HELOC vs Cash Out Refinance | Which is better for you?

[@TylerWehrung]

Link to my HELOC book: amzn.to/3ZcNGxW

[@kingshark3503]

Can you do a rerun of this and throw in heloan, plus info on early payback.

[@TylerWehrung]

@@kingshark3503I’m not following what your question is. You want to know about the Home Equity loan ?

[@kingshark3503]

@@TylerWehrung ... uhhh basically a redo of this, with heloan added in, and which is less penalizing with early payback. An how verse are you with va loans. Glad I gotcha before you get big. Lol u still able to interact with the comments.

[@TylerWehrung]

@@kingshark3503 😂 my goal is to always answer the questions here, but check out this video and let me know if this is what you’re looking for: kzbin.info/www/bejne/bIOxmWhmiriNi9ksi=akVMe3BmTLjZ1FAO Also super versed in VA Loans, I’ve personally maxed mine out and helped lots of folks with them. Fire off any questions you have. I appreciate the support 🙌🏻

[@kingshark3503]

@@TylerWehrung .... nice, will do. N will have to figure on a consultation for us slow mo's. Lol. Fee that is. Lol

[@Xmj202]

Best explanation of cash out refinance and heloc ive seen on youtube the visual aids and example are great

[@TylerWehrung]

Wow, I truly appreciate you saying that! Means a lot to me that you got value out of it! Thanks again for sharing your thoughts! 🙌🏻

[@alvarovargas4067]

I have one Rental property I've owned since 2014 now worth about 520k. Only owe about 221k refinanced this year and got my rate down from 4.875 to 3.125%. I think I'm going give these Helocs a go

[@TylerWehrung]

@@justjohnnyj thanks so much!!!

[@GTContent]

I watched a lot of other videos and yours was the easiest to understand.

[@TylerWehrung]

Wow, that means a lot and really appreciate you sharing!

[@marianwheeler3547]

Thanks for the great explanation!

[@TylerWehrung]

Glad it was helpful thanks for sharing!

[@priscillaagbunag8374]

I just found you and THANK YOU FOR YOUR SERVICE AND EXPLANATION OF HELOC! I believe I chose the right strategy with the HELOC. What I didn't know was that it's an interest payment first. That helps me understand NOT to use if for buying cars and trips. I get it now! I'm a new investor and I am going to use my HELOC.

[@TylerWehrung]

Thanks so much for you support and I appreciate you sharing! Sounds like you have a great understanding now, keep me posted on your progress!

[@trustlesstreasures2200]

Thanks!

[@TylerWehrung]

Thanks for the super chat!

[@mariaramos1978]

Thabk you so much for making these educational videos they are very informative. I was thinking of getting a HELOC loan but I might just hold back. You explained it way better than the bank. Thank you. Thank you.

[@TylerWehrung]

Wow, really appreciate you saying that Maria!

[@danas5326]

Great video and explanation!

[@TylerWehrung]

Thanks so much!

[@Peacefulman76]

Good info!! I didn't even consider a HELOC before I saw your video. I'm empowered to ask more fact-finding questions to see which one would benefit me the most!!

[@TylerWehrung]

Really appreciate you sharing this with me. That’s the whole reason I do this and love hearing it has an impact on someone. Definitely call at least 3 to determine which is best for your situation! Good luck!

[@Peacefulman76]

Thanks. I WILL do that!!

[@Tryp-j9d]

VOLUNTEERING to pay HIGHER interest rates is VERY STUPID!!

[@michelleoghumu1242]

Excellent break down of these concepts! Thank you.

[@TylerWehrung]

Wow thanks Michelle! Much appreciated 🙌🏻

[@BMC_Atlanta]

Great video, easy to understand👍🏼

[@TylerWehrung]

Thanks so much for sharing, that means a lot to me!

[@dynomitedina]

Finally a clarification I can follow😂 great video

[@TylerWehrung]

Really appreciate you saying that and sharing your thoughts!

[@LMae-rj9qi]

Great video. My CORF came in handy 3 years ago but I’m glad I paid it off already !!

[@TylerWehrung]

Good stuff!

[@derpherpp]

I usually or always thumb down on any videos I watch, but this get a thumb up for clear explanations

[@TylerWehrung]

Much appreciated T-Dub! It’s an honor to be among what’s sounds to be a small group a liked videos!

[@johnj.villarreal5192]

Very informative video, thanks.

[@TylerWehrung]

Thanks John! 🙌🏻

[@paulmeek537]

Love this video, thanks!

[@TylerWehrung]

Thanks so much Paul!

[@paulmeek537]

Can you do a video where you do a cash out refinance to pay back the HELOC?

[@TylerWehrung]

@@paulmeek537 I just did one last week to walk someone through how this works. If I understand your question, I think this will help: kzbin.info/www/bejne/oXWcpKOfbs2liKs

[@paulmeek537]

@@TylerWehrung awesome I'll check it out

[@TylerWehrung]

@@paulmeek537 awesome, let me know if it doesn’t answer your question

[@craigshannon4957]

Two things that was not mentioned was that cash out refinance loans usually have higher closing costs than HELOCs. Also, cash out refinance loans increase term limits such as possibly term rates and pay off time for the new loan.

[@TylerWehrung]

Thanks Craig you’re correct. I considered mentioning that but it’s very lender dependent and can vary depending on the market, rates, etc. so I thought it would get confusing. I appreciate you watching and sharing your thoughts!

[@craigshannon4957]

@@TylerWehrung Your content is great regardless and very informative. I'm going to subscribe. From one service man to another thank you for your service.

[@TylerWehrung]

@@craigshannon4957 really appreciate you saying that, means a lot man! 🙌🏻 Thanks for your service too!

[@MNIU_]

My question is … when you do this does this change the “last sale date “ and “sale price ‘ of your house.. like for a cash out refi will it say your house last sold for 160k? Or will it still say the 100k? If the house is valued at 200k it makes me wonder if you’re in a way making the value of the house go down ? Yes it’d be up for 100k but it would be down from the 200k

[@TylerWehrung]

Great question, but it 100% does not impact the last sale price. Last sale is triggered by a deed or title transfer that is recorded with the recorders office. This just changes who has a lien against your property. I hope that helps

[@KristianElli]

I’ve got a scenario for you. There’s a house that will have an in-law suite put on this year. An approximate cost for it is 300,000; so it will be a big addition. The amount owed on the current mortgage is 430,000. The approximate appraisal of the home is about 750,000, right now. In order to keep payments on a 20 or 30 year set of payments low, what would our best options be? I hope this made sense. And thank you for any help!

[@TylerWehrung]

Thanks for sharing! This is an interesting situation. I'll provide an idea, but without knowing more details it would be hard to provide specific advice. So if the home is currently valued at 750k, you should be able to get a HELOC for 80% of that less your current mortgage or 600k - 430k = 170k. It sounds like you'll either have to find the other 130k somewhere else or maybe you have it already. The big question for me is what will the home be worth post addition? If your goal is to keep the payment as low as possible after everything's said and done, I would just do a traditional refinance to combine your current mortgage plus the HELOC (if you go that route) or other funds that you have into the addition. For the lowest payment, you're going to want a 30 year fixed rate mortgage and you should be able to get 80-90% Loan to Value if its your primary residence. I hope that's helpful, let us know what you end up doing! Thanks!

[@KristianElli]

@@TylerWehrung Thank you very much for the info! We're trying to gather as many opinions as possible with as many approaches as possible for the time being. Thanks again.

[@RetrieverTrainingAlone]

What if there is no mortgage...house is paid off free and clear. What are the advantages of the Cash out refinance vs heloc vs home equity loan? Which have the lowest interest rate, closing cost, etc.? Say a $400,000 property to finance a down-sized $350,00 retirement home in a different state that will be purchased within 5 years?

[@TylerWehrung]

Great question Missy! So the advantages don’t really change no matter if you have a little equity or 100%. Typically if you don’t need the money for something right away a HELOC is better because you only pay when you use it vs right away with a Cash Out Refi. However the refinance route will have lower interest and will be fully amortized. I hope that helps

[@jasonfriday9107]

Great info!!

[@TylerWehrung]

Thanks Jason! 🙌🏻

[@miahill6864]

Good instruction.

[@TylerWehrung]

Thanks Mia!

[@MIND9988T]

Thanks so much

[@TylerWehrung]

Absolutely, thanks for watching!

[@olayinkaadeleye529]

Fantastic video

[@TylerWehrung]

Thanks so much! Appreciate you sharing!

[@Trentonsmommy2012]

NFCU interest only heloc takes 1% of the loan or $100 monthly, whichever is more. I'm not sure if that starts right away or only when you start to use it.

[@TylerWehrung]

Hmm… that’s interesting I haven’t heard of that model before. If that’s who yours is through I would call and get some clarity about that

[@Trentonsmommy2012]

@@TylerWehrung Here is the full disclosure. Maybe it will help some of your listeners in the future 1. Retention of Information: This disclosure contains important information about our Home Equity Line of Credit Plan (the "Plan"). You should read it carefully and keep a copy for your records. 2. Availability of Terms: To obtain the terms described below, you must submit your application before February 1, 2024. If any of these terms change (other than the annual percentage rate (“APR”)) and you decide, as a result, not to enter into a Home Equity Line Truth-in-Lending Disclosure and Agreement (the "Agreement”) with us, you are entitled to a refund of any fees that you have paid to us or anyone else in connection with your application. 3. Security Interest: We will take a security interest/mortgage on your home. You could lose your home if you do not meet the obligations in your Agreement with us.

[@Trentonsmommy2012]

4. Possible Actions: Under certain conditions as discussed below, we may terminate your Plan, require you to pay the entire outstanding balance, or suspend your credit privileges. (a) We can terminate your Plan and require you to pay us the entire outstanding balance in one payment if: i. You commit fraud or make a material misrepresentation at any time in connection with the Plan. This can include, for example, a false statement or omission about your income, assets, liabilities, or any other aspect of your financial condition, or the use of funds for prohibited purposes. ii. You do not meet the repayment terms of the Plan. iii. Your action or inaction adversely affects the collateral for the Plan or our rights in the collateral. This can include, but is not limited to, failure to maintain required insurance, waste or destructive use of the dwelling, failure to pay taxes, transfer of title or sale of the dwelling, creation of a lien on the dwelling without our permission, and foreclosure by the holder of a prior lien. (b) We can refuse to make additional extensions of credit or reduce your credit limit during any period in which the following are in effect: i. The value of the dwelling securing the Plan declines significantly below its appraised value for purposes of the Plan. ii. We reasonably believe you will not be able to meet the repayment requirements under the Plan, due to a material change in your financial circumstances. iii. You are in default of a material obligation in the Agreement. All of your obligations in the Agreement and the Deed of Trust/Mortgage are deemed to be material. Specifically, your material obligations under the Plan and Agreement include, but are not limited to, your obligation to: (1) make your monthly payments as scheduled and to pay all fees and charges due; (2) avoid all events that will trigger termination and acceleration as described above; (3) obtain advances in accordance with, and as limited by, the Agreement; (4) maintain and insure your dwelling; (5) make payments and perform all obligations with regard to any other lien on your dwelling; (6) notify us and provide documents or other information as required by the Agreement; and (7) comply with any applicable laws. iv. Government action prevents us from imposing the APR provided for under the Plan or impairs the priority of our security interest such that the value of that security interest is less than 120 percent of the credit line. v. A regulatory agency has notified us that continued advances would constitute an unsafe and unsound business practice. DOC #: 620401 (01/22) LOAN#: Page 2 of 6vi. The maximum APR under this Plan is reached. (c) The Agreement permits us to make certain changes to the terms of the Plan at specified times or upon the occurrence of specified events. We may make changes to the Plan if you agree to the change in writing at the time, if the change will unequivocally benefit you throughout the remainder of the Plan, if the change is insignificant (such as changes relating to our data processing system), or if the change involves the substitution of the index and margin if the current index becomes unavailable (as described below).

[@Trentonsmommy2012]

5. Minimum Payment Requirements: You can obtain advances of credit for 20 years from the date of the Agreement (the "Draw Period"). During the Draw Period, payments will be due monthly. Your minimum monthly payment will equal the greatest of: (1) one percent (1 percent) of the New Balance shown on your monthly statement, (2) the amount of accrued finance charges, or (3) one hundred dollars ($100.00) or the remaining balance if less than $100.00. After the Draw Period ends, you will no longer be able to obtain credit advances and must repay the outstanding balance (the ”Repayment Period”). The length of the Repayment Period will depend upon the balance outstanding at the beginning of this period. The Repayment Period cannot exceed 20 years. If there is a remaining balance at the end of this period, this entire amount will need to be repaid in full. During the Repayment Period, your minimum payment will be due monthly and will equal the greatest of: (1) one and one-half percent (1.50 percent) of the New Balance shown on your monthly statement at the time the Draw Period terminates, (2) the amount of accrued finance charges, or (3) one hundred dollars ($100.00), or the remaining balance, if less than $100.00. 6. Minimum Payment Example: If you made only the minimum monthly payments and took no other credit advances, it would take 13 years and 9 months to pay off a credit advance of $10,000.00 at the APR of 8.00 percent. During that period, you would make 163 minimum monthly payments of $100.00 and one payment of $33.90. 7. Fees and Charges: We do not impose any charges to open and maintain a line of credit account. However, you must pay certain fees to third parties including, but not limited to, credit reporting agencies, government agencies, and when required, appraisers and condominium associations. For Home Equity Lines of Credit amounts up to $250,000, third-party fees typically range between $300 and $2,000 (Home Equity Lines of Credit are not available in TX). Fees depend on the location of the property, property type and the amount of the Plan. If you ask, we will give you the itemization of the fees you will have to pay to third parties. You must maintain property insurance on the residence that secures this Plan. If you wish to cancel this application, you may ask for a refund of the credit report fee. Your request for a refund must be made within three days from the date you receive this disclosure.

[@Trentonsmommy2012]

8. Minimum Draw and Balance Requirements: The minimum credit advance that you can receive is $1.00. There is no minimum outstanding balance requirement. 9. Tax Deductibility: You should consult a tax advisor regarding the deductibility of interest and charges for the Plan. 10. Variable-Rate Feature: The Plan has a variable-rate feature and the APR (corresponding to the periodic rate), the minimum payment and the term of the Plan can change as a result. 11. Index: The APR is based on the value of an index. The index is the lowest prime rate as published in the WALL STREET JOURNAL and is published in the WALL STREET JOURNAL on at least a weekly basis. If this index is no longer available, we will choose a new index and margin. The new index will have a historical movement substantially similar to the original index, and the new index and margin will result in an APR that is substantially similar to the rate in effect at the time the original index becomes unavailable. 12. Annual Percentage Rate: To determine the APR that will apply to your Plan, we may add a margin to the value of the index. The margin is determined based on an evaluation of credit history, loan terms, loan amount, loan- to-value ratio, occupancy, and/or property location. The APR does not include costs other than interest. Please ask us for the current index value, margin, discount or premium and APR. After you open a credit line, rate information will be provided on periodic statements that we send you. If your loan has an initial APR, the initial APR is not based on the index and margin used to make later adjustments. DOC #: 620401 (01/22) LOAN#: Page 3 of 613. Rate Changes: The APR can change monthly on the first day of the first billing cycle in each calendar month. However, because your first rate change may occur on the first day of the first billing cycle in the first calendar month following the opening of your Plan, your first rate change may occur in less than 1 month from the date you open your Plan. Subsequent rate changes will occur monthly. The minimum APR that can apply during the Plan is 3.990 percent (Lifetime Floor). The maximum APR that can apply during the Plan is 18 percent. Except for this 18 percent "cap", there is no limit on the amount by which the rate can change at each adjustment or during any one-year period. 14. Maximum Rate and Payment Examples: If you had an outstanding balance of $10,000.00 at the beginning of the Draw Period, the minimum monthly payment at the maximum APR of 18 percent would be $150.00. If the APR at the beginning of the Draw Period was 12 percent, the 18 percent maximum APR could be reached on the first day of the first billing cycle of the first calendar month following the opening of your Plan (i.e., the first rate change). If you had an outstanding balance of $10,000.00 at the beginning of the Repayment Period, the minimum monthly payment at the maximum APR of 18 percent would be $150.00. If the APR at the beginning of the Repayment Period was 14 percent, the 18 percent maximum APR could be reached on the first day of the first billing cycle of the first calendar month following the beginning of the Repayment Period. 15. Historical Example: The following table shows how the APR and the minimum monthly payments for a single $10,000.00 credit advance would have changed based on changes in the index over the past 15 years. The index values are from December 1st of each year. While only one payment amount per year is shown, payments would have varied during each year. The table assumes that no additional credit advances were taken, that only the minimum payment was made each month and that the rate remained constant during each year. It does not necessarily indicate how the index or your payments will change in the future.

[@navinchopra837]

What about the idea of using a HELOC for investments in stocks for maybe a few years? Make interest-only payments for those few years until the stocks have given enough return to then eventually pay down the HELOC?

[@TylerWehrung]

I personally don’t like that strategy because you don’t have any control over stocks, bad news, another coronavirus, etc. could cause the market to fall off a cliff. You have much more control in real estate so for those reasons I only pull money out on a HELOC when I have a high confidence level that I’ll be able to pay it back. I hope that helps

[@navinchopra837]

@@TylerWehrung completely understand your chain of thought but for conversation sake, couldn't the same happen with like real estate? Coz I mean wouldn't say 8 years or so be enough time to recoup any type of investment? Curious

[@TylerWehrung]

@@navinchopra837 sure there is risk in any investment but I just like the control that you have with real estate and different exits strategies. Stocks just do what they do. Not saying your strategy wouldn’t work, I just don’t like the risk/reward profile.

[@navinchopra837]

@@TylerWehrung totally understand

[@stanmoney8470]

Do you get a 2nd lean on a cash outrefy, one on your existing home, the other on a new rental property?

[@TylerWehrung]

Good question so a cash out refi would erase the existing lien and create a new first position lien on the subject property. The new rental if you used those funds to purchase one would have its own completely separate lien in first position. Does that help?

[@stanmoney8470]

@@TylerWehrung aww no really so basically turning the first lean into a new one , then splitting that into 2 separate ones?

[@TylerWehrung]

@@stanmoney8470 so think about the two properties as complete separate transactions with their own liens. The cash out refi only applies to one property and would replace the existing lien on that property. If you chose to buy a rental property, that would be separate and have its own liens attached to that property. I hope that helps, this can be tricky

[@nikilondon9306]

Hi Tyler. I just came across your channel. This was a great description and explanation of both of these options. I am having a hard time trying to decide which one would be the best option for my husband and I. We only owe $46,000 on our current mortgage with an assessed value of $385,200. We are needing to do a home remodel to move my mother-in-law in with us due to health reasons. Unfortunately, interest rates are crummy either way but we are looking at taking out $225,000 to get our remodeling done. Despite the closing costs and fees with the cash-out refinance, I feel like the fixed rates and set monthly payments would be lower than the HELOC especially as we come closer to using the $225,000 from the HELOC since we would still be paying on the original mortgage but then also the HELOC payments, even if they are interest only. I would appreciate any suggestions you could provide.

[@TylerWehrung]

Hey Niki! I appreciate the kind words and support on the channel! Yes I think your thinking through this the right way. Even with interest rates being crummy a long term fixed rate loan will be a better rate than a HELOC. You can always refinance down the road if rates drop again and refinance costs can typically be a write off. Of course talk with your CPA, but if I were in your shoes I would go the cash out refi route, I hope that helps! Good luck

[@ericlagrange2633]

Quick question: Buying an investment property is my goal. I'm torn between Heloc, cash (or possibly an equity loan). My worry is the fluctuating interest rate. How high can they get and is an equity loan a bad idea.

[@TylerWehrung]

Great question! I like to use HELOC’s to purchase them undervalue, but you have to have a plan to be able to refinance out and pay your HELOC off so the variable interest doesn’t diminish your returns. Here’s a video I made on the specifics of going this route. Hope that helps! kzbin.info/www/bejne/Y3a3hqmYeqh1i6c

[@rosspimental8384]

Any thoughts about refinance vs HELOC vs construction loan for significant renovations ($300k plus)?

[@TylerWehrung]

Great question Ross! Yes a lot of the same principles apply here. Usually construction loans still require a down payment so you could use HELOC funds for this or if it’s a personal residence and you’ll stay there for a good amount of time it may worth cash out refi to come up with the down payment. At the end you’ll likely either sell or or cash out refi to keep the loan. I hope that helps

[@marianabarajas410]

Hello, which of the two would it be more beneficial to use to invest in a rental property?

[@TylerWehrung]

Great question Mariana! I think it depends on which type of investing you're doing. If you follow the BRRRR model where access to cash for shorter periods of time is beneficial, then a HELOC is better suited. If you have significant equity in your home and you wanted to convert some of that into a downpayment for a rental property, it may make more sense to go the Cash-out Refi route because you'll be able to pay it back over a longer period with a lower, fixed interest rate. I use the rule of thumb of 12 months. If I need access to the money for less than 12 months, I tend to like HELOC's, but anything greater than that, I think a Cash-out Refi is more secure. I hope that is helpful!

[@heidicatlin7970]

Good to know!

[@lindascroggins1373]

I've been trying to get a HELOC last 2 weeks. No one is doing them. How can I find a company who will.

[@TylerWehrung]

Interesting, is it on a primary residence? Have you seen this video where I walk through the banks I use? kzbin.info/www/bejne/pquuoHyulrqMiLc If that doesn't help, I would try to ask some local banks in your area and if they don't if they know anyone who does. You could also search Biggerpockets.com or nerdwallet.com hope that helps!

[@jawfitness]

Thanks for the video. If you do a Heloc or cash refi to buy a second home, will you run the risk of not being approved for the second mtg due to the debt to income ratio increasing?

[@TylerWehrung]

Really good question John, my short answer is yes the new debt will impact your debt to income however if you buy a rental, the rental income usually offsets the debt associated with it. All banks do this differently so I would chat with your lender before you make a move, hope that helps!

[@jawfitness]

@@TylerWehrung thank you!

[@TylerWehrung]

Anytime!

[@infinityGtd]

I like the cash out cash is king

[@TylerWehrung]

🤑

[@infinityGtd]

Hi bro if my house value at $690,000 and I owe $230,000 how much equity I take cash out?

[@TylerWehrung]

@@infinityGtd Great question, so most banks let you pull out 80% of appraised value in total. This included your current mortgage, so if you're house would appraise for 690k, 80% of that is 552k then subtract your current mortgage of 230k and you have 322k that you could potentially access. If you're lender says 70-75% LTV then just replace that number in the equation, but I hope that helps!

[@infinityGtd]

@@TylerWehrung wow amazing ok bro thank you

[@TylerWehrung]

@@infinityGtd anytime!

[@danielrodriguez-qv2je]

Problem with refinance assesors increase property taxes

[@TylerWehrung]

Daniel, that’s definitely a possibility, but not always the case. Typically a banks appraisal is kept in house and is separate from the cities assessed value which is used for property taxes. Either way in my opinion, it’s usually worth it to tap into 10s of thousands in equity for the potentially small increase in property taxes. Just my two cents, I appreciate you watching and sharing your thoughts!

[@GerardoHernandez-wy2pb]

Hello my question is I have a really good mortgage rate but I have equity in my home if I do a refi cash out I have the risk of raising my interest rate so the line of credit would be better right

[@TylerWehrung]

Great question! Yes a HELOC would keep your current rate in place, but it would hurt to see what rates are out there. Unless you bought your rate down, there’s a good chance you could still get a better one as we’re still near historic lows. Hope that is helpful!

[@noy6184]

How many year do bank let people pay back their Heloc loan?

[@TylerWehrung]

Great question! So it’s typically not a certain number of years like other types of loans because it’s interest only. Normally on a 30 year loan the balance is paid off after the 30th year, but the principal never goes down on a HELOC if you just make the monthly payments. That’s why this should be considered only for short-term endeavors. But most of mine are open for 10 years which means I’ll likely just have to re-apply for them again at that time. Hope that helps!

[@noy6184]

@@TylerWehrung Ok thank you. i think HELOC is still better they approve Line of credit and you can use that amount of money for your investment and pay back only what you use but the downside is the interest is variable

[@TylerWehrung]

@@noy6184 100% agree! As long as your buying hood deals and have a way to refinance out of the HELOC, it’s usually the best bet.

[@noy6184]

@@TylerWehrung thank you. sorry this is new to me, i tried to use online calculator: if i borrow 40K from my HELOC let say interest is 2.875 % (Bank will offer me that) for 10 yrs loan, then it said i will pay $683.94 month for 10 yrs? is that right assume i use all 40K to my new investment?.

[@marcinl2996]

That brown circle on the wall behind you makes you look like you have some weird head shape bobbing back and forth, I suggest you change it for your next videos. Thx

[@TylerWehrung]

Thanks Marcin! I never even noticed, and out of almost 19k views and 95 comments, you're the first to bring this to my attention. Much appreciated my friend, I'll make sure this is removed in the next video for sure!

[@johnduck2190]

Question I have little over 100,000 in equity in my house iam in a FHA at 2.8% world like to get in a conventional loan and take about 15,000 for backyard landscaping is it worth it or refi without taking money out?

[@TylerWehrung]

Great question John! It’s hard for me to say if it’s worth it, but here are a few considerations. Do you currently have MIP that you’ll get rid of with a conventional refi? My guess is yes so factor that in. At such a low rate, you’ll likely jump quiet a bit since rates are rising. You’ll also likely have closing costs as well so for that small of an amount your wanting to pull out, it’s probably going to cost you a good chunk, but at the end of the day you have to ask yourself if your new monthly payment and the costs associated are worth the 15k. I usually recommend this tool for getting into another investment that will offset some of the cost, but only you will know how much enjoyment/utility that new landscaping will give you so you’ll have to factor all that in. I hope that helps.

[@johnduck2190]

@@TylerWehrung my God thank you for your for a honest answer without being told to call you or click a link only to find out you have to pay for some real-estate course

[@TylerWehrung]

@@johnduck2190 😂 thanks for saying that, I know what you mean! If you ever have a question, I’m happy to help at least give you a perspective to think about without an agenda. Cheers!

[@elmerorellana64]

Have an play off one condominium. It's possible make an HELOC????

[@TylerWehrung]

I’m not sure I understand the question, could you elaborate on the specifics please

[@elmerorellana64]

Sorry.... I ready pay off my condominium. So is possible I can apply for an HELOC??? Thank you for you responded.

[@TylerWehrung]

@@elmerorellana64 yes you can certainly ally for a HELOC on a paid off property, you should be able to get 80% of appraised value!

[@elmerorellana64]

@@TylerWehrung thank you

[@TylerWehrung]

@@elmerorellana64 anytime!

[@RockyTopSplash]

I'm thinking that both these options sound like horrible ideas. I mean you've worked hard to pay your mortgage down to $100k.. why take a "loan" against it and only get $60k you can use? Now you owe $200k on a house that has a value that changes daily with the market. You may wake up tomorrow and your $200k house wont sell for $120k. Now your upside down and your 60k you had is pissed away on something you could have probably paid cash for by now or you didnt need in the first place. Just sounds like a good way to get in a bad position honestly. Am I right?

[@TylerWehrung]

@Rocky Top Splash, hey really appreciate you sharing an opposing view and open to discussing. I completely understand where your coming from and 100% agree that this isn’t for everyone. There is a niche in the real estate investment community that needs short-term access to cash to purchase value add properties that they can then refinance out of to pay these loans back. There’s certainly risk involved, but when done correctly can generate generational wealth. I try to really advocate that people know what they’re getting into, but most of my audience are real estate investors that more often than not need access to capital. I hope that helps shed some light on the other side of the coin, but if not, please let me know. Again thanks for sharing!

[@RockyTopSplash]

@@TylerWehrung thanks for the reply. Makes sense, like you said just not for me.

[@jayc4715]

Agreed

[@TylerWehrung]

@@jayc4715 thanks for sharing!

[@ddondoua]

Wouldn’t your payment go down if you cash out refi for 160k if your original loan is 200k .... just my two cents

[@TylerWehrung]

You are correct in that scenario. The example I described was the was worth 200 and you only owed 100. We didn’t discuss original loan amount or interest rate differences that would be important factors in the decision to use this tool or not. Thanks for sharing your thoughts!

[@True77]

The payments would go up. In the example you are paying on a mortgage of 100k and switching to a mortgage of 160K (based on the value of a 200K home).

[@TylerWehrung]

@@True77 that could be correct, but to really know we would have to know the original loan amount and interest rate. It could have originally been 160 and just paid down to 100 over the years. Or if the original interest rate was significantly higher, the refinance could actually be lower. Lots of factors would determine if this is the right tool to help achieve your specific goals. Thanks for sharing!

[@jayc4715]

Neither

[@TylerWehrung]

👍🏻

[@danielmaldonado6388]

Omfg not gonna lie but I thought you were bgerseng from league of legend making a real state video iwas like wtf really?

[@TylerWehrung]

😂 I'm dead... I didn't know who that was, but just googled it. I definitely see the resemblance. I'm blaming it on the glasses

[@Tryp-j9d]

The cash out refi gets you a HIGHER INTEREST RATE. VERY STUPID!!!

[@TylerWehrung]

Higher interest compared to what? Definitely not higher than the HELOC. There are many scenarios where each can be beneficial

[@achag9273]

Great video

[@TylerWehrung]

🙌🏻 much appreciated!