I just launched a new course, "How to Get the Right HELOC for Velocity Banking". Check it out at the link below: couplescreatecashflow.mykajabi.com/how-to-get-the-right-heloc-for-velocity-banking
The idea of this is cool. Unfortunately a lot of the people who would try this are already struggling to manage their budget. This can get out of hand really fast and end up in way more debt than before. If you choose to go this route please be careful. Maybe try budgeting properly first.
I totally agree. Proper budget management needs to happen BEFORE you start Velocity Banking. There must be significant cashflow each month or else your balance can get out of control.
Great stuff here, Question: I have a business HELOC that I can tap into through my banker. But it flows through the biz checking account. So when you say deposit income into the heloc, basically I deposit it into the biz checking account and then make a payment to the principal of my heloc of my checking? Because there isn’t a way for me to go straight into the heloc, it only offers to make a payment of interest or principle online.
Unless I missed it, I see no interest rate for the HELOC. HELOCs come with interest rates that are higher than mortgages plus there are fees All in all the HELOC approach is risky; complex and generally more expensive than paying down loans directly. Plus it requires using ALL the available income left after the expenses In this example the couple should kill the CC debt asap using their cash flow (it will take about 8 months) and then attack the student debt. Mortgage at 3% and car at 4% are such low interests that they better be left alone
@@thearmy88ify Define "amortized interest"... Hint, it does not exist To keep things simple interest percentage is a universal measure just like a mile or a kilometer is. You will ALWAYS pay more interest if your rate is 8% than if your rate is 4%
To clarify, the interest rate will calculate the same, whether the balance is held in an amortized loan or a non-amortized loan. The difference is in the payment. With an amortized loan, the total cost of the loan is broken down evenly over the lifetime of the loan, keeping the payment identical each month. With a non-amortized loan, a payment is based on the interest costs associated with the loan, causing payments to decrease over time, as the balance decreases. In America, most people do not live in their homes for 30 years. They typically move or refinance by year 7, restarting their loan term. Even at 3% interest, a 30 year mortgage averages a volume of interest paid in the first 4 years of 56%, meaning that over the course of the first 84 months, only 44% of your payments went to principal. With the Velocity Banking approach, you use every dollar you earn at all times to continually pay down your total debt balance, which lowers your interest volume, even if the rate is higher. It's about how and when the interest is calculated as well. With a mortgage, you are paying an interest fee once per month. With a HELOC, you are accumulating interest based on the daily balance. So, if you can keep your daily balance as low as possible, you can pay the least amount of interest. So, if you have a $100k balance on a mortgage and a $100k balance on a HELOC with the same interest rate, the HELOC will pay down faster. If you have a $100k balance at 8% and another $100k balance at 4%, your interest costs PER MONTH will be higher at the 8% rate, but you need to factor in the term of the loan and the frequency that the interest is compounded.
Shared your content to my family members I have a heloc and been wanting to learn how to do this to help my family do this, but its so complex do you do coaching?
Yes, please email me at couplescreatecashflow@gmail.com to get started with coaching. I offer a free session to discuss whether or not we're a good fit for each other.
Hi thanks for the content Question: the chunk should be the cash flow or the 66% or is it cash flow and the 66%? Basically do i need one of the tow or both
Hi Melkiz, good question! We use the annual cash flow as a starting point and then we look at whether that amount will fit within 2/3rds of the credit limit on the HELOC. If the credit limit x .66 is less than your chunk amount, it may be that you have to reduce your chunk amount in order to maintain a good buffer in your line of credit. Some people do 6 month chunks, so that would be an alternative way to deal with a lower credit limit.
I have a question. So if i am putting all my paycheck into the heloc, what am i paying my other bills with at are not part of the chunk? If it is a cc that is paying that stuff. What are you using to pay that CC?
You can make it simple and only use one credit card to pay as many bills as possible (usually rent and mortgage payments would come directly from the HELOC). Then use the HELOC to pay the credit card each month.
@@greggpurviance7252 I did it and it worked 🤷🏾♂️. Most people that are watching these videos trying learn different strategies and you’re just trying to discourage them. If it didn’t work for you because of your inability to be responsible with your HELOC….just say that.
@@RJ-ph5zg Officially had a HELOC when I refinanced my house years ago, paid it off early. No credit card debts (do have credit cards, paid monthly, like my electric bill Dave Ramsey) or car loans or personal loans or student loans. There are two issues with transferring unsecured debt to HELOCs. 1. A.. H.... can go after your house since the debt is now secured by your house, & yes, I know they are 2nd. 2. If you don't deal with the original problem that motivated using a debt plan, many will be in deeper trouble than before. Glad it worked for you
I appreciate your concern, but a HELOC is a safer banking tool than a credit card or a car loan, yet many people qualify for those and feel they are a normal part of life. Just because a tool exists does not mean that it is either good or bad. It's all about the person using the tool and the strategy behind it.
Dave Ramsey has great information to get you started down the right path to financial security. I've found that after I started with Dave's material, I found that there were ways to fully understand and appreciate banking tools that are not conventional as a way to meet my financial goals. HELOCs are neither good nor bad, they are a tool and if you use them well, you will find success. If you use them poorly, you'll find them to be bad.
Yes, you'd run your expenses through a credit card (to get the cash-back rewards and delay the payment) and then pay off the credit card using the HELOC. Then you'd be putting your paychecks directly into the HELOC to pay that down as fast as possible.
I just launched a new course, "How to Get the Right HELOC for Velocity Banking". Check it out at the link below:
couplescreatecashflow.mykajabi.com/how-to-get-the-right-heloc-for-velocity-banking
what lenders do you use?
Link doesn't work
Link isn't working
Thank you for educating and truly caring. Your videos are excellent.
Our HELOC had a fixed rate, but that was with the local credit union.
Good content thanks brother
The idea of this is cool. Unfortunately a lot of the people who would try this are already struggling to manage their budget. This can get out of hand really fast and end up in way more debt than before.
If you choose to go this route please be careful. Maybe try budgeting properly first.
I totally agree. Proper budget management needs to happen BEFORE you start Velocity Banking. There must be significant cashflow each month or else your balance can get out of control.
Great stuff here, Question: I have a business HELOC that I can tap into through my banker. But it flows through the biz checking account. So when you say deposit income into the heloc, basically I deposit it into the biz checking account and then make a payment to the principal of my heloc of my checking? Because there isn’t a way for me to go straight into the heloc, it only offers to make a payment of interest or principle online.
Unless I missed it, I see no interest rate for the HELOC. HELOCs come with interest rates that are higher than mortgages plus there are fees
All in all the HELOC approach is risky; complex and generally more expensive than paying down loans directly. Plus it requires using ALL the available income left after the expenses
In this example the couple should kill the CC debt asap using their cash flow (it will take about 8 months) and then attack the student debt. Mortgage at 3% and car at 4% are such low interests that they better be left alone
Mortgage interest is amortized so even at 3 or 4%, you are paying much more than an 8% loan.
@@thearmy88ify Define "amortized interest"... Hint, it does not exist
To keep things simple interest percentage is a universal measure just like a mile or a kilometer is. You will ALWAYS pay more interest if your rate is 8% than if your rate is 4%
To clarify, the interest rate will calculate the same, whether the balance is held in an amortized loan or a non-amortized loan. The difference is in the payment. With an amortized loan, the total cost of the loan is broken down evenly over the lifetime of the loan, keeping the payment identical each month. With a non-amortized loan, a payment is based on the interest costs associated with the loan, causing payments to decrease over time, as the balance decreases. In America, most people do not live in their homes for 30 years. They typically move or refinance by year 7, restarting their loan term. Even at 3% interest, a 30 year mortgage averages a volume of interest paid in the first 4 years of 56%, meaning that over the course of the first 84 months, only 44% of your payments went to principal.
With the Velocity Banking approach, you use every dollar you earn at all times to continually pay down your total debt balance, which lowers your interest volume, even if the rate is higher. It's about how and when the interest is calculated as well. With a mortgage, you are paying an interest fee once per month. With a HELOC, you are accumulating interest based on the daily balance. So, if you can keep your daily balance as low as possible, you can pay the least amount of interest.
So, if you have a $100k balance on a mortgage and a $100k balance on a HELOC with the same interest rate, the HELOC will pay down faster. If you have a $100k balance at 8% and another $100k balance at 4%, your interest costs PER MONTH will be higher at the 8% rate, but you need to factor in the term of the loan and the frequency that the interest is compounded.
Shared your content to my family members
I have a heloc and been wanting to learn how to do this to help my family do this, but its so complex do you do coaching?
Yes, please email me at couplescreatecashflow@gmail.com to get started with coaching. I offer a free session to discuss whether or not we're a good fit for each other.
@@couplescreatecashflow137 just did thanks
Thank you
You're welcome!
Algorithmic comment🤙🏾
I love my HELOC !!
Hi thanks for the content
Question: the chunk should be the cash flow or the 66% or is it cash flow and the 66%? Basically do i need one of the tow or both
Hi Melkiz, good question! We use the annual cash flow as a starting point and then we look at whether that amount will fit within 2/3rds of the credit limit on the HELOC. If the credit limit x .66 is less than your chunk amount, it may be that you have to reduce your chunk amount in order to maintain a good buffer in your line of credit. Some people do 6 month chunks, so that would be an alternative way to deal with a lower credit limit.
@@couplescreatecashflow137 in my case my heloc limit is 25k but I only have 10k available left, do i multiply 66%×25 or 10?
@@PastorMelquicedec You would be multiplying the total line limit by 66%, which in this case would be $16,500
@@couplescreatecashflow137 thanks
Look into PLOC!!
I have a question. So if i am putting all my paycheck into the heloc, what am i paying my other bills with at are not part of the chunk? If it is a cc that is paying that stuff. What are you using to pay that CC?
You can make it simple and only use one credit card to pay as many bills as possible (usually rent and mortgage payments would come directly from the HELOC). Then use the HELOC to pay the credit card each month.
Great content!
Always dumb to move unsecured debt to secured. Complex mess that rarely works out in the real world
You’re under everyone’s video saying the same comment.
@@RJ-ph5zg because it is true under everyone who suggests that unwise plan. PS only 2 or 3 anyway
@@greggpurviance7252 I did it and it worked 🤷🏾♂️. Most people that are watching these videos trying learn different strategies and you’re just trying to discourage them. If it didn’t work for you because of your inability to be responsible with your HELOC….just say that.
@@RJ-ph5zg Officially had a HELOC when I refinanced my house years ago, paid it off early. No credit card debts (do have credit cards, paid monthly, like my electric bill Dave Ramsey) or car loans or personal loans or student loans.
There are two issues with transferring unsecured debt to HELOCs. 1. A.. H.... can go after your house since the debt is now secured by your house, & yes, I know they are 2nd. 2. If you don't deal with the original problem that motivated using a debt plan, many will be in deeper trouble than before.
Glad it worked for you
@@RJ-ph5zg What worked, exactly ? Shows us the numbers
HELOC equals risk of foreclosure people.
I appreciate your concern, but a HELOC is a safer banking tool than a credit card or a car loan, yet many people qualify for those and feel they are a normal part of life. Just because a tool exists does not mean that it is either good or bad. It's all about the person using the tool and the strategy behind it.
Lol! A HELOC- the credit card of the mortgage world! You didn’t pay off your debt, you moved it. Ridiculous. Follow Dave Ramsey.
You have no idea what you’re talking about
Dave Ramsey has great information to get you started down the right path to financial security. I've found that after I started with Dave's material, I found that there were ways to fully understand and appreciate banking tools that are not conventional as a way to meet my financial goals. HELOCs are neither good nor bad, they are a tool and if you use them well, you will find success. If you use them poorly, you'll find them to be bad.
Deep dive ? Slang?😊
So I we pay the credit card with the heloc
Yes, you'd run your expenses through a credit card (to get the cash-back rewards and delay the payment) and then pay off the credit card using the HELOC. Then you'd be putting your paychecks directly into the HELOC to pay that down as fast as possible.
Have a heloc. This is complex I dont quite get it. But spunds g99d.