Taking a HELOC to pay off mortgage is taking on more risk for (best case) a very modest reduction in interest payment (and in most cases it will actually cost more) It also assumes that all extra cash is used to pay off the HELOC. Assuming it is a good idea to pay off mortage faster (as opposed to saving or investing) the simplest and least risky way is to combine shorter duration mortgage (which have lower interest rate) and additional mortage payments whenever it makes sense
Michael, I think it can work for pay check to pay check. IF the person is disciplined, it frees up some of their cashflow. For example, if they are paying $900 or likely more for rent, the first lean heloc can greatly reduce that payment towards a house. This can carry a person through hard times and even allow them to grow equity fast because their monthly heloc payment can be so very small in comparison to rent. I know first hand because this is what my husban and I have done and, albeit it has taken a few years, but it is paying off big time now. Am I missing something?
I have been researching this along with Velocity banking. I am definitely looking into taking a 1st lien HELOC. I love the idea. I already have a 2nd lien HELOC.
I thought I was ready for a HELOC. Turns out, I wasn't. Doesn't matter anymore. I sold my house and bought an RV. Loving the RV life. See you on the road!
@@AndrewWong08 no they really aren't, did you see the video? They went up to 15%, and it only added 8 months to the payoff. I would hope you would keep reviewing the information until you understand it more thoroughly.
What podcast, or videos can I hear more about your additional tips on excelling the payoff of my first lean HELOC here in Hawaii. Additional tips above and beyond just dumping whole paychecks into HELOC & rinse & repeat. Many mahalos in advance.
Idk if this makes any sense but can I get a 1st lien purchase heloc and then take some money out to put it towards another down payment on a second 1st lien purchase heloc?
The purchase heloc is going to be based on the purchase price, not the appraised value. So, you wouldn't have access to equity that you didn't already put in there with your required down payment.
I have a heloc right now with a balance of $63,000 and current interest is at 8%. I have also a mortgage with a balance of $48,000 with a current interest rate of 3.25%. Which one should I pay off first . The best move or to save money and interest . Thank you
Amortorized loans are the WORSE LOANS EVER. If you can be disciplined you can get away from them. I have 59K left I bought my house 2 years ago. I did most of it using a PLOC. Im moving to a HELOC next month. Dumping all of your income in one place is the best. Its not free money, but you have a lot more flexibility. The AMR loans move at a SNAILS PACE with ZERO flexibilty. Its a financial prision.
So is your example basically saying you are paying a net $5K to your HELOC every month? And within the $7 of expenses, that includes all your bills and expenses and all discretionary spending each month?
It's a little better than that because the HELOC is used as a checking account, so all income goes into it. The nature of the HELOC recasts every day for free, hence why you need to be strategic about when and how you pay your expenses out of it.
Seriously though, who has $12,000 per month coming in? I want to understand, but the 5-7 year scenario seems (being nice here) a little far fetched for real people.
$12,000 is just an example. However, we have other examples of folks making $4-5K/month and executing the strategy perfectly. The key is cash flow positivity in relation to the debt load. Someone making $4k/month is not a fit if they have a $600k mortgage. But if they have a $160k mortgage and no other debt, fine.
Taking a HELOC to pay off mortgage is taking on more risk for (best case) a very modest reduction in interest payment (and in most cases it will actually cost more)
It also assumes that all extra cash is used to pay off the HELOC.
Assuming it is a good idea to pay off mortage faster (as opposed to saving or investing) the simplest and least risky way is to combine shorter duration mortgage (which have lower interest rate) and additional mortage payments whenever it makes sense
Watch our other videos. We cover this topic and have for over 10 years. In fact, there are hundreds of banks offering promo rates below 5% on HELOCs.
Michael, I think it can work for pay check to pay check. IF the person is disciplined, it frees up some of their cashflow. For example, if they are paying $900 or likely more for rent, the first lean heloc can greatly reduce that payment towards a house. This can carry a person through hard times and even allow them to grow equity fast because their monthly heloc payment can be so very small in comparison to rent. I know first hand because this is what my husban and I have done and, albeit it has taken a few years, but it is paying off big time now. Am I missing something?
I have been researching this along with Velocity banking. I am definitely looking into taking a 1st lien HELOC. I love the idea. I already have a 2nd lien HELOC.
Go for it!
I thought I was ready for a HELOC. Turns out, I wasn't. Doesn't matter anymore. I sold my house and bought an RV. Loving the RV life. See you on the road!
That is awesome!
HELOCs are way too expensive right now.
@@AndrewWong08 no they really aren't, did you see the video? They went up to 15%, and it only added 8 months to the payoff.
I would hope you would keep reviewing the information until you understand it more thoroughly.
Why does it show that I'm subscribed but it won't allow me to receive notifications?
What podcast, or videos can I hear more about your additional tips on excelling the payoff of my first lean HELOC here in Hawaii. Additional tips above and beyond just dumping whole paychecks into HELOC & rinse & repeat.
Many mahalos in advance.
Idk if this makes any sense but can I get a 1st lien purchase heloc and then take some money out to put it towards another down payment on a second 1st lien purchase heloc?
The purchase heloc is going to be based on the purchase price, not the appraised value. So, you wouldn't have access to equity that you didn't already put in there with your required down payment.
I have a heloc right now with a balance of $63,000 and current interest is at 8%. I have also a mortgage with a balance of $48,000 with a current interest rate of 3.25%. Which one should I pay off first . The best move or to save money and interest . Thank you
Amortorized loans are the WORSE LOANS EVER. If you can be disciplined you can get away from them. I have 59K left I bought my house 2 years ago. I did most of it using a PLOC. Im moving to a HELOC next month. Dumping all of your income in one place is the best. Its not free money, but you have a lot more flexibility. The AMR loans move at a SNAILS PACE with ZERO flexibilty. Its a financial prision.
Amen! Great job!
can your strategy work in canada? can i get a HELOC in canada?
What calculator is that?
Great explanation on the differences!
Thanks for watching!
So is your example basically saying you are paying a net $5K to your HELOC every month? And within the $7 of expenses, that includes all your bills and expenses and all discretionary spending each month?
It's a little better than that because the HELOC is used as a checking account, so all income goes into it. The nature of the HELOC recasts every day for free, hence why you need to be strategic about when and how you pay your expenses out of it.
I found out today I need 150k to pay off my mortgage I’m waiting to have more equity in my home to try this strategy.
If you have 10% equity in your home now, I wouldn't wait.
I still don’t get it after 3 years of hearing different people.
We have free courses that dive deeper on our site.
Seriously though, who has $12,000 per month coming in? I want to understand, but the 5-7 year scenario seems (being nice here) a little far fetched for real people.
$12,000 is just an example. However, we have other examples of folks making $4-5K/month and executing the strategy perfectly. The key is cash flow positivity in relation to the debt load. Someone making $4k/month is not a fit if they have a $600k mortgage. But if they have a $160k mortgage and no other debt, fine.
lol
It's all relative bro. Stop focusing on the number and focus on the concept. Tailor it to your own situation. Don't be so dense. Geeze.