The key problem is that the HELOC is an adjustable rate ...IE it can go up up up . Get more discussion on impact of interest rate climb
@downtownbillyandthenewjivefive
5 жыл бұрын
Only relevant if you plan on making smaller payments and not using your HELOC as a checking account.
@ReplaceYourUniversity
4 жыл бұрын
Given that this post is two years old...did rates go up, up, up? Also, some banks have fixed rate helocs if interest rate is more important to you than rate of interest.
@kevinrichardson3961
4 жыл бұрын
I have a few questions, 1) What bank/mortgage company is going to allow you refinance into a HELCO for $300K (as in your example)? 2) If you receive a HELCO for the remaining balance of your current Mortgage, aren't you just shifting your debt? 3) Is it true that for banks who will allow refinancing through a HELOC can change the rate weekly monthly? Also can that bank also call on the loan at any given time?
@ReplaceYourUniversity
4 жыл бұрын
Great questions! 1) Hundreds of banks will allow you to do this if you ask the right questions and structured the proper way with the correct product. We have investigated over a thousand banks and credit unions to offer recommendations to our clients. 2) You are shifting debt, but onto a FAR more efficient debt tool that is open-end. 3) Some HELOCs are variable, some are fixed and some are hybrids. Rates have been low for a few decades and that trend doesn't look to be changing anytime soon. However, the key is focusing on total interest paid as opposed to interest rate. TIME and BALANCE are far more important than interest rate. 4) Banks aren't in the business of calling loans, they want to make loans and earn interest. By being in First Lien Position, you massively reduce the risk of loans being called due no different than a first lien mortgage.
@makemagamad3370
Жыл бұрын
This is great news but I owned about 8 properties and 4 have mortgages and 4 don’t. I am seriously contemplating going to my credit union to pitch this. I know the interest rate is high right now but this sounds good.
@stephenjanssen7173
5 жыл бұрын
Here's another dimension to fit in to the mix somewhere. If you are "living" out of the all-in-one bank account for 5-9 years or however long it takes to pay off mortgage, no focus or funds are being given to investment interests (not short term interest plus savings) that could be paying 6-8% Tax Free (in Canada anyway).
@Bob-fu1hn
6 жыл бұрын
Hi-weekly payments are not accepted by most banks
@jbm0745
6 жыл бұрын
There is a major problem that I'm finding but haven't seen addressed. A HELOC is a home equity line of credit meaning you can only borrow up to the equity in your home. And in most cases you can only borrow up to 80% of your equity. So if you have a $300k home with $60k in equity you can only get a HELOC for $48k. The balance would have to be tied up in some other type of loan such a traditional fixed. I can only see this strategy work with you having no mortgage and only a HELOC is if you have over a 55% equity position.
@chrisrolfe4630
6 жыл бұрын
Missingthe point,,this can be your first lean. position... dGet a way from the name......understand the product..1
@DANIEL-ls5ku
6 жыл бұрын
With Heloc you pay higher interest rates than mortgage, as well as most of banks will charge annual fees to have one.
@ReplaceYourUniversity
6 жыл бұрын
Don O Are you sure about that? How many banks have you called Don?
@DANIEL-ls5ku
6 жыл бұрын
about 3 already..
@ReplaceYourUniversity
6 жыл бұрын
We have 200 on our list that we have personally called. We have a lady named Michelle who all she does is calls banks for us. I can promise you that the information you posted is incorrect.
@DANIEL-ls5ku
6 жыл бұрын
Are you saying that Heloc interest is lower than that of a home mortgage?
@ReplaceYourUniversity
6 жыл бұрын
Don O absolutely. 1. We have helocs that have really low intro rates and overall they are lower for the most part. In fact, you can even google this topic and you will find articles about how variables rate loans are more popular in times like this because the rate is lower. Don’t take my word for it. Look it up. 2. I have $500 that says that even if it you have a lower fixed rate mortgage and I have a higher rate with my heloc, that I would still pay less interest than you would. Its just math, not magic.
@nikhilpatel476
7 жыл бұрын
I'm in the UK there are no HELOC loans available here are they're
@MyHeaven
7 жыл бұрын
brilliant ideas. Thank you
@ac9452
6 жыл бұрын
Sorry... this is BS. First and foremost, a HELOC historically carries a significantly higher interest rate than does a fixed rate first mortgage. Unless you deal with facts around Interest rate and terms, the advice given here is incomplete. One more minor detail: HELOC is an adjustable rate vehicle, so the interest rate can and does GO UP. Keep your fixed rate mortgage and make additional principal payments each month, quarterly, semi-annually or annually to pay your loan off earlier.
@alextotherescue
5 жыл бұрын
Agreed... It is actually mind-blowing this guy is giving this advice... Feel sorry for the folks who end up doing it.
@imatterudont1289
5 жыл бұрын
Art Collins true a heloc carries a higher interest rate and goes up, BUT you still will save thousands more on a heloc compared to a traditional mortgage.. when you treat your heloc like a checking account and deposit your income into it, you’ll see that the interest rate won’t matter... the key is to be cash flow positive though.. it’s not magic it’s math..
@EdpFromOhio
5 жыл бұрын
Actually just priced a HELOC 85% LTV and the rate is lower than my current mtg. Easily can get it in the 4% range.
@gatitao3014
Жыл бұрын
It does make some sense, however would you recommend this to someone who does not make more than they spend, or living pay check to paycheck?
@ReplaceYourUniversity
Жыл бұрын
Definitely not. Must have already mastered your budget and have a surplus.
@futureprogrammer880
7 жыл бұрын
but does that way have higher interest rates?
@migueltorres2532
7 жыл бұрын
Hello Michael, I just purchased my home, made my first payment could I go into a HELOC right away?
@ericasmith2597
4 жыл бұрын
How can you obtain a HELOC for the total of your mortgage?
@kevinrichardson3961
4 жыл бұрын
My thoughts as well. That's the part I'm not understanding.
@ReplaceYourUniversity
4 жыл бұрын
Refinance is not getting an additional loan on top of your mortgage. It's Replacing Your Mortgage with a simple refinance.
@user-yl5el5sn9o
3 жыл бұрын
@@ReplaceYourUniversity confusciousment
@user-yl5el5sn9o
3 жыл бұрын
@@ReplaceYourUniversity so you are saying a "simple refinance" can replace a mortgage loan with a HELOC? please explain
@ReplaceYourUniversity
3 жыл бұрын
@@user-yl5el5sn9o That is correct. You can refinance your existing mortgage (in it's entirety) into a first lien position HELOC. The difference is between thinking of a HELOC in 2nd lien versus 1st lien.
@imortgagebrokerbrisbane4567
6 жыл бұрын
Ideas are great but this will work on Australia. Thanks
@learnsomethingneweveryday1539
6 жыл бұрын
is there any benefits to setting the mortgage payment date early in the month (1st) compared to 25th of the month
@markanderson4004
7 жыл бұрын
How does this work? I thought a HELOC used a percentage of the equity in the home. ie 300,000 mortgage. 100,000 equity, heloc of 80 percent aprox or 80,000 available access
@pnoywarrior1
6 жыл бұрын
Mark Anderson I'm with you on that. He didn't even explain why its better than just paying straight towards the principal. No risk that way lol
@Teach75
6 жыл бұрын
pnoywarrior1 I don't know the exact figures but a mortgage uses complex interest and a HELOC uses simple interest. When paying a mortgage off, you pay mostly interest first, even if adding to the principal. With a all your money being in a HELOC the principal is able to go down a lot quicker therefore you pay a lot less interest. Research it...it does make a lot of sense. I do wonder about the amount you could get on HELOC however, I can't imagine them giving you the total amount of the loan. I too, question that.
@williamnewman388
6 жыл бұрын
Reason why you would get a HELOC and not pay to the principal is so you can use the money you put in to the HELOC if something was to come up, like a emergency or unexpected expenses. When you put money in to the principal it's gone. You can use that money again. The money you have left over every month, the money that would sit in your savings account goes towards the principal balance every month
@ReplaceYourUniversity
4 жыл бұрын
The major difference is FIRST lien position versus SECOND lien position. We advocate for FIRST lien position for this reason as well as first lien increases cash flow positivity which increases speed.
@bobwayne911
4 жыл бұрын
Why haven't you guys made some recent YT videos
@ReplaceYourUniversity
4 жыл бұрын
Great timing. We are adding new videos as we speak. We are almost done with our new podcasting/video studio and will be rolling out new videos every week next month.
@jeffreygardner2096
5 ай бұрын
What do mean put all your money,
@ReplaceYourUniversity
5 ай бұрын
All of it. All cash flow and liquid savings.
@learnsomethingneweveryday1539
6 жыл бұрын
just remortgaging now. By Tuesday it would of been completed and 1st payment is scheduled for 2nd July. (1st July payment is for June I'm told) No biweekly schedule available but your saying I can create it by paying a full payment asap and then pay half a months payment when exactly? Do I pay full payment which includes interest?
@victorzamudio9811
Жыл бұрын
do i have to refi for a heloc?
@ReplaceYourUniversity
Жыл бұрын
Not necessarily. There are two heloc options: 1st Lien which requires a full refinance. 2nd Lien which is line on top of your mortgage. Both scenarios work, just depends on your situation which one makes more sense.
@wafflessplayz5588
4 жыл бұрын
what happens if the bank calls the line of credit or would that be in teh language I remember many years ago when I use to work for Chase in years 2008 or so they would close out clients heloc converting it into a loan
@ReplaceYourUniversity
3 жыл бұрын
There is a big difference between FIRST lien position HELOCs and SECOND lien position HELOCs. First lien better protects you against being frozen because it protects the bank.
@JoseMoralesOfficial
6 жыл бұрын
What if you currently have mortgage insurance? How do property taxes work. Currently they are part of my payment.
@russellharper6583
6 жыл бұрын
Good Point
@russellharper6583
6 жыл бұрын
dont forget insurance that is part of the pmt.
@cju4300
4 жыл бұрын
Mortgage insurance is a scam. It will not help you. It is there to help the banks at your expense.
@JoseMoralesOfficial
4 жыл бұрын
C Ju i agree! I hate it. But I have to refinance or something to drop it off. Otherwise I have to keep it until mortgage is paid off. Waste of money.
@ReplaceYourUniversity
4 жыл бұрын
HELOCs do not carry mortgage insurance. Even above 80% LTV. You would pay property taxes with your HELOC at the date it's due. You do NOT want to escrow taxes and insurance.
@suburbanzoo7442
Жыл бұрын
this sounds like the all in one loan. ?????
@ReplaceYourUniversity
Жыл бұрын
We have found several banks that do the same structure as the AIO but with a fraction of the costs.
@alanstapleton6877
6 жыл бұрын
My mortgage is interest only for 10 years and then it converts to principal and interest for another 20 years. In the last 6 years, I added extra money to my interest only payments so I reduced the principal balance owed by half. My plan is to continue paying extra for the next 4 years, further reducing my principal balance. Is a HELOC going to pay off the balance faster than my plan?
@deanmalamatenios2084
5 жыл бұрын
This plan works the same way
@ReplaceYourUniversity
4 жыл бұрын
Keep in mind, a HELOC can utilize 100% of your income because it's open-end line of credit. So you can and should use it like a checking account. A mortgage cannot utilize 100% of your cash flow because it's closed-end.
@joemarques5242
7 жыл бұрын
I was 10 years away to finishing paying my 30 year mortgage but I just refinance and got my self again into another 30 year mortgage, the reason I did this is because I need the money to invest flipping homes. I took 70% out but my question is if I can still do what you teach. Than You.
@joemarques5242
7 жыл бұрын
So what should be my first step?
@joemarques5242
7 жыл бұрын
Just one more question, after this free call and I decide to go foward, will this be over the phone or in person relation
@joemarques5242
7 жыл бұрын
I would like to get your credit repair guy to see if we can improve on the credit score we do have over 640 as of now. And yes I have watch all your videos and then some, but I feel I should try to get to 700 or more fico score to be approved on the all-in-one Heloc as you mention in one of your videos and ofcourse at same time get a better rate. Thank You.
@joem641
7 жыл бұрын
Is there a waitting period to get an HELOC if you just refinanced.
@ReplaceYourUniversity
7 жыл бұрын
Many only have a one day waiting period.
@joem641
7 жыл бұрын
What should I do to pay off credit cards and bring Fico Score up instead of using my available cash since I want to use it to buy properties. I owe on CC's around 25K.
@joem641
7 жыл бұрын
Carol T. For ur ignorance to be clarify all that money in CC's was use to renovate my property n I was able to take a 200k loan In equity, so b4 u make stupid comments learn the facts first.
@scottstewart8737
6 жыл бұрын
Joe Marques Good lord man. Before using insults learn English better. You sound like a dipshit.
@kealuvsyuh
8 жыл бұрын
475k our mortgage @ 4.125 rate how can we pay off past?
@georgesaiki
7 жыл бұрын
Don't bother, that's an almost historically unbeatable rate.
@nirmaor4893
7 жыл бұрын
Interesting idea. A question - typically the interest rate of the HELOC is higher in few points compared to a mortgage. If this is the case, can it still help to accelerate the payments?
@gilligan777
5 жыл бұрын
Yes it can. By using the HELOC like a checking account you are lowering the daily balance, which in turn lowers the daily interest charged. So even though the interest rate is higher, it's on a lower amount so the out of pocket costs are less.
@stonecold9573
6 жыл бұрын
I'm 5 years into my 30 year loan and haven't made any extra payments yet. Can I still use these methods or are these methods meant to be started from the very beginning?
@molotov90255
6 жыл бұрын
DJRICKYDEEUK can you make weekly payments?
@learnsomethingneweveryday1539
6 жыл бұрын
Ivan Nunez this is a great question. Just wondered if biweekly is so great, wouldn't weekly be even better.
@learnsomethingneweveryday1539
6 жыл бұрын
DJRICKYDEEUK you still there? had a question for you as you seem to understand the biweekly schedule well
@ReplaceYourUniversity
4 жыл бұрын
On a 30 year mortgage, bi-weekly payments shave off about 6 years. One of the issues with a mortgage is they are closed-end loans. Meaning you can only make payments into them and not utilize 100% of your cash flow. A Heloc is a simple interest loan that is open-end, so you can put 100% of your cash flow into it until you need it to pay bills. BIG difference. Just use our calculator and compare it to making extra payments on a mortgage.
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