily balance down and have your paychecks paid into the HELOC. What would that look like from your end?
@@Fj4LiFe23 Isn't the whole point of not refinancing is not to start paying interest from the beginning of a loan all over again? [In the beginning of paying off a loan, it's all interest]
@@noeldeal8087 all dependent on the term, but with current interest rates its very cheap to do a cash-out refinance for debts and pay double principle payments to speed up the amortization schedule.
I think people have to use HELOCs/debt wisely. To earn income, improve their lives or for emergency situations. The problem these days is that people see debt/ mortgages as permanent. They only focus on the monthly payment and never even consider a time when it will paid off. As a society, we have to focus less on material items?
I think it just depends what you’re trying to do with the money. I don’t think helocs as a whole is bad though. It’s like with anything, if you take advantage and your irresponsible then heloc can be terrible for you. Some people buy investment properties with helocs and have made a huge gain so it just depends!
In the U.S you can write off the interest like mortgage interest but only if you use it to make improvements to your house. If it’s used to pay off credit cards or other debt than you can’t.
Do US banks behave similarly to Canadian banks? There are a few videos on youtube suggesting that homeowners use HELOCs to pay off their house’s principal quickly or quicker, one. I have recently considered it so I am not paying a mortgage past age 79.
@13thgenerationAmerican same question here...what i have read so far for Canadian banks is that you get penalized for paying off your mortgage earlier.
The line of credit interest is low but it does not seem to work that way. The interest rate has not changed since April 2020, the line of credit has not been used, the principal is going down monthly and the monthly minimum/interest payment amount has not changed except in the billing cycle days. The monthly interest amount certainly adds up to a lot. An employee at the bank told me that because the interest rate is low, the monthly interest amount does not decline much. I told her I sure paid a lot of interest in 12 months so I should see the interest portion declining. Line of interest is not something to play with. I will never use a line of credit again.
@@pinkorganichorse the more research I do the more I'm thinking why not? I only have 1 income but everything's good enough to take on an investment. So if you have 2 incomes that can cover the heloc payment plus you're everyday living expenses you'd be in a much better position to take it on.
OMG, DO NOT cancel the cards once paid off.. Yes, cut them up if you want, but closing them reduces the amount of credit you currently have and closing the account reduces the amount of credit you have available to you which will have an effect on your debt to income ratio. If you want a lower score then great close them. Helocs are GREAT for paying off your home early if used right.
I wouldn't use a heloc like a charge card. Buy a fix and flip house, yes. Rental property, no. A low risk business that definitely will make money, yes.
Rates have been dropping, compare rates with other types of LOCs. If you need LOC, secured by home is going to be, probably the best way to go. HELOC could go from 4.5% to 5.5%, but cc are from 15-25%+, hmmm.
If i have debt of credit card(R50k) at 18.5% and loan(R90k) at 10% paying R4700 pm. Can i take heloc and pay off the debt of R140k...Take the money i was paying on the two debts towards the mortage and reduce the period of the mortage.
IHELOC it say 6% interest or your credit card at 18 to 21% interest. I guess if you have to carry up more than 30 days he like makes sense to me prove me wrong
This is great information, but what about explaing the bank agreement you sign with a 10% annual interest rate on top of the 2.6% HELOC? Im retiresd. and looking to takeing out a HELOC on my home. But for some resan the TD Bank can not explin the annual 10% added to the agreement on top of the monthly 2.6%. Can you please explain?
The comment about no amortization period at 1:47 doesn't sound correct to me. Is there not typically a 10 year draw period in which you can use your heloc, and then after that a payment period begins where the remaining balance is amortized over the next 15 years? This sudden increase in mandatory payments seems like a bigger risk to me than intrest rates going up. You make no mention of this.
They make some valid points but you have to be smart i treat my equity loan like a credit card but without that outrageous interest rate.I try to pay the balance off every month .dont just pay the interest off thats stupid pay as much as you can towards that balance and only borrow as much as you need as you go
In the US they can call your mortgage at any time as well (not likely, but they can) I don't know about Canada. These guys are making a lot of assumptions..feels really bias. I wouldnt attach one to my house...but it still feels bias.
I usually thought paying off my mortgage earlier was a good idea till I came across my financial advisor/portfolio manager who advised me on the right to do .
He advised that I invest the extra money I pay on my mortgage into stocks , forex and crypto, that has been the best advise I've gotten in over a decade because my investments in cryptocurrency has changed my life.
i have been making researches about crypto investment and i have read good stories about its money making potentials but the whole thing gets me confused as I do not have adequate knowledge of how the market ?
Maybe I missed it. You didn’t answer the question. Is a HELOC good or bad. Question is if a person is debt free and the banker tell them to take out a HELOC just to project yourself from on line scammers. Scammers, people who are knowledgeable to tap into the banking system, make up a false Application on your name and steal your credit. Is the banker BS you or is he/she telling the truth
Yes, I read the same thing. If the scammers try to sell the house then the bank will be notify due to the HELOC. With the high interest rates I would not borrow a lot of money.
@@frankyg6906 no. But prudent borrower can use heloc to cut down conventional mortgage's compound interest. Compound will always be more expensive than simple average interest.
@Larry Earnest could you expound a bit on kind of heloc to get? I recently got a heloc flexible interest @ sub prime -0.25%. I have been thinking if I used it to buy a house, what if the prime rate increase, Yes, I'll still have subprime interest rate but might be higher than conventional fixed rate. But then mine is simple interest calculation... Any comment?
IF you don’t have a mortgage, you have no one to leave the property to, I want to live in condo forever, no debt of any kind, HOA fee, Insurance, Taxes are only debit, Need money for travel, how can HELOC be bad?
You only pay interest on what you borrowed on a HELOC and you can use it to pay your monthly mortgage payments and you can deposit your income into your HELOC like a checking account so you end up paying back all or almost all of what was spent incurring even less interest and you just repeat. Unlike a Home Loan that are always frontloaded with interest only payments for many years.
Heloc ís good for some smart. Response person . Discipline. Not for the air head. Lets say you took heloc buy yourself a business. Making money 💰 turn around. Will be a win win situated. Instead take heloc to buy new car... shopping. Act like a high roller.
I've heard that Regions Bank do HELOCs on investment properties. Double check though, and I believe they only loan in the 16 states they're located. Best of luck!
interest rates going up??? you mean .25 percents? dude.... used to be 7% in the 90's and double digits in the 70's... and now we are looking down the barrel of negative interest rates.. does this guy know anything?
We are trying to decide between heloc and cash out refi just to purchase investment property. Is that a great idea? If so, which one? We have no other debt and excellent credit.
This is not financial advice but - Just know that with cash out refi you wil be paying interest on the new borrowed amount over 30 years amortized. The HELOC is structured with (often times) an APR and will save you money at the end of the term and might be better if you are cash flowing on your investment and can afford the payment. Expect to pay more per month with the HELOC vs cash out refi. Using a HELOC as a way to leverage your money for a vetted investment is typically seen as a good tool or idea. Using a HELOC to buy Seadoos and lifted diesel trucks is not.
Im using a paid off home to buy land to build a cabin on , with a heloc. I intend to sell the home once I have a livable dwelling on the new property. This is all new to me , but my guts been telling me to get out of the city for a few years. It's a scary move for us , but we have a lifetime history of paying on time , and I intend to be done with the process within 2 years. Anyhow , idk what advice to give (totally not qualified) , but you aren't alone.
I like this show very good informations i went to gorgia my uncle told me it was a good idea to get Heloc on my home ,, 3000k value.. im 70k to pay it off thank to Dave Ramsey i know he will call me Stupid, so im getting out of Dedt.
Wondering if anyone can help me! I’m divorced and my x and I are selling our home, he wants to do HELOC to consolidate debt, I really don’t want to do this, for the obvious reasons and risk per your show. Our house value has gone down, and now that we are in crisis due to the Covid-19 and I lost my job not sure if that is a good idea. He is threatening to take me to court for this loan or line of credit. First can he do that? In need of someone’s advice. Thanks
@@mariacrosby2233 Unfortunately the rules around these things are a little different between here and there. However, best suggestion would be to consult with a licensed professional (likely a lawyer) in your area if possible. Best of luck!
Yes, because this is becoming a common occurrence. With low interest rates, too many are taking on too much. So that is our focus. We aren't saying don't have one, but to think twice before getting one.
@@brykit1972 I would not advise paying off your mortgage with a HELOC. Less tax advantages with a HELOC, higher/variable interest rates, and you may have to pay it back sooner/on short notice when the draw period is over.
@@mortgagesmademanageable9107 If you're focusing on paying the principle, the interest rate won't have nearly the impact. Plus from what I'm hearing, it's simple interest compared to compound interest. That's a big difference. As for having to pay it back, I'd make sure to have that sort of thing in writing before I signed anything with the bank/credit union. I have not looked at tax advantage differences yet, and would be asking about that specifically before considering. Such things would vary based on a few factors, I'd imaging. Thanks for the reply!
@@hamana2011 Yes, most of the time, but calculated differently. Heloc is not amortized interest. Amortized interest is the worst kind of interest. All the interest is front-loaded of the loan.
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Banks kept rates low in an attempt to save Oblamer. Of course they tried to raise them for Trump. He, however, has pretty much taken control. Bigger question is, what will happen when central bank comes down. Of course I'm talking US, you Canadians are pretty much boned.
Get a small HELOC, so you could see how it works. If it goes well, get another one, and if that one goes well, step it up. Paying your house in less time saves tons of money. HELLO!!
You said get another one... How many Helocs can I get, can I get more than one, same bank or different banks?
Sammy from Alabamy once you pay off your first HELOC, you can get another one from the same bank or another lender. Always compare rates so you can get the lowest interest rates. Once you have experience with HELOCS, you can better determine if you can get a bigger one. Look at other UA-cam videos on this subject so you can get a better understanding of how they work. Good luck!
Tink Tulsa in the US the interest on a HELOC is deductible on income tax.
good advice, start small for learning curve. thanks, Thomas from Tulsa, Ok
Get NO HELOC. I rent. I don't do Mort-Gage = Death Pledge. Also i have SECURED CREDIT not UNSECURED.
To my understanding , this all assumes that you immediately run the max balance on the HELOC- that isn’t a smart move on any line of credit
These dudes are SUPER OPINIONATED listen to this with a chunk of salt
If you are financially responsible, then the heloc opens up massive opportunity. I think the problem is people who view credit as money they own, or people who use their heloc on depreciating purchases and not using it to make or save money.
Exactly. It's an awesome financial vehicle if you manage it responsibly. If you use it to pay towards unsecured debt and don't change the habits that got you there, you're digging a bigger hole with an excavator.
Great tool I used it to acquire two duplexes.
@@euraljohnsoniii2109
Hold my beer
In the US, heloc terms are specified in the Home Equity Line of Credit Agreement. The terms cannot be arbitrarily changed by the lender. I've never seen a heloc agreement that allows a lender to call the loan due. They retain the right to freeze the account under certain circumstances such a late payments, extreme drop in value, etc. The risk is many times lower as a 1st position than 2nd.
Yes, in the USA, banks can call the loan due on a HELOC. Banks were stealing people's homes during the crisis by doing this. People don't realize that they give up certain protections when they take out a HELOC on their primary home.
@@micahwatson9017 That's completely wrong. Most banks were accepting $500 - $1,000 on tens of thousands of dollars that were owed to them when the borrowers short sold or short refinanced. Again, they cant call the loan due. They can stop you from drawing and they can limit your credit limit but they cannot arbitrarily call a heloc due.
Shakes head. Buy assets. Not liabilities! Leverage your equity.
Exactly. Time to use a HELOC to buy crypto or equities when the price tanks.
I talked to 3 banks last year around the same time this video was published. None of them were variable interest rate fir HELoCs. I think you guys are talking more about the predatory portion of the HELoCs. What you should probably do is show how to utilize the HELoC correctly after showing the cons, you're only showing the cons. You guys actually said that moving debt to a lower interest rate is good, but bad in this case, its not if done correctly. Most credit cards people only pay interest on for heavens sake. There is no rule that you ONLY have to pay interest. Its not about getting a lower payment. Its about paying more principle rather than interest. If you want to rail against people going for lower interest rates, rail against those who refinance at year four of a thirty year loan for a slightly lower interest rate and lower payment. at year four, do the math, most people up to that point, have paid between 75 and 80% interest. then they refinance and restart the cycle? this video is disappointing.
Your a 1000% right man these guys are opinionated
HELOC have variable interest rates in the U.S if you take one out to do improvements on your house they count the same as a mortgage and you can deduct the interest like you would a mortgage . I used mine for that purpose. I also paid it back as quick as I could because of the variable interest.
I would imagine a HELOC would work well for people who pay off all credit and debt payments each month?
In that case, make "principle only" payments every month from your checking account.
@@380stroker but then you cant redraw the money for other assets or in emergencies.
Not exactly, HELOC interest is calculated on avg daily balance in most cases, whereas credit card if paid in full each month incurs no interest, and includes points if you are smart and get a card with some cash back.
First position HELOC is the way to go IF you have positive cash flow and don't spend that positive cash flow over the course of the loan. You can pay your mortgage off MUCH faster than any conventional loan.
I had a HELOC loan, interest started at 4% and went up to 5.75%, it went down to 3.75 % during Covid. I made $200 payments on it a month or more to get it paid off, I think it was at 4% when I paid it off. I still get a statement every month, even though it is paid off, the last I looked it was at 8% or more. Glad I got it paid off before it went up to that.
This is good advice for people who have a hard time controlling their spending. Bad advice for people who want to put their money to work for them.
If your Credit Score falls greatly, then, of course, the bank may raise the Heloc rate. They don't just raise the rate "whenever they want". A mortgage also has this risk. [Note: your lender can do a 'soft inquiry' of your credit score at any time, but especially before your renewal date. Your mortgage renewal interest rate may be affected a lot!]
I’m addicted to financial info
I own my house outright, no mortgage, no other debts. I have a heloc attached that I have not used, nor I don’t think I ever will.
What is my best option, just have the heloc just sitting there, or get clear title of my home and remove the heloc?
I’m in BC🇨🇦
How about consolidating debts and/or purchase a rental property? If utilized to purchase a performing asset and youre not a complete dolt its a viable option. Rear load all of your bills to towards the end of the month to keep your average daily balance down and have your paychecks paid into the HELOC. What would that look like from your end?
it would be better to do a refinance then a heloc in that case
@@Fj4LiFe23 Isn't the whole point of not refinancing is not to start paying interest from the beginning of a loan all over again? [In the beginning of paying off a loan, it's all interest]
@@noeldeal8087 all dependent on the term, but with current interest rates its very cheap to do a cash-out refinance for debts and pay double principle payments to speed up the amortization schedule.
I think people have to use HELOCs/debt wisely. To earn income, improve their lives or for emergency situations. The problem these days is that people see debt/ mortgages as permanent. They only focus on the monthly payment and never even consider a time when it will paid off. As a society, we have to focus less on material items?
I think it just depends what you’re trying to do with the money. I don’t think helocs as a whole is bad though. It’s like with anything, if you take advantage and your irresponsible then heloc can be terrible for you. Some people buy investment properties with helocs and have made a huge gain so it just depends!
Bertram ScroGGins, Downturn housing market, Helocs come in handy.
In the U.S you can write off the interest like mortgage interest but only if you use it to make improvements to your house. If it’s used to pay off credit cards or other debt than you can’t.
Do US banks behave similarly to Canadian banks? There are a few videos on youtube suggesting that homeowners use HELOCs to pay off their house’s principal quickly or quicker, one. I have recently considered it so I am not paying a mortgage past age 79.
@13thgenerationAmerican same question here...what i have read so far for Canadian banks is that you get penalized for paying off your mortgage earlier.
The line of credit interest is low but it does not seem to work that way. The interest rate has not changed since April 2020, the line of credit has not been used, the principal is going down monthly and the monthly minimum/interest payment amount has not changed except in the billing cycle days. The monthly interest amount certainly adds up to a lot. An employee at the bank told me that because the interest rate is low, the monthly interest amount does not decline much. I told her I sure paid a lot of interest in 12 months so I should see the interest portion declining. Line of interest is not something to play with. I will never use a line of credit again.
Sounded like the people they were talking about didn’t have a strategic plan and were using the HELOC irresponsibly.
Would it be a good idea to get a Heloc on a primary home that's paid off to purchase investment properties at Auctions to fix & flip or rent out?
This is my question too.
@@pinkorganichorse the more research I do the more I'm thinking why not? I only have 1 income but everything's good enough to take on an investment. So if you have 2 incomes that can cover the heloc payment plus you're everyday living expenses you'd be in a much better position to take it on.
I used it for buy and hold personally
@BROWN BROWN Correct. I don't know where this guy is coming from. I don't think he knows either.
BROWN BROWN what is llc?
OMG, DO NOT cancel the cards once paid off.. Yes, cut them up if you want, but closing them reduces the amount of credit you currently have and closing the account reduces the amount of credit you have available to you which will have an effect on your debt to income ratio. If you want a lower score then great close them. Helocs are GREAT for paying off your home early if used right.
sooo...
How do I pay my home early by taking a HELOC?
@@ricorodriguez3579 See the video by one of the oriental brothers on here[I think his name started with K] about how to pay off your mortage early.
@@noeldeal8087 Kwak Brothers
@@jt5747 applicable in CA without penalties?
very informative thanks. good advice in these crazy financial times we live in
you still can move if you stuck with house! Rent it!! and make it pay itself, why not??
Apply for Heloc before you move out. Owner occupied HELOC interest rates lower than rental property rates as absentee owner is more risk.
I wouldn't use a heloc like a charge card. Buy a fix and flip house, yes. Rental property, no. A low risk business that definitely will make money, yes.
Rates have been dropping, compare rates with other types of LOCs. If you need LOC, secured by home is going to be, probably the best way to go. HELOC could go from 4.5% to 5.5%, but cc are from 15-25%+, hmmm.
If i have debt of credit card(R50k) at 18.5% and loan(R90k) at 10% paying R4700 pm.
Can i take heloc and pay off the debt of R140k...Take the money i was paying on the two debts towards the mortage and reduce the period of the mortage.
IHELOC it say 6% interest or your credit card at 18 to 21% interest. I guess if you have to carry up more than 30 days he like makes sense to me prove me wrong
Really depends on what you’re doing with the heloc money
This is great information, but what about explaing the bank agreement you sign with a 10% annual interest rate on top of the 2.6% HELOC?
Im retiresd. and looking to takeing out a HELOC on my home. But for some resan the TD Bank can not explin the annual 10% added to the agreement on top of the monthly 2.6%. Can you please explain?
The comment about no amortization period at 1:47 doesn't sound correct to me. Is there not typically a 10 year draw period in which you can use your heloc, and then after that a payment period begins where the remaining balance is amortized over the next 15 years? This sudden increase in mandatory payments seems like a bigger risk to me than intrest rates going up. You make no mention of this.
If you plan on using a heloc to fix a home to sell it pay the heloc back you’d be ahead
They make some valid points but you have to be smart i treat my equity loan like a credit card but without that outrageous interest rate.I try to pay the balance off every month .dont just pay the interest off thats stupid pay as much as you can towards that balance and only borrow as much as you need as you go
A lot depends on what the purpose of the loan is and how financially responsible one is.
Mandy Moore thank you
Terry Asiedu thank you
In the US they can call your mortgage at any time as well (not likely, but they can) I don't know about Canada. These guys are making a lot of assumptions..feels really bias. I wouldnt attach one to my house...but it still feels bias.
I usually thought paying off my mortgage earlier was a good idea till I came across my financial advisor/portfolio manager who advised me on the right to do .
He advised that I invest the extra money I pay on my mortgage into stocks , forex and crypto, that has been the best advise I've gotten in over a decade because my investments in cryptocurrency has changed my life.
I've made over $786k in barely 11 months of investing in cryptocurrency and forex, isn't that amazing !!!
Yes there are different approach to things , it's cool as long as your decision favours you
i have been making researches about crypto investment and i have read good stories about its money making potentials but the whole thing gets me confused as I do not have adequate knowledge of how the market ?
How are you able to make profits with your investment in crypto?
Cash out refinance vs HELOC wich is better my house worth 1 .2 m n balance is half left .
Maybe I missed it. You didn’t answer the question. Is a HELOC good or bad.
Question is if a person is debt free and the banker tell them to take out a HELOC just to project yourself from on line scammers.
Scammers, people who are knowledgeable to tap into the banking system, make up a false Application on your name and steal your credit.
Is the banker BS you or is he/she telling the truth
Yes, I read the same thing. If the scammers try to sell the house then the bank will be notify due to the HELOC.
With the high interest rates I would not borrow a lot of money.
Ask kris krohn if a heloc is a good idea.
80k debt, property value 280k. what's best way to pay off debt of 80k in 4 years......6...?
Follow Dave Ramsey's baby steps. You'll be bebt free in no time. Then never borrow money again!
very informative, Thx for the video and the amazing advice
Watching this video is painful. A HELOC can be a fantastic financial tool to become debt free.
Heloc IS debt. So you’re still not “debt free”
@@frankyg6906 no. But prudent borrower can use heloc to cut down conventional mortgage's compound interest. Compound will always be more expensive than simple average interest.
@Larry Earnest could you expound a bit on kind of heloc to get?
I recently got a heloc flexible interest @ sub prime -0.25%.
I have been thinking if I used it to buy a house, what if the prime rate increase,
Yes, I'll still have subprime interest rate but might be higher than conventional fixed rate.
But then mine is simple interest calculation...
Any comment?
These guys are talking about mom and pop home owners. They are not talking about investors.
6% really is 120% amortizatized. $37k & pay 81k
IF you don’t have a mortgage, you have no one to leave the property to, I want to live in condo forever, no debt of any kind, HOA fee, Insurance, Taxes are only debit, Need money for travel, how can HELOC be bad?
BIll Ligon
I like loan and pay off debt
Yes or can't?
This is not sound advice at all! For one a HELOC is simple interest vs a Mortgage which is amortized case closed!
Who said that heloc is simple interest? In Canada, interest on heloc is calculated on a daily basis vs in US it is calculated monthly.
You only pay interest on what you borrowed on a HELOC and you can use it to pay your monthly mortgage payments and you can deposit your income into your HELOC like a checking account so you end up paying back all or almost all of what was spent incurring even less interest and you just repeat. Unlike a Home Loan that are always frontloaded with interest only payments for many years.
Listening today and these are pretty much wrong on everything. Use it to pay your mortgage loan in 5-7 years
Yeah the HELOC is hard to pay off if you don't make a payment above the interest payment, banks are scheming with HELOCS
30 year mortgage is biggest scheme ever
@@philvelasco1363 especially for people who keep refinancing it for lower rate. Most people don't seem to understand front loaded interest.
So why not get a heloc pay mortgage off then u just pay heloc
Heloc ís good for some smart. Response person . Discipline. Not for the air head.
Lets say you took heloc buy yourself a business. Making money 💰 turn around. Will be a win win situated. Instead take heloc to buy new car... shopping. Act like a high roller.
HELOC
I am interested in getting a HELOC on one of my rental properties.
Do any lending agencies allow HELOC for rental property?
I've heard that Regions Bank do HELOCs on investment properties. Double check though, and I believe they only loan in the 16 states they're located. Best of luck!
@@ThisDanceScaresMe
I got HELOC from NFCU (Navy Fed Credit Union). The rate is a little high, but the loan process wasn't bad, and moved quickly.
Yep.. Ridge Lending Group
Bank of the West does HELOC on rentals.
interest rates going up??? you mean .25 percents? dude.... used to be 7% in the 90's and double digits in the 70's... and now we are looking down the barrel of negative interest rates.. does this guy know anything?
@@hughrobert6189 ?????
We are trying to decide between heloc and cash out refi just to purchase investment property. Is that a great idea? If so, which one? We have no other debt and excellent credit.
This is not financial advice but - Just know that with cash out refi you wil be paying interest on the new borrowed amount over 30 years amortized.
The HELOC is structured with (often times) an APR and will save you money at the end of the term and might be better if you are cash flowing on your investment and can afford the payment.
Expect to pay more per month with the HELOC vs cash out refi.
Using a HELOC as a way to leverage your money for a vetted investment is typically seen as a good tool or idea. Using a HELOC to buy Seadoos and lifted diesel trucks is not.
Im using a paid off home to buy land to build a cabin on , with a heloc. I intend to sell the home once I have a livable dwelling on the new property.
This is all new to me , but my guts been telling me to get out of the city for a few years.
It's a scary move for us , but we have a lifetime history of paying on time , and I intend to be done with the process within 2 years.
Anyhow , idk what advice to give (totally not qualified) , but you aren't alone.
Im in a hurry to move , but this is the top of the market, so waiting for the bubbles to pop would give more options for less money.
if you are familiar with velocity banking then the HELOC strategy is the best way to go my opinion
I like this show very good informations i went to gorgia my uncle told me it was a good idea to get Heloc on my home ,, 3000k value.. im 70k to pay it off thank to Dave Ramsey i know he will call me Stupid, so im getting out of Dedt.
Wondering if anyone can help me! I’m divorced and my x and I are selling our home, he wants to do HELOC to consolidate debt, I really don’t want to do this, for the obvious reasons and risk per your show. Our house value has gone down, and now that we are in crisis due to the Covid-19 and I lost my job not sure if that is a good idea. He is threatening to take me to court for this loan or line of credit. First can he do that? In need of someone’s advice. Thanks
First thing, are you in Canada?
Debt Free in 30 I’m not NJ
@@mariacrosby2233 Unfortunately the rules around these things are a little different between here and there. However, best suggestion would be to consult with a licensed professional (likely a lawyer) in your area if possible. Best of luck!
Debt Free in 30 thanks for your response.
This video focuses on a HELOC in addition to a mortgage. What about as a mortgage replacement?
Yes, because this is becoming a common occurrence. With low interest rates, too many are taking on too much. So that is our focus. We aren't saying don't have one, but to think twice before getting one.
@@DebtFreein30 That's just what I'm doing. I'm finding out a HELOC as a mortgage replacement is for those that are disciplined with their finances.
@@brykit1972 I would not advise paying off your mortgage with a HELOC. Less tax advantages with a HELOC, higher/variable interest rates, and you may have to pay it back sooner/on short notice when the draw period is over.
@@mortgagesmademanageable9107 If you're focusing on paying the principle, the interest rate won't have nearly the impact. Plus from what I'm hearing, it's simple interest compared to compound interest. That's a big difference.
As for having to pay it back, I'd make sure to have that sort of thing in writing before I signed anything with the bank/credit union.
I have not looked at tax advantage differences yet, and would be asking about that specifically before considering. Such things would vary based on a few factors, I'd imaging.
Thanks for the reply!
Overalll its not bad. Here was my Heloc interest rates
2020 interest rate was 2.8%
2021 3%
2022 4%
2024 prime rate about 5.2% + bank rate 2% = 7.2%
Underwriting isn’t even going to approve you with 30k in credit card debt
Live within your means stop spending save for a rainy day
"You have the flu and you're off work for a week".
Foreshadowing.
This was me this past week..and I had sick-leave for it.
"House prices increasing everywhere in North America have been increasing sense 2009" WTF, what planet is your North American continent on?!
my kind of nerd talk :) thanks guys
Been wondering what Al Franken was up to these days....
That makes 2 of us.
That's like securing your loan with an organ as collateral. Go beg for spare change if you really need it that bad.
What if you borrow from it to pay off the mortgage?
If you are good with money, YES!
Many people cant handle that amount of financial management and responsibility consistently but if you can, you'll shave a whole lot of time off.
Is not the rate higher than mortgage ?
@@hamana2011 Yes, most of the time, but calculated differently. Heloc is not amortized interest. Amortized interest is the worst kind of interest. All the interest is front-loaded of the loan.
@@hamana2011 What dominic said pretty much.
Can you add to the title "in Canada"? I dont think this applies to the US?
Wow, simple common sense.
Canada calls it a howse. Lol
2022 now.. Interest dropped to almost 0
cant you get a fixed rate HELOC? i know i have seen them
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If you cancel your credit cards when they are paid off it lower your credit rating
It sounds great
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very Danger game play HELOC no way.
Getting a loan better
No.
Why so much fuzz about selling a 'hose'... You mean like a garden hose?🤣
And a "borro-ur" when they mean "barro-ur."
@@trainjustleft LoL 😁 😁😁
I don’t think this guy has heard of velocity banking before they made this video. I’m sure he has now
now that’s spamy stuff
Wow !! Negative talk on real estate.. this video seemed so negative and emotional talk.tall.. give me facts, show me numbers, show me charts.
"Unless the housing market collapses, the bank will get paid." #whewps
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July 2022 has entered the chat.
Like 128 #Yang2020
Big joke
💥💥💥💥💥👏👏👏👏👏👏
Banks kept rates low in an attempt to save Oblamer. Of course they tried to raise them for Trump. He, however, has pretty much taken control. Bigger question is, what will happen when central bank comes down. Of course I'm talking US, you Canadians are pretty much boned.
FOH 🙄