HELOCs Vs Home Equity Loans Explained | The Pros and Cons
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- Опубліковано 28 вер 2024
- We discuss the differences between a HELOC (Home Equity Line of Credit) and a Home Equity Loan
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Love this analogy
Yes sure
@@ob2be1 Amen
@@Maggiemagic305 Amen
Home equity line of credit over HEloan every time more flexibility and you can find HELOCs with zero closing costs
Awesome!
Not if your credit score sucks, your DTI is too high, or your have a mfg home.
THIS IS AWESOME INFORMATION!!!! I WAS ABLE TO PURCHASE MY HOME WITH YOUR GUIDANCE DURING THE PANDEMIC WITH 1.5% INTEREST RATE!!!!! kEEP THE INFO COMING
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Credit unions are a credit place to go. I've seen helco intro rates in NY as low 1.99% for 80% LTV and 2.99% for 81%-90% LTV for 13 month. After the intro period, the rates are pretty much the same across board.
@@RynAmelli84 Too many questions.
Started mine at 2.5 % then the rates rose as we all seen . Now it’s at 7.2 % serious increase in the last months wow . Interest only payments that tripled. Mortgages are cheaper rates wow
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Thanks for explaining the difference. I’m not looking to invest the money where I would need a revolving line of credit so I think the loan would make more sense.
❤❤
same here
Did she say she’s not a risk taker but she wants to pull out $100K on $160K in equity?? That’s a MAJOR risk considering even a slight drop in home values (5-10%) almost puts her underwater. RED FLAG!!!
All depends on how she deploys it, If the return on her next venture is 10-15% then when the market pulls back she at least breaks even.
I think she put 100k down, then it appreciated 160k…. So that would be 260k in equity. Still don’t love the idea
You follow them too!!!
What if she do a subject 2 and that person's home is valued at 250,000 with 75% equity in the property at 187,500 with a note at 4%. It really depends on how the money 💰 is used
Exactly what I was saying. 100k out is risky business
I refinance my mortgage before the pandemic and used my HELOC to get a 3.39% rate...I paid $100 to lock in that rate to a FIXED rate. The Heloc is always a better choice...use it with caution but it is good to have...I have it if I need to do something major on my home.
Very nicely done (explanation). Thank you for sharing this true "nugget" on the difference. So when I see HELOC and Home Equity Line of Credit, appears to be the same. However, you broke it down so clear I now know they are truly different. While one is a loan the other is a line of credit that is revolving and you only pay what you use. While with the other you pay on the full loan and it is not revolving or reusable.
But the home line of credit the interest will change it can go up or it can go down. If it goes up then your monthly payment will go up. I don’t think I like that.
Awesome!
I can't express how helpful this was thank you!!
Awesome!
Thank you for the explanation I was so confused now I can make a better decision.
Also note you need at least 680 fico in most cases to get theses products.
What are the best places to go i got a 698?
@@jackieroach2124 I am a license loan officer and check out my youtube channel. Usually HELOC's reuired a min of 660, you should be able to get one thru your bank or any other lender that offers these products. Shop around with at least two leaders to get the best terms!
Thank you for the information, actually made a life decision based on the information provided.
My question is if you take out the 100k as a down payment on your next cash flowing investment property wouldn’t you be breaking even instead of increasing your monthly income? You mentioned the cash flow of the new property is going to cover your helock and your second mortgage. But rarely if ever is an investment property going to cover your second mortgage, your helock loan, AND actually put money into your pocket all at the same time… you either have to wait until the helock or the second mortgage is paid off to see real cash flow returns.
I was thinking this same thing before I made a decision on getting a HELOC,refinance,or just sell my current property and use some of that money for a larger down payment so I won’t pay PMI.
How do lenders look at HELOC debt when you are applying for a new home loan, what you’ve used, or what you could potentially use?
I'm a lender. We look at the monthly payment for a HELOC or heloan. Just like a credit, we use the payment due not the potential full amount of the line of credit.
@@TimTomkowiak : Hello … do you know of any banks who offer a fixed rate for a Heloc other than PNC bank?
@@Marie34694 PNC is good for HELOC s etc there process can be slow tho. I can't think of any off the top of my head. But check with a few local credit unions
@@TimTomkowiak thank you 🙏🏽
Great talk and explainations for the types of loans. I am looking to do a HELOC, thanks!
Awesome!
Excellent and incredibly useful content. Thank you so much.
Awesome!
Awesome love it. Clear and straight up information 😊
For the best part a heloc is best for someone who has payed off a mortgage then get a heloc who wants to pay two mortgages on one house a home is for living in and not a gambling tool
First off, a house is never your home. You are just living it for a specified amount of time. While you're living in it, reap some of the benefits. That's really what a house/home is for.
@@BayouHotBoy1 yep that’s right because we all are going to pass away and a new generation will the house belongs to. But it is nice to have a free place to live before we go and give the house to children or grandchildren
This was great, thank you MG!!
#askmg
I am 71 years old and recently obtained a HELOC against my primary home. I plan to use the funds to modernize and upgrade my bathroom from a tub to a walk-in shower. I was told that this could add value to my home. According to this segment, you mentioned using the loan to invest in property to generate cash flow. Given my age, would it be smart to take a portion of the HELOC and invest in another property at this time?
Hi MG, great explanation of the differences between a H 23:10 E and Heloc. I have been told the Heloc Payment is Interest only for the length of the loan. I.e., 20 yes then you still owe the principal?
If your older 60 is that too late to build wealth through real estate ?
Thank you, this was very helpful!!
great video !! Just subscribed
So if I have a rental, it's wise to get a heloc to do repairs and renovations
No use your own money.
Here’s my questions. If I get a HELOC, could I buy another rental or do I need cash?
Can you deduct the interest on your income taxes on a HELOC OR equity loan like you can on your mortgage interest?
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what's the harm in getting another loan after you pay off and close your home equity loan?
When ya'll coming out west fam? Been across the pond and, unless I missed it, haven't seen anything about being in Cali.
#askMG
First off, thanks for making this video! I'm an LO and want to get into investing for myself and assisting some of my clients. My question is, for this HELOC example, the minimum draw amount was 25k, do you always have to have a balance of 25k during the draw period?
No.
almost any bank now days that i know of is gonna start your HELOC with a draw and they can be really high, SpringEQ starts you off with a draw of 50K, now given you dont have to keep the money of course but thats how you will start, most likely. HELOC's are open for 10 years where you can draw, pay back whatever you want, draw again, pay back. keep in mind the payment in that time frame is interest only so if the HELOC payment is $500 thats only interest where you need to add whatever you want to the principal ( payment can also increase due to interest rate ). my recommendation to all my clients, if you cant payback the balance in 2-3 years or less dont get one! the amount of interest you will pay in the long run if you dont pay it back quickly can be crazy where it will force you to refi. also if you are financially good and just want a safety net on the side and you know you wont use it..thats a good idea. with rates now days moving faster than normal and how high they are you need to be very careful with HELOCs
Great lesson!!!
Can I sell my home while I have a HELOC out? Say I bought a home for 100k now it's 220k. HELOC allows me to to pay high interest credit cards. Use it how I need - then can I sell the home to repay the HELOC?
When you sell the profit its taken to pay the heloc. I did had a heloc and when I sold it paid off my heloc.
New house inherited no payment I have both heloc and LOC.problem on the LOC the rate has gone up to 7.66%. I'm now in the process of paying both off aggressively I had a spending problem and getting out of debt. It was the worst thing I ever did borrowing on my home to pay my debt...robbing Peter to pay Paul. Verses getting my spending problem addressed. Plus the term is general like 10y min and you typically won't pay more.the amount of interest tie writing off isn't that much.. If I had understood I had a spending problem I would have paid aggressive on the credit card and never touched borrowed against my home.
Again it's my story.. Also if you are a number person look at the amount of interest your actually paying over the total loan.then look at how much you would pay interest if paying the credit card at your max amount.
Also since they take the money out of your account you get comfortable cause the payment can be low and your spending again.
Sorry for the story but just showing what I went through... Good luck..
Love the knowledge black King! appreciate the questions black Queen! Melanated!
How is one's net worth determined be the estimated value of a home that one owes to the bank almost in its entirety (minus whatever real equity exists in the home)? Honest question?
#askmg I’m in GA and we bought our home and I take it we might be up 75k in equity. I want to know if it was wise to put a heloc to do renovations on the house to boost its value more
Personal preference. Just see the potential return of value. If you plan on selling, it could make you money on the sale. If you’re heading to keeping it, I would save the HELOC for repairs, debt consolidation, and emergencies
I’m getting all closed door trying to get a heloc for a property that’s in my LLC… I own the property free and clear, it’s worth $175k and my credit score is above 700… did you do your heloc in your own name or in an LLC
Thanks
Should I use Heloc to pay off my credit cards
Is a Heloc still good for the average person with no investment properties. Because I just want the money to renovate my home and just pay if back. Is the risk worth it with the variable rate?
#askmg - what is a renovation loan u talked about and is that through your current mortgage loan provider or personal bank?
So how do you get a HELOC if you live in Texas??
Use them tools,heloc buy 20plex cash flow pay ur 1st(mortgage/homeloan) and 2nd loan(investment 20 plex). Brilliant financial educated mind$!!!!thanks for no fluff get ahead strategic impact advice.
How’d you get her a 2.75 interest rate in this market?
Hook me up!
some of these are hard to get, i could refer a program i got easily.
What is the best HELAC Loan Company
Hi, question: I need to replace my roof in the house. I got an incredible quote for metal fooff, but the catch is that I do have to pay cash which I don't have. would you recommend HELOC? thank you
Save up
Hello … does anyone know which banks offer the Heloc loan with a fixed rate other than PNC bank?
Pretty much none. I just got my HELOC with PNC. I shopped around and they have the best rate and the only one with a fixed rate on your first draw. After the first draw, it will be a variable rate.
And PNC pays the closing costs if the loan is open for at least three years
Do you mind sharing the rate you got at PNC?
@@ryanjaramillo8152 : Thank you 🙏🏽
@@ryanjaramillo8152 thank you
#ask MG is a HELOC good for resolving on loan in default.
How about get out of debt talk about that
Good info
How long do you need to wait to apply for HELOC after you buy the home?
Depends on the institution.
Right after the close of escrow, as long as you have equity.
I’m not reusing jack..✌️
thank you
Neither of these options are good. It is a form of debt. You are still giving away your income to a third party which means less money in your pocket. There is a better way.
What's a band?
#mg… wat happens if you had a forbearance, can u still do heloc?
Can you write off interest of the heloc?
#askmg. Why do you say don’t invest in Dubai?
Great I got ❤
Anything over 7 % crazy
better have good credit scores and a debt ratio folks or you're not getting a heloc. So many people that have 650 or less scores are buried in debt but but but my first mortgage is at 3.5%... so what? if you can't afford your bills what difference does it make? you do know a bankruptcy lawyer isnt going to let you keep a bunch of equity and dissolve your credit card debt? could be the difference between chap 7 or chap 13. what about when your heloc rates go up or goes into 10 year repayment payment that is alot higher. many people do dumb things. alot of people don't think helocs are mortgages on homes! dumb dumb
Does the bank do an appraisal on your current property 1st? Is the HELOC based off of credit score? No point in applying if my score isn't high enough. #askmg
yes they do
Who the hell sale a house worth 900 to 760z
I smell bullcrsp
Shes dumb cute
3 minutes of banter in the begining is so annoying. get to the point
💙🎢🎡🗽✌🏼
#mg Can you list some lenders willing to do HELOCs on investment properties in NC. I have a couple already listed, but wanted to see if you had some suggestions also.
Did u ever find anyone?
My Dad bought a $300K house in 1993 here in San Jose. It's worth $1.6 Million now and because he took out so many Home Equity Loans, he lost the House and has nothing to show for it. I will never borrow against my house.
it’s a personal decision, but Forbes says housing activities will remain stagnant for the most part of the year, so maybe hold off a little.
Certain Ai companies are rumoured to be overvalued and might cause a market correction, I’d suggest you go with a managed portfolio, but even those don’t perform so well, so it’s best you reach out to a proper fiduciary to guide you, that’s what works for my spouse and I.
I'm new to this, where do I find a fiduciary, can you recommend one?
Sonya Lee Mitchell is the fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
I like how you calmly explain things vs Dave Ramsey being negative and calling everything and everyone stupid.
I'd rather an equity loan. HELOCs have fluctuating interest rates. I'm not in the financial position to afford fluctuating interest rates.
Line of credit - that makes a lot of sense of how Matt explains it.
Awesome!
This guy is smart. I'm glad I found this channel.
Awesome!
The HELOC is really a best kept secret if you doing the business right.
Awesome!
My firt time listening to you, and absolutely loved how everything was explained. THANK YOU
Awesome!
Exactly what I needed to start my trucking company
Tell them about the HELOC fluctuating interest rates my brother. One has to be able to afford fluctuating interest rates.
Only reason we clicked on this video, want a complete explanation on that.
He mentioned the rates can go up or down depending on what goins on in the market
MG! Loved how you explained this topic. I just was hired into the mortgage business and is absorbing all the insight possible
#askMG
Although the bank can’t ensure you use the heloc for rehab purposes, are there IRS tax implications when using the money for other purposes?
Be wise with the money 😮
Invest smart , don’t spend the money in dumb things !
All In One Loan is the best loan product in the market. Search it. Your house will be paid off in 1/3 the time, save hundreds of thousands in mortgage interest, have a safety net if you lose your job and have access to your equity 24/7/365 up to 30 years.
I feel like the system will fx!$ you anyways. I don't like either the HELOC or HELOAN.
Is there any other way you can tap into your equity w/o taking another loan?
Yup, sell your home. Especially if you fix it up and then sell it.
Big lessons here thank you broo
#AskMG What if I want to pull out a home equity loan for a home addition? Which would you recommend? I don't plan on investing in other money making properties so doesn't it make more sense to stick with a home equity loan for the stable payments? This would be after I work with an architect and contract to provide a quote for the project. I would take out more than the quote just in case.
This is exactly my situation. I’m converting my garage into a 2 bedroom apartment for my son. I’m not investing in other properties but my own.
@@roseortega807 In 2 months he hasn't answered my question. Guess we'll never know his take on home additions.
@@Kagamid and 10 months ago the fixed rates were lower ,,, good luck
I just wanna pay of high interest credit card debt, and finish my basement, should i just take out a pension loan?
This really helped me!!! I think I decided on a he-loan, my property has no mortgage it’s worth about 250k as is ima us it for 100k in renovations, should be worth about 400 then doing a heloc in a few yrs to purchase another property
I hope Jordana has a cushion in case her tenant moves or can’t pay rent. That’s a lot of debt
This is brilliant. We've been considering a HELOC to invest in another home ourselves. I have never heard it explained so concisely. I will definitely be using this video to show to my real estate clients looking to invest!
Awesome!
#AskMG Here’s my question….I have about 600k equity in my home. I need 180k to convert my garage into a 2 bedroom apartment. In California we can do this. So in my case I need a set amount of money and nothing else what makes more sense for me? The HELOC doesn’t sound practical to me but what do you think??
I was also told credit unions are getting tighter on these loans.
of course!! second mortgages are either getting defaulted on cause the client cant pay it back or they are getting refinanced so the bank loses money and in todays economy its too much of a risk.
If you take 100% of the heloc credit line......will that destroy you fico score. Will you get higher rate bc of lower fico score
Getting more black people in debt won’t help the herd ijs
Debt will always exist. You either owe a little or you owe a lot. But you will always owe. So, enjoy life and take chances to be happy.
Great video! Great explanation between HELOC VS HELOAN. Thanks.
Awesome!
Why would anyone want a credit card against there home that can be called at will. Helocs are insanity bro.
How does an equity loan work and is it good ideal?
But it's never your home. Every millionaire and billionaire knows this.
HELOC interest rates are never locked in. They can go up.
I've been approved for 30k for a heloc. I only need about 13k to pay off some debt. Can I just take what I need and nothing more?
yes
I need a person to discuss my situation with to consider my options.
I have a lot I own in a neighborhood and I want to build a house on it for a rental. Should I get a construction loan or use some other loan vehicle?
Thank you so much MG for simplifying the HELOC process! Im able to make a concrete decision 😊
Awesome!