Should I Refinance My Home NOW? (+ How to Pay 0% Interest on a HELOC)

Рет қаралды 13,288

BiggerPockets

Күн бұрын

Пікірлер: 54

@sergii_real_estate Күн бұрын

This lady is sharp as a tack! This is such an investors state of mind convo!

@michaelgonzalez8863 29 күн бұрын

I never worry or care about interest rates that much. The last few buys the interest is figured into the deal . If the numbers don’t work then don’t buy . I had an adjustable rate when rates were low and when rate started doubling, it didn’t bother me because I just raised the price of the rental. The important thing to me is the actual price I pay

@frankvator 28 күн бұрын

In order to truly catch this concept of velocity or volume of interest paid. First understand there’s a difference btw an amortized mortgage scale and TIP total interest paid on a mortgage. Once you realize a 2.99% is actually 51.08% scales will fall from your eyes. Since it’s fixed and front loaded you can only lower it by paying principal payments but have no access to those funds. Unless you refinance which starts the front loaded amortized clock😡 Why simple interest dominates is by having the ability to alter your principal pay down by deposits you normally perform which lowers your balance daily while offering liquidity to payout expenses at the end of the month. In short simple interest is simple not complicated you pay on what you owe daily. The purpose of using credit cards is to calculate or push back using the HELOC until the end of the month so your daily outstanding balance remains low so your interest stays low for bulk of the month. Hence daily average is in your favor. So to wrap this all up what is higher 7-9% HElOC or a 2.99% 30 fixed? If you said 2.99% is higher you go to the front of the class. 🎉 because this is actually 51.08% based on volume of interest you pay on the early years of your loan. It’s a vicious cycle… these disclosures are now in everyone’s mortgage documentation by law.

@PabloMCanseco Ай бұрын

I'd love a visual infographic on the 0% interest heloc hack

@justlikeasoldier 29 күн бұрын

In the 50's my late dad worked a modest job, mom was a housewife, and they lived a nice lifestyle including owning a home. Nowadays both I and my partner works and can barely afford to make ends meet. Luckily, I've just received an inheritance of $500,000 and concerned how to use money I didn’t work for. Should I pay mortgage since I’m still working, or do I invest in stocks rather than just staying 100% cash?

@beautifulpeopleonearth 29 күн бұрын

You should do a mix of both. Seek the help of a financial advisor and a real estate broker. Use $100k to get yourself a decent rental property, may need a mortgage but keep the cost of the property low, and put the rest into stocks.

@justamanwithbeliefs 29 күн бұрын

Well agreed, investing with the help of an advisor did the trick for me in less than 5 years, retired with couple millions before 55. I worked hard everyday as a teacher for 32 years, and my salary was over 100k annually, enough to get me fully invested.

@garrickphillips-x1z 29 күн бұрын

@@justamanwithbeliefs bravo! retired in my 40s after inheriting money from a childless relative, traveled overseas and found a girl almost my age, happily married but only issue is how to grow and preserve our wealth... think your advisor can be of help?

@justamanwithbeliefs 29 күн бұрын

Can't reveal much here, I take guidance from a Pennsylvania-based advisor 'Katherine Nance Dietz' and most likely, the internet is where to find her basic info, simply do

@garrickphillips-x1z 29 күн бұрын

thanks for the lead. I just searched Katherine by her full name and easily spotted her profile, no sweat. I have sent her an email, hoping she gets back to me soon

@devon902 Ай бұрын

Wow, this lady is dropping some serious gems for me!

@richardbryant5939 28 күн бұрын

Hey Dave, I’m looking for a HELOC product like you and Caeli discussed. They’re hard to locate a HELOC lender with an attached checking account. Is there a way I can connect with yourself or Caeli to secure such a product from your team?

@charles66454 29 күн бұрын

What’s the name of the heloc that if you have the money in a account you don’t have pay any interest rate?

@gabester901 29 күн бұрын

This is velocity banking

@fx1209 28 күн бұрын

Hello, Thanks for the an other great show. Is HELOC only available properties on individual names or HELOC also available for property owned by LLC? Thanks

@flyhighmack5530 Ай бұрын

This was soo good!!! I’m gonna have to seriously look at a Heloc moving forward

@Aculus1 25 күн бұрын

Why manage the complexity and borrow from the higher interest HELOC to pay down the mortgage if the net result is paying down 1K on the mortgage? If you have an extra 1K to spend why not just pay extra principal on the mortgage? Is there a way to only have the 1K a few days to keep the average daily balance very low, if so that would be ideal, but I don't see it.

@RyanIrwinIAC Ай бұрын

Great episode and love the idea of how to exploit a HELOC with the caveat of great power requires great responsibility. 💪

@OhichiWatanabe Ай бұрын

So which account should I be paying the HELOC out of?

@YatesHarrison 28 күн бұрын

How would the HELOC hack work regarding liability issues and using LLCs to own rentals? Doesn't that strategy pierce the corporate veil?

@davidaizuss8481 29 күн бұрын

Ok, but if I use the all in one as a bank account, now I can’t put that paycheck money in a HYSA, so yes interest saved on the heloc, but lost interest in opportunity cost. Kind of a wash and not worth the complexity.

@WW-re9cc 29 күн бұрын

But us people in California, we pay a very high tax for interest, which usually makes the interest earning minimal

@adriank2959 Ай бұрын

Why not cashout

@anthonyj.rucker6069 Ай бұрын

So velocity banking basically

@ausquiano29 29 күн бұрын

Refi a 2.5%? We are thinking of buying a second home, maybe selling our current home with the 2.5 or lease it? What makes sense

@MiguelGarcia-vz1gi 29 күн бұрын

I would say that it depends on how big your balance is. But I would hold to that 2.5% unless you have an extremely better return on your next investment. That 2.5% debt should be treated as another asset, at least at this moment.

@kylefordinvest 29 күн бұрын

Great discussion on refinancing strategies!

@revivecleaning399 27 күн бұрын

Velocity banking hits mainstream

@JonathanExcels Ай бұрын

I have been using this HELOC strategy for years and it works. However, one of the BP lenders recently told me about a strategy that I think might be better.

@Andy-gi1dm Ай бұрын

Tell me more! 😊

@JonathanExcels 29 күн бұрын

@Andy-gi1dm it's a hybrid approach. Let's say you owe 100k. You take out a 30 year fixed mortgage for 99k (to get the lowest interest rate on the bulk of the debt). Then a heloc for an amount that will be enough to cover the remaining 1k, plus your emergency fund if you should ever need it. Step 1: As money comes in, it first pays the heloc to zero, then whatever is left goes onto the mortgage as a principal payment. Step 2: Then bills come due and you pay with the heloc. Then money comes in and you repeat step 1.

@Andy-gi1dm 28 күн бұрын

@@JonathanExcels thanks!

@GetItWithBecca 29 күн бұрын

How does this help if you're continuously depositing your paycheck into the line of credit? How is this any better than utilizing a credit card every month and paying off balance before closing statement date?

@GetItWithBecca 29 күн бұрын

Plus, there's a lot of upfront fees to opening up a HELOC/line of credit. Maybe I need more clarification.

@Mike_Affholder 29 күн бұрын

@@GetItWithBecca it works if you have extra money left over every month. In their example they made 10k and spent 9k so everymonth the heloc is going down by the extra money at 1k per month minus interest. Basically you can pay off a 100k loan this way within 10 years vs 30 years.

@manz5552 Ай бұрын

Can you have more than one heloc?

@bradmarchant7822 Ай бұрын

They look at your existing debt vs equity. Most HELOC’s want to see %10-%25 equity still in the property. But technically you could have more than one if you’re not over leveraged.

@Mike_Affholder 29 күн бұрын

What bank does she work for?

@jeffmitchell257 29 күн бұрын

By all metrics we are in a very strong economy? Meanwhile, we have more people working multiple jobs than ever before and a record level of credit card debt that has risen over 30% in the last three years. Doesn’t sound very strong to me.