How To Use A 2nd Lien HELOC To Pay Off Debt Fast
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- Опубликовано: 18 дек 2022
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Learn more from multiple real life case studies in this playlist using a second lien HELOC to rapidly pay off debt - ruclips.net/p/PLnF-b0Fck4LgKFY9N0vcKPYT1b8gQ3AY_
YOU ARE AMAZING. I LOVE YOUR VIDEOS/CLASS.
Thanks for the encouragement. Truly, we need faith + works to attain success in life. Nothing is free in this world.
Amen
This might be the video to show my wife to finally open her eyes to this system.... You explained it very well.
Thank you
Amen
Amen
The 2 reasons why this example works are :
1. HELOC rate at 4.75% is lower than that of the rest of the debt (even lower than that of the mortgage which is NOT going to happen in most of the cases, especially currently)
2. Extra payments made every month to reduce the debt faster
No white board is needed.
Yes if you pay extra towards your debt you will reduce it faster
Yes if you replace a higher interest loan with a lower interest loan you will save on interest
It is a no brainer really. The first 3 loans are about 54K$ which is less than the available HELOC line of about $60K. It makes sense to pay them off immediately from the HELOC, which will increase the balance of the HELOC by 54k$ and then pay down the HELOC .. This will save over $2 000 in interest the first year alone.
After that the remaining amount in the HELOC should be used to pay off as much as possible of the other HELOC at 6.74%
ok you are measuring one metric which is the interest rate I get it. I value other benefits the HELOC brings me overtime.
Let's remember not everyone has the financial education you and I do so what may come easy making extra payments is just not what the majority of people do. If it were so easy everyone would be debt free. There are RUclips channels dedicated to show people how to make extra payments with whiteboards and spreadsheets.
Wow! Fantastic!!
Amen
Love the editing ❤️
Amen
Great work brother!
Amen
Excellent case on how I can use my second line HELOC well and move quicker as compared to snowballing.
Thanks Denzel!
Amen
Great Case Study for those who serve.
Amen
YOU BETTER COME ON A PREACH!!!!! I HEAR YOU😂😂😂
Amen
Wow this blew my mind. I’ve been using my heloc so inefficiently.
Happy to help I have a playlist here that focuses on 2nd lien HELOC since you have one - ruclips.net/p/PLnF-b0Fck4LgKFY9N0vcKPYT1b8gQ3AY_
Amen
Great stuff.
As usual!!
Amen
When you're showing how long it takes to pay iff debt using conventional method at around minute 20, i believe you forgot to deduct the 10k cash on hand. You did it with the VB method. So, actually you should be able to pay off the first loan by Nov using the conventional method including interest.
Listening to one of your videos, you stated that you assist moms. How do I find out if I might be one of these people?
Hello Denzel, Thanks for sharing your knowledge. Which bank do you recommend for HELOC for someone in VA? Thanks
Amen
Dear Denzel calling many different banks on info on HELOC and they are telling me my HELOC will be party amortized. Is this usual?? Please advise me please
Hi Is there a template or calculator to punch in my numbers?
Hi Denzel,
Can you please show me how to use the second lien HELOC to pay off the mortgage faster? I am in Canada. I know you might not be able help me but if you can show me cashflow structure going in and coming out that will be great.
Amen
❤❤❤❤❤
This would have been great but the numbers being listed as they are on the board it's so hard to follow
Thank you for the feedback I will take that into account for next case study videos
Amen
Too confusing for me to use...but I will do my best.
Take your time you are watching some advanced videos if you go to my playlist you can start with the velocity banking pre-game work to prepare you for the more advanced material
Amen
Dumb to shift unsecured to secured. Seldom works out in real life, neat look on paper though
Can you explain a little more your position
Amen
This is exactly how alot lose their homes.
From what I can tell, most HELOC loan interest calculations are amortized, not simple daily calculated. Does that impact the viability of the velocity method?
All HELOCs are amortized interest after the draw period. During the draw period which is in the beginning the interest is simple calculated daily. In the contract with any HELOC they will show what the daily periodic rate is and that is how much interest you get charged per day typically on the due date of the HELOC. Once a HELOC has become amortized then the tool is no longer efficient for me. You can always renew the line to keep it open.
So, when I'm looking at my heloc calculator showing amortized payments, it's not accurate? I've been planning on starting this, but dropping down to the new balance to estimate the interest I will be paying.... is there a better way to estimate it for the draw period?
@@RedDragonProtection first make sure it is a HELOC not a home equity loan. You would take the balance owed and times it by the interest rate then divide by 365 that equals your daily periodic costs.
Amen
I didn't see how the interest was included. My Heloc is at 9% and each monthly "regular payment" includes the interest. Even when I move my income over, one of those payments will remove the interest as well as principal.
Same for the one i may get through BOA.. any case study for the one banks paid all creditors with your HELOC line
Amen
Hello, this might be a silly question but do you have your income direct deposited into the heloc? Or just add the funds. I'm on a fixed income and I'm new to this. Thanks so much for the info
I've heard a lot about paycheck parking in the HELOC, but am curious about the benefits of both
It is deposited directly into your HELOC.
👍
Denzel what is your rule of thumb on the percentage of heloc to use? I have 100K to use and my total debit is 60K. If I pay it all off in one chunk I would have almost $4K a month cashflow, should I do it all at once?
What is the interest rate on the HELOC and what is the interest rate on all of the other debts?
I usually do not borrow more than 66% of the line. I take cashflow times 12 to give me the chunk range. Would the total cashflow be 4k or are you gaining 4k after you pay everything off.
Would you pay off bills with a credit card that has a convenience fee?
Nope not worth it in most cases we are trying to avoid costs not add them. If the bill comes at a costs just pay from the checking account like you normally would with no added fees
@@DenzelNapoleonRodriguez makes sense, thanks for answering!
Is velocity banking for folks who have high interest rates only? Attacking high interest loans? What if you have a few smaller loans w/ really low interest (all under 5%)?
Only if the math makes sense I’m not going to borrow at a higher costs to pay off a debt at a lower costs. I always use debt snowball as my measurement stick to velocity banking. Notice how I said borrowing costs not interest rate. Look past the interest rate and focus on the actual cost of borrowing. If you have a line of credit rate at 8% and a amortized loan at 5% but you can bring your 8% rate down to say less than 2% then that might be worth taking a closer look
This seems like an overly complicated version of the Avalanche method. That being said, a lot of people go with the Snowball method because they need those easy wins to stay motivated.
If someone is in debt like this, the first thing to go should be those credit cards, in order to get rewards it means you have to spend and you don't want that mentality when trying to pay off debt. Pay cash whenever possible, otherwise debit, so you can actually feel the money being spent.
I appreciate your opinion what seems complicated to you can be simple to others that are willing to do the math and get faster results. This is not avalanche method that is a simple strategy not be confused by other methods. This method is using debt to pay off debt and offset interest in the process. Getting rewards is great whether you are in debt or not in debt. Money that I have to spend each month to live is a requirement for everyone but running those requirements through a credit card and paying it off in full to avoid interest is a simple math equation and you earn rewards in the process which increases cashflow which pays off debt faster that’s all.
@@DenzelNapoleonRodriguez people in debt don't tend to have this discipline and struggle with complex methods of paying off debt is what I'm saying. Even though they wouldn't get rewards and may pay a little more interest, it's going to be a simpler concept to use simple methods to pay off debt and not try a debt shell game that could easily end up backfiring.
@@Tialian what “people” are you referring? What is their income range?
@@DenzelNapoleonRodriguez "people in debt" of any income range
@@Tialian I’ve had the privilege of working with thousands of people of all different income ranges in debt and I don’t see this issue nearly as much as your presenting in fact. The people you speak of I work on day by day and there ability to build discipline is amazing and the results are incredible. I’m wondering if you speak to hundreds or thousands of people or can point me to the data that proves your point.
Who pays the chunk ? It’s automatically out of the heloc?
You do it is not automatic you are making manual withdrawal and deposits to and from the HELOC
@@DenzelNapoleonRodriguez I’m going to be booking with you, 200k equity not sure if I should go 1st position or 2nd on heloc I’d like to invest in real estate
Why touch the 0% CC before the 6.74% heloc ?
The card could have a high minimum payment. Which would mess up your cash flow. Ideally it should be the last thing to pay but it depends.
@@mra.4466
Most cards minimum are 2% of balance
Is there a Healthcare worker credit union or bank opportunity offered anywhere???
My guess is yes let’s do the research and find out
I was working/driving and brainstorming lol .. interesting idea!!!
@@karenwelch7980 I found one so far - www.nihfcu.org/home-equity-loans-lines/
@@karenwelch7980 and here is one more - www.hefcu.com/Borrow/Real-Estate#heloc
So awesome THX!!!
The interest of my 2nd position Heloc is eating away at my cash flow.
You can look at a different bank and get an intro rate this way you don’t deal with the same high rate
@@DenzelNapoleonRodriguez Thank you for your response! With a credit score of 615 and a dti of 55%, it’ll be a long shot, but I’ll inquire.
@@humbleduke6745 what is the current rate on the HELOC? What was the rate when you first started? How long have you had the HELOC? How much do you owe on the HELOC?
You can inquire first not apply follow my rules on my videos under the playlist all about the line of credit. My response was quick but the actual application can take 3-6 months. My point is there is a solution I don’t have to stay with my debt tool for the duration of my journey to getting out of debt
@@DenzelNapoleonRodriguez The current rate is 10.5% fixed, which was also the intro rate. I’ve had the HELOC since August 2022. I owe $80,774, with a limit of $85,000.
@@humbleduke6745 got so you are currently in an over leveraged position I’m assuming you were not using velocity banking correct me if I’m wrong. If so getting another HELOC would just take more time. My goal would be to build a relationship with a new bank, build the credit up to where that new bank would want it follow all their criteria then apply take the guessing work out of it.
STOP RIPPING OFF VANNTASTIC...
lol 😂 Christy Vann and I are allies, friends, she is a client of mine I’ve worked personally with her and we have spent time together in person. I along with a business partner of mine encouraged her to start her RUclips channel. I think you are trying to create conflict and it won’t work
I wish you the best maybe you’ll change your views