Low Fixed Rate Mortgage vs High Variable HELOC

#heloc #mortgage #mortgagepayment
Calculator: acceleratedbanking.com
Welcome to our latest KZbin video, where we bring you an in-depth comparison between two popular mortgage strategies: "Low Fixed Rate Mortgage vs. High Variable HELOC." In this informative presentation, we break down the advantages and drawbacks of each approach, helping you make an informed decision about your mortgage financing.
Throughout the video, we'll explore the stability of a low fixed-rate mortgage and the flexibility of a high variable HELOC. We'll delve into key factors such as interest rates, repayment options, and financial goals, allowing you to weigh the pros and cons to determine which strategy aligns best with your unique circumstances. Join us for this enlightening discussion that will equip you with the knowledge to make a strategic choice for your mortgage journey.
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*DISCLAIMER* The suggestions, advice, and/or opinions that are given by Sam Kwak and Daniel Kwak (The Kwak Brothers) are simply opinions. There are no guarantees of set outcomes. Listeners, guests, and attendees are advised to always consult with attorneys, accountants, and other licensed professionals when doing a real estate investment transaction. Listeners, guests, and attendees are to hold The Kwak Brothers and its brand harmless from any liabilities and claims. Not all deals will guarantee any profit or benefits. Listeners, guests, and attendees are to view and listen to all materials and contents furnished by the Kwak Brothers as a perspective based on experience.

[@Vinny-no9bd]

I'm sticking with you Sam and Daniel. Thank you for all your valuable information on all topics!!!

[@TheKwakBrothers]

I appreciate that!

[@chrisdorsano5531]

Thank you for sharing 🙏

[@RCCM27]

This video is an Amazing eye opener! I also saw your video about getting out of talking about the Bible as it relates to the end times. I enjoy both paths, bible/end times, and financial aspects. Please keep up both. Thanks

[@TheKwakBrothers]

Thanks for sharing!!

[@DrFinancialLiteracy]

Awesome video!

[@TheKwakBrothers]

Thank you for watching!

[@robbiehernandez6200]

I love this! 👍😎

[@smwjr87]

Win!

[@dontlabelme34]

It’s a win … If you have $20k under your mattress just pay off 20k from your mortgage. I don’t so HELOC will be beneficial for me:) Thanks Sam That’s very smart.

[@minhhle5940]

Thank you for all your valuable videos Sam. I've been trying to apply your method in Canada. Just wondering your calculator excel free does not include the Daily tab that you explain on the video. I think that is really helpful for following the process

[@TheKwakBrothers]

Hi there! Thanks for your kind words and support. If you're having trouble with the calculator, you might try using our online version, which has been recently fixed: acceleratedbanking.com/home Otherwise, remember to use either Microsoft Excel or a free Microsoft OneDrive account to access all the features on the offline version. Hope this helps!

[@RE_Fitness]

Here is my question, would it make sense if lets say you owed $290k on a mortgage and made 1 lump sum payment from an approved HELOC on the property and converted it into a 1st lien; is that a better position regardless of interest rate if you were making weekly deposits of 100% of paychecks? (considering you don't have an amortized mortgage anymore) or will the payment owed be too high compared to the previous fixed rate mortgage?

[@TheKwakBrothers]

Your question touches on an important consideration in the realm of financial strategies involving mortgages and the use of banking products. When you utilize a line of credit to pay off a traditional mortgage and then apply 100% of your paychecks against the balance weekly, the focus shifts from the interest rate to the effective management of cash flow and principal reduction. The key is in the way the strategy harnesses the flexibility of the line of credit to reduce the average daily balance, which can influence the amount of interest that accrues. This approach can be effective, but the specifics of your financial situation, including your cash flow dynamics and ability to manage the new payments, are crucial factors. Making a lump-sum payment and converting to a first lien position with your line of credit could put you in a better position if the strategy is executed correctly. It could potentially reduce the amount paid in interest over time compared to a traditional mortgage, depending on how you manage the payments and remaining balance. It's a complex strategy, and understanding the nuances is essential. I would highly recommend watching our webinar for a clearer picture of how this might apply to your situation: acceleratedbanking.com/webinar-registration-515174331635781964831?sl=assistant_Response. he webinar will provide a more in-depth explanation and help determine if this approach is right for you.

[@thomasxxxxxx2345]

NO unless of course you crave for more interest, fees and risks Next question

[@BrianKlingel-wm7hg]

Paying back heloc? only interest till end of draw period or payoff with principal? Which one are you referring to?

[@TheKwakBrothers]

With a HELOC, during the draw period, you typically only pay interest. After the draw period ends, you start paying back both principal and interest. The flexibility of a HELOC allows you to manage your payments in a way that can help reduce your mortgage more efficiently. For a deeper dive, check out our explainer video: kzbin.info/www/bejne/fnrZnmRtndSlZ9U.

[@melli4945]

Can u do this to invest I have morgage payment my home is owner to owner n thankfully have 7 year morgage n down to 5 years not sure if this would benefit me but I would be interested to make investment

[@TheKwakBrothers]

YES! it is very much possible to leverage a HELOC to invest in real estate

[@valigirl6510]

I don't see the link to the spreadsheet.

[@TheKwakBrothers]

Sorry about that! Please check the description for me one more time!

[@allyssaroe7193]

I don’t see the link to the spreadsheet

[@TheKwakBrothers]

Sorry about that! Please check the description for me one more time!

[@allyssaroe7193]

@@TheKwakBrothers a link is there that takes me to a page that requires me to sign up before I can see anything

[@vikramansubramanian1853]

Do we have other excel sheet link that shows daily balance, income 5000$ , etc... Looks like 5000$ everymomth from paycheck taking care of finishing heloc balance. Not heloc strategy😂

[@MathMajor2pi]

I've never seen a VB shyster...uuummm...proponent compare the HELOC vs paying directly. Because then you'll see there's no benefit.

[@thomasxxxxxx2345]

@@MathMajor2pi Naahh... You'd see the VB way is more expensive and more risky. But think of all the fun and the thrill of paying more and taking on more risk

[@MathMajor2pi]

Anyone who claims you can leverage high interest rate debt to pay down low interest rate debt is a charlatan. There is no magic free money. The "client" would be better off simply putting the extra cash directly on the mortgage.

[@TheKwakBrothers]

I understand skepticism given how counterintuitive it might feel to use a higher interest rate product to pay off a lower interest rate debt like a mortgage. However, what we often highlight is that it's not merely about the interest rate, but about cash flow management and the flexibility some banking products offer that can be strategically used. Our strategy doesn't revolve around magic or free money. Instead, it's about the efficient usage of the money you already have flowing through your financial system and taking advantage of certain banking products that allow for different pay-off methodologies. It's a shift in the approach towards managing debt and leveraging available cash flow. For instance, it's somewhat akin to the difference between the steady pace of a marathon runner vs. the strategic bursts of speed from a sprinter. Each has their benefits and optimal scenarios, but for someone looking to finish the race more quickly and is trained appropriately, sprinting might be the preferred method. Every person’s financial situation is unique, and what may be optimal for one might not be suitable for another. If you're open to exploring how these methods might apply to your situation, consider attending our webinar, which goes into greater detail about these strategies: acceleratedbanking.com/webinar-registration-515174331635781964831sl= We always recommend that individuals thoroughly research and consult with their financial advisor before making any substantial financial decisions.

[@MathMajor2pi]

@@TheKwakBrothers Chunking does nothing, either. It's not "counterintuitive;" the math simply does not work. In this case, $20K off the mortgage saves $50 buck a month. But it costs $150 on the HELOC. He doesn't break even if he can park his entire $10K salary for the entire month, which of course he can't. Your client would save more by paying down the mortgage directly. I assume you are not stupid and know that, which means you're shysters.

[@jhayr1987]

​@@MathMajor2piI think a better idea to his explanation is to use the money on your savings to work for you. For example I have a $20k on my savings now and apply for heloc for $20k, once you receive that $20k from heloc give it to your lender and apply it to your principal. And then park your $20k on your heloc account so you don't have to pay interest because you already have your $20k park in there. Then do the same for the following year, it will work much better if you pay extra principal on top of your monthly mortgage, only of course if you have the cash flow. I don't recommend it if you don't have much savings or living paycheck to paycheck. Correct me if I understood it wrong. Thank you

[@derekrice5203]

You’re missing the point, there is a huge difference between simple interest and amortized interest. The rate doesn’t matter because you are actually paying less interest on the 7% then you are on the 3%.

[@hassanpaywandi221]

@@derekrice5203what is the difference in those rate?

[@jeanpierreisyou2]

Is there a company you guys prefer for HELOC's? Trusted?

[@TheKwakBrothers]

While we at Accelerated Banking don't endorse any specific financial institution for banking products such as lines of credit, we do guide our clients through the process of choosing the right banking option that fits their individual needs and the strategy we teach. Trust is a key component, and we understand the importance of working with reputable institutions. If you'd like to learn more about how to navigate these options and understand which financial products best suit your unique situation, we recommend registering for our webinar where these topics are discussed in greater detail: acceleratedbanking.com/webinar-registration-515174331635781964831?sl=assistant_Response Additionally, you can explore our general explainer video for a better understanding of the Accelerated Banking Strategy: kzbin.info/www/bejne/jpqaZoKGmrOqnKs

[@user-cm5oh4zn2b]

Take that $5K every month and put it against principal. Why even to get involved with HELOC. Jesus

[@TheKwakBrothers]

I understand the appeal of making additional payments directly towards your mortgage principal; it’s a straightforward approach for many. However, the strategy we teach at Accelerated Banking leverages different financial products to potentially help homeowners pay off their mortgage and debt faster than they would by simply applying extra payments to the mortgage. While making larger payments directly to your principal can indeed reduce the interest paid over time, our methods are designed to maximize your cash flow and decrease the interest differently. For example, our approach might allow you to use your income to temporarily lower your loan balance each month before your expenses, thus reducing the interest accumulated due to the lower average daily balance. Remember, every financial situation is unique, and it's crucial to find the strategy that aligns best with your financial goals.

[@boyibolomi2086]

Rental cash damming seems more advantageous than this strategy. But this requires a rental property.

[@TheKwakBrothers]

Rental cash damming can be a great strategy for those with rental properties. However, our approach works for homeowners without needing additional properties. It's all about optimizing your cash flow to pay off debts faster. For more insights, check out this video: kzbin.info/www/bejne/fnrZnmRtndSlZ9U.

[@hoeves3001]

Why wouldn't this client just apply the $4000 per month (the difference between the income and expenses) directly into the mortgage balance? That would reduce the mortgage much faster and cheaper than they way you have proposed here.

[@TheKwakBrothers]

That's an insightful observation! While it may seem straightforward to apply the extra income directly to the mortgage balance, our strategy encompasses a more holistic approach to managing both debt and cash flow effectively. Directly applying the $4000 to the mortgage doesn't optimize the potential financial leverage that could be accessed with the right financial products. Without going into too much detail, our approach evaluates how to use various banking options in conjunction with your cash flow to not only pay down debt but also to reduce the total interest paid and maximize financial flexibility. This could potentially yield greater financial efficiency and savings over the long term compared to only making extra principal payments. If this approach piques your interest, I would recommend attending our webinar for a deeper understanding. The strategies we discuss there might illuminate why such a direct application of funds isn't always the best route for every homeowner.

[@thomasxxxxxx2345]

Because there is no fun in that. That would simply be the most cost effective way, who wants that ? He'd much rather pay more interest and fees, take on more risks and attend a couple of paying seminars that will make him feel good about the clever way he is managing his money .... Come on, be a man, take more risks, and pay more money for no benefit at all. That is the way to go