Should I Borrow Against My House To Pay Off Debt?
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- Опубліковано 12 вер 2024
- Should I Borrow Against My House To Pay Off Debt?
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My great aunt pawned her house to pay debt. She ran the debt back up. Now shes 75 years old frying chicken at 4 am trying to pay her house note and debt. Dont do it !
So sad.
The problem isn't that she paid the debt. The problem is that she incurred more debt. They are not the same issue.
How do you pawn a house ?
I mean if she ran the debt back up that was her own situation. Not everyone will run the debt back up so it could be a good decision for some people
If you have no mortgage payments, use that money to pay off your debt. Why would you need to borrow on your house? Sell the truck if you have to... I wish that people would realize that cars are a liability, NOT an asset. They continually drain your bank account ( gas, insurance, maintenance, etc) all while depreciating in value. Avoid car payments as much as possible people and buy an older vehicle cash.
Why does the Mexican from El Paso have to eat beans and rice? 😂 Dave’s a savage!
He's probably like, "more!?" Lol
Paying off 36k a year on a 115k income with no house payment isn't what I'd consider having no life
With that kind of income I'd say just stop with the credit spending and pay off the debt that is there. Selling the truck will probably just lead to another vehicle purchase that will put him in the same situation.
Money owed is money owed. If you can decrease the interest rate, and thus save an appreciable sum paying off the same amount of debt, why would not do that?
@@jamie49868
Because moving debt around doesn't solve the problem. Usually a debt consolidation loan has a lower interest rate and a much much longer payoff period so you will end up actually paying more in interest. Also beware of a sweet deal because banks don't do anything out of the kindness of their hearts. Ever hear of an early payoff penalty? Some loans will charge a lot if you want to pay them off early. Ever heard of collateral? A high interest credit card debt is unsecured but a debt consolidation loan will probably have collateral and that will probably be your house. Default on a credit card and you get sued and a bad credit report. Default on a loan with your house as collateral and you are homeless. Only paying off debt is paying of debt. Moving debt around is sweeping dirt under the carpet.
No Drogo, there is a difference. This guy owes 80K. If his truck and CC interest is 18% that 5 year payoff will cost 2,000kmth and $120,000 total. If he can knock that down to even 6% with a home equity loan, the 5 year payoff will cost 1,500mth for a total of $92,000...resulting in a savings of $28,000 dollars. Even if there is a penalty for paying the truck off early, there is none on the CCs, and that penalty would be nothing compared to the $28,000 he saved. Tell me again why you wouldn't do that? Because the worst case scenario? You might get struck by lightning, so never leave the house?
@@jamie49868
You obviously already know everything so I won't try to tell you anything.
Are you really refuting this? Run the numbers. You can tell me anything you want. Do you not agree with anything I have stated? They make $115,000 together. If one loses their job, the other can cover that nut pretty easily. If you want to pay it off in 2 years...6% total payoff 84,000k, 18% = 95,0000, still an $11,000 savings. But sure, don't do it because Dave says.
Really useful video. We are in same position. House paid off but small car payment. We are going all out should be paid off and 100pc debt free april or may next year. Never NEVER again!
Gotta sell the car and eat beans and rice and rice and beans Stoopid!
I am so happy that they paid off their house. Excellent !
Now it is their choice to choke on the debt for 1 year and be free or drag it out 2 years.
Personally, i would do 1
What is the interest rate? What is the total amount of money you will pay pack? Money owed is money owed, whether for a car, a credit card or a house. If you can reduce your interest rates on those cards and truck by a home equity loan, and thus save you money over all, why wouldn't you do that?
He sounds like he doesn't want to sell his truck. Crazy!
Pay that debt off quickly for the win. Focusing on one card then the other would be the best since they are the smallest. It shouldn't take that long with that kind of income. They may want to also look at their expenses and look for small bills they don't need that are draining them of their wealth.
Here is the thing. If you are paying 18% combined on your CCs and vehicle and owe $80,000, if you pay that in five years, your payment is $2,000mth and total payoff amount will be appx $120,000. If you can knock that 18% down to 6%, your monthly payment is $1500 and payoff total will be $92,000. That is a savings of $28,000. Tell me again why you shouldn't do that?
Simple, borrowing against your house makes your house collateral on your debt. That means that if something were to happen which would leave you unable to make the payments, you could lose the house. Personally, I'd say no amount of interest rate savings is worth that additional risk.
@@chrisstaub5880 It is not for the faint of heart, that's for sure. My point is that if you want to acquire wealth, you have to take some risks. Right now with interests rates at historic lows, you will never have a better opportunity to unlock the static value of your house, and eliminate any high interest debt you carry. Dave has made a fortune off of telling clueless people how to get out of debt. People with a clue don't need that advice.
I’m a big baller, my Maserati’s payment is $1,500 a month, and my house payment is $2,900 per month; I make $8,500. I also have $250,000 of dental school debt. I’m such a BALLER!
Awesome Dave, my wife and I are out of debt because of you! We started a channel focused on relationships and just released a video about following your dreams. Thanks for all you do! WE’RE DEBT FREE!!!
Depending on how many rooms they have and how they value privacy they can rent out one of the rooms for additional income. Maybe for 6 months to 12 months lease
Why are trucks so expensive?
They're popular and selling. A Ford Super Duty F-450 Platinum 4WD SuperCrew can cost $78,970-$87,545.
Because stupid people will pay what they charge.
Tacomas are relatively affordable. Get the plain one and no packages. You will save a ton
@@rose_6400 platinum? 4wd? Too bad. Personal choice. I can get a tacoma for half the price. People choose to fail.
People are compensating with a large truck for being small elsewhere.^ me, thank you for thinking critically.
Investing Hustler borrowed against his debt to pay off his house
Perfect!
The" beans and rice and rice and beans " comments are wild. 😂
Sell the truck i really doubt upside down...trucks hold value well....sell online yourself. Cc debt is stupid debt....thats monthly spending you arent controlling.
Had a cc for 20 years and have no cc debt and save 50% monthly income. Some just cant stay debt free on them..weird. But agree he needs to ditch them. Problem is he mostly likely will still spend alot once debt free.
I would like to see the use pick up market go back to reasonable I had to get a good used minivan it 1/4 the cost for same year and millage.
Whenever they say "do you think it's a good idea" what comes next is always interesting
115000 minus 12 times 3000, why is this rice and beans?
They should get the Chase Slate card and balance transfer those two credit cards .. consolidate $30k onto an interest free card for 15 months, with no balance transfer fee.. then pay off all that $30k in 15 months interest free.
You the best Dave
You're going to put your house at risk to pay off other debts like credit cards and a truck? No. Just....no.
What kind of truck is it??
U should of pay off debt first before buying a truck
I just had rice last night, actually it was chicken favored rice, but OMG.. soooo gooooood!
No Beans?
You sound like you're a richer man from that experience.
LOL
What truck can even go under so bad so quick??? well probably a ford/gm, people need to start looking at Toyota Trucks and stop saying "I want to shop American". No.. fords and gm's outsource to Mexico while the Tundras are built here in Texas. Alright ill give you that the Tacoma is built in Mexico but then again Toyota not an American brand, and ill give you that sometimes you need a diesel to actually haul, but for the most part people want to show "my big bad American truck". All that to say this.. Toyota Trucks RELIABILITY and RESALE VALUE are UNBEATABLE. I can't even find an under 200k miles 2000's Land Cruiser for under $13,000
Andy Berrios Spot on. We only buy Honda’s and Toyotas. I worked for a couple of “American” manufacturers. They are very cheap to say the least
@@nathanmcdaniel2557 lol that's a cop out, " American" is fine. I drove a 1999 Suburban for a long time.
Dude you WERE already debt free..dang
Borrowing against your house doesn’t sound like paying off debt. That’s like just transferring debt balances from other things to your house.
Never a good idea to borrow money. I love how quickly Dave said no.
I don't think this question is as dumb as some of the comments would have you believe. I agree with what Dave said here but it's perfectly logical to borrow against the house to pay off the other debt as long as you can write off the interest. In essence you are just shifting debt around with a tax benefit. This also assumes you are good at being disciplined and paying off your debt consistently.
True. Also CC debt is generally much, much higher than home equity loan. The truck may be 2-5%, and some dealers even offer 0%. Dave never asked anything about interest rates. The difference in paying 5% vs 18% on 80K is about $30,000 over a 5 year payoff. That is almost a free truck in savings.
Awesomeness
Get a cheaper truck don’t borrow on a payed up house
oh yes cut up those credit cards and why have they got big credit cards with that yearly income?
Tacomas. You can get a crew cab with v6 all under 40k...lol...
Okay, they made a mistake by running up the CC and buying a new truck. So what now? Continue to compound the mistake by paying higher interest than they need to, or taking out an equity loan at a much discounted rate, saving them an appreciable sum in the process? Money owed is money owed, be it on a house, a car, CCs, or a trip to Hawaii, it really doesn't matter what that debt is. Dave never asked what the interest rates were, or got into that part of it. That is stupid.
But isn’t having low interest better than high interest?
Mathematically, yes - but it's still taking on debt to pay off debt, which is not a good idea. Also, who knows what else this man is going to do once he has a taste of borrowing against his house - if he has no self control, he could easily end up in debt spiral again.
We always eat rice 🍚😊
Investing Hustler should fill in for Dave when he's out of town on business
Credit cards are termites, I agree. I’d love to cut up all my credit cards too.
Do it. You dont need them my dear. They will only lead to heartbreak. Cut them up. X
@@iscaangel6749 no
Why are there so many adults that know debt is bad but refuse to be smart and stay away from it? Everyone has gone to school at some point but act like they never have been to school.
El Paso!!!!
Dave amazes me by this "We"enforcement thing on married people.hmm 92% married folks out here don't do we.They are too entitled flakies.
Just get rid of the wife, they cost to much. A truck will never let you down
THE WIFE IS BRINGING IN MORE MONEY THAN THAT TRUCK