Why Your Mortgage Is A SCAM (Secret To Mortgage Payoff)

Why Your #Mortgage Is A SCAM (Secret To Mortgage Payoff)! Mortgage loans are one of the biggest SCAMS of all time when it comes to home ownership. In this video I break down exactly what techniques banks use to get you to refinance your mortgage loan to another 30 year mortgage forever. Mortgage literally means death pledge and banks continue to find ways for you to start a new mortgage loan every 7-10 years. Furthermore I break down how a mortgage loan works with an amortization schedule and what your monthly payments actually go to. But never fear, we have devised a strategy to payoff your mortgage early within 5-7 years and it's a tried and true stratgey to financial freedom!
Download Our FREE Strategy Calculator: chopmymortgage.com
0:00 Intro
1:29 Why mortgage loans are scams
5:20 The 7-10 year mark in your mortgage loan
8:44 Why a mortgage loan may not fit into today's society
11:05 A solution to the mortgage loan scam
11:40 A tool to pay off your mortgage fast
12:24 The difference between a mortgage & a HELOC
14:52 Average daily interest breakdown
18:36 1st lien HELOC breakdown
23:41 The secret to using a HELOC vs mortgage loan
Disclaimer: I am not an attorney, accountant, or financial planner. This video is intended to be an educational video. This video should not be taken as financial, legal, and/or tax advice. Sam Kwak is a Certified Credit Counselor 11613. This is not a credit counseling session. I suggest that all viewers consult with professionals prior to implementing any or all parts of our strategy.
RECAP OF THE VIDEO:
I start this video with an explanation as to why a 30-year mortgage is like a trap for 21st-century homeowners. The reason being is that Americans (and Canadians) experience frequent life changes that cause them to move or they are eluded to refinancing because the refinance rates might be low. Unfortunately, such an event happens before 7-10 years into the mortgage. In the first 5-7 years, the vast majority of your mortgage payment goes straight to interest payment. A very small portion of your monthly payment actually goes to pay down the principal balance of the mortgage. Fortunately, there is a way to escape this. We're going to introduce a new tool to help us with this called a Home Equity Line of Credit (HELOC)
A HELOC is different than a traditional mortgage in several ways. The two main things to remember are (1) a HELOC is a revolving line of credit - which means you have the ability to pay back and re-use any available limit of the HELOC; and (2) a HELOC uses average daily interest calculation (simple interest) instead of an amortization interest calculation which is used by your 30-year mortgage. There's a common myth out there saying that HELOC interest rates are always variable and higher. This isn't true... There are HELOCs out there with fixed interests rate and some even have lower interest rates.
Now, in 2021 - the best version of this strategy (in my opinion) is to use a 1st lien HELOC to completely replace your mortgage. By doing this, we now only have one debt against your home. No more 30 year amortized mortgage! Just a 1st lien HELOC. With the 1st lien HELOC, you're now able to deposit all of your income (and event savings) into the HELOC balance to reduce the average daily balance - which ultimately means a lower interest amount you'll pay on a daily basis.
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--DISCLAIMER-- The suggestions, advice, and/or opinions that are given by Sam 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 Sam Kwak, Novo Elite, Inc. and the Kwak Brothers 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 upon experience.

[@TheKwakBrothers]

⭐️⭐️⭐️COMMONLY ASKED QUESTIONS / ARGUMENTS ANSWERED HERE⭐️⭐️⭐️ 👉 1. Why is this Better than Paying Extra into the Mortgage? We call these people, "Extra Payment Pagans"... We have a special video that explains why our strategy is BETTER than extra payments: kzbin.info/www/bejne/eJ3UiIJnZbWGa8U 👉 2. Where Can I get More information On This? You can watch our followup webinar here that answers more questions and you can schedule a free consultation with us afterwards: acceleratedbanking.com/webinar?sl=chopmymortgage We'll answer more quesitons such as "I don't have enough equity", "I have inconsistent income", etc. 👉 3. Where Can I Get the Calculator? Right here: chopmymortgage.com 👉 4. How is it possible to Pay Off the entire Mortgage with a HELOC? With a 2nd lien HELOC, it's hard to pay off the existing mortgage balance in full unless you have more than 50% equity. However, with a 1st lien HELOC.. you can completely replace the mortgage in full. It's technically a refinance to do so but you're going from a 30 year mortgage to a 1st lien HELOC instead of refinancing into another 30 year mortgage which resets your amortization clock. 👉 5. I still Don't Get This... How do I learn more? You can watch our FULL 60 Minute Explanation Seminar here: acceleratedbanking.com/free-virtual-class?sl=chopmymortgage 👉 6. Doesn't this require a TON OF DISCIPLINE? Actually, no! My team has created a complete system to either automate the entire process OR minimize the effort down to 30 minutes a month at most. There is an initial set up process but after that, there is little to no on-going maintenance. We do have software programs that can track results and progress for you. 👉7. What if the Bank SHUTS DOWN MY HELOC or FREEZE it? So this happened quite a bit back in 2008-2012 market crash. It's first important to understand WHY banks close/freeze them. Back in 2008-2012, banks closed them on homeowners who were either underwater OR had TOO much debt with no asset. The other common reason why is that the homeowner either abandons the home, does something illegal with the property, or defrauds the bank with false information. Ever since 2012 Dodd-Frank Act, there are MORE protections for the consumers/borrowers of HELOCs. Plus, out of the 1000s of clients we have for the past 5 years, we had yet to have a client lose their HELOC due to shut downs or freezing. So it's VERY rare! 👉8. Why SHOULD You pay off your mortgage in the first place with really low rates? Please watch 2:00 to 8:00 again because you definitely missed it...

[@rogmz3512]

At 23:00 u make a mistake I think. Should be on the balance, not the limit. Right? So $194k

[@MrEdrftgyuji]

As we have seen, governments and banks change the rules whenever it suits them to, and judges always side with the government. So you have no security whatsoever.

[@simon6071]

The Kwak Brothers are the smartest financial advisors I have ever seen. Better still, they are patriots who are not afraid to expose the agendas of the tyrannical globalists.

[@simon6071]

This is the BEST VIDEO EVER on how the MORTGAGE SCAM works and how to beat the scam. I was lucky enough to escape from the scam by paying extra payments for principal-only to have my property become free and clear much sooner after I found out that most of the monthly mortgage payment I made went to interest payment and only a very small portion was for reducing the principal and the monthly interest payment. The banks try to keep people as their cows for milking money for as long as they can. That's why they don't want the borrowers to reduce their principals owned to the bank even when the borrowers are able to do so. Make sure that making principal-only payments are allowed by your lender without penalty or expensive fees when you sign up for a mortgage.

[@CustomCommander1980]

I owe 165k on my mortgage but the property is valued at 800k. Still have a 27 year loan left at 2.9%. Would doing a 225k HELOC and paying the mortgage off be wise? Then just pay towards the HELOC? Think the HELOC would be at around 7%

[@antomano5623]

I paid off my house in 9 years, 8 months, 1 week and 6 days living in L.A., CA. I went from 30 years to refinancing to 25 yrs, to 23 yrs, to 20 yrs, to 18 yrs, and finally to 15 years. Now $650 is what I pay for my property taxes, homeowners insurance and earthquake insurance monthly. For $650, you cannot get a converted garage to live in much less a studio apartment. I paid my mortgage every 2 weeks instead on waiting on the statement to arrive and I paid additional principal every time with it.

[@hermanrogers1325]

Very good smart and intelligent we can enjoy life

[@twincherry4958]

Is there a 23yrs refinance option? Didn't you pay closing costs everytime you refinanced?

[@antomano5623]

@@twincherry4958 Three did have closing costs built in. It came to .00125% to .00175 , which was not bad. No early pay off penalties. One can refinance from 29 years down to 7 years so long as it meets their dollar mortgage limits.

[@maryrenaud6732]

Excellent work. It is great to be mortgage free particularly if you are or close to retiring where income may be lower.

[@stcharleshometheater]

You have to be careful paying every 2 weeks because not all mortgage companies will except that, be sure to check with your mortgage company first.

[@MTXSHO9732vV8SHO]

The mortgage on my 3br house with 2 car garage, HOA, water and trash collection costs are less than I'd be paying for the one bedroom, 90 year old, roach interested bungalow I moved out of. Oh... My house had nearly doubled in value in the 7 years since I moved in. Message: You have to buy your house when the numbers work for YOU

[@trainsandlocomotives]

Right

[@jholid6y]

Mortgage is a scam. Renting is a$$ rape.

[@briano9397]

@@jholid6y live in the woods

[@TheTmshuman]

My house has now more than doubled and is cheaper than the new studios and one bedrooms at the end of my block. I did refinance to get the 2.25% interest rate but I’m not touching it again. I’ll just try to pay it off sooner.

[@jusrarsh4109]

Not to mention among those 30 years with your loan, in this economy you might lose a job. The bank can take away your home, even though you were making payments for YEARS.

[@trr7128]

So do you get any portion of the money paid back? No! It is like a bit car repo! All the product resold, you would have lost it, and the credit to engage in any other adventure! Sadly, it happens a lot. Example: Year 2008. Well, that is the worst case scenario. On the positive side, say, you ever keep up with your income for decades, you may actually own the house, even avoiding refinance at all costs!!!

[@Audikontroller1]

You need to make sure that you are the titled holder, not the bank. But most likely if you know that and confront that they will not lend you as you know the scam.

[@draelmun6056]

Even if you pay it off, you still pay property tax, so the government actually owns your property.

[@1BoiHot]

@@draelmun6056 I swear.

[@angelachanelhuang1651]

someone opened a mortgage loan under my name in a town I don't go to. I don't buy houses. Wells Fargo notified me

[@annabelle_xoxx]

Fun Fact: The French/Latin word mort (death) is the root word in mortgage, therefore, when you sign a mortage contract it actually signifies signing a death pledge.

[@BellyRoll2OP]

They love to gloss over that.

[@wadesuhr]

Contract until death. Life-long contract.

[@donovanjones4175]

Gage also from the French, to engage. A deal to the death.

[@annabelle_xoxx]

I suppose that's where we got the expression "sign your life away". lol

[@RB-nm2lq]

Yep deal dies whether paid or payment fails.

[@africanqueenmo]

This is a fantastic video. Ive always seen mortgages as a scam unless you can pay it off earlier.

[@Biochemistry-Debunks-Corona]

It is in the name: MORTGAGE = DEATH PLEDGE: Latin words Mort-Gage Literally Translated Mort Means (Death) Gage Means (Pledge) "Debt Slavery=Human Mortgages=Debt Till Death!

[@atn2666]

So isn’t that why we should be the corporation and buy to rent out ?

[@donbell8629]

You are correct my friend.

[@hiview3977]

@@atn2666 Absolutely. Except during the pandemic we had voted in politicians into our government that required owners to subsidize their renters by having to pay any expenses on the property while the renter stayed for free. Our government is shutting down small business (you being the corporation) when they pass these kinds of laws. We have to be careful to not vote for those that support this kind of law making. If we want to help the renter, the money needs to go directly to them to pay the owner, not change the rules on the owners. If this continues, it will continue to make things worse and worse for EVERYONE, not just owners. A few corporate landlords vs multiple private landlords, private wins every time, in spite of the bad apples. Meanwhile, I hope you make this happen for yourself while we still are free to.

[@txstbucket44]

Well, that or just never sell and finish your payments in 30 years. I think the idea of paying cash or paying more principal each time is also not a good solution. That money should be going toward interest bearing assets such as investments in S&P.

[@fredashay]

The secret: 1. Make a really big payment early on. 2. Also make a couple of extra regular payments early on, too. 3. And then pay about 10% to 20% more than the payment amount each month. You'll be surprised how early you'll pay off your mortgage!

[@SolomonTheStoryTeller]

I paid mine off in a little less than 3 years. I spent money on essentials and everything else went toward the mortgage. Home was 110k in 2013 now valued at 240k (another scam to get us to pay more property taxes). Been saving up Ca$h since then to buy my next (bigger) home in the next couple of years. Homes should be affordable but we live in a scam economy.

[@fredashay]

@@SolomonTheStoryTeller Good for you! Congratulations! But moving up to a more expensive house is another type of scam. Unless you really need more space, keep your house and enjoy not having a mortgage! Or if you must move because of your job, then buy another house of the same price and still have no mortgage or a negligible one. _(Uhm, you didn't sell yourself into slavery for the promise of nookie a couple times a year, did you?!?!)_

[@SolomonTheStoryTeller]

@@fredashay the goal is to move into a bigger home paid in full (cash) since space will be needed in the near future and rent my existing one which is already paid in full as well. Thankfully I got out of the debt circle a few years back and I have no intention of ever jumping in again.

[@SpiritCannon]

This is not a good strategy. It's best to lump sum thr mortgage in a single mass payoff to avoid having lack of liquidity if you made a large payment early in. Example: You pay 50k early and then run into financial hardship. Home gets repossessed and your out 50k. If you held that 50k or invested it in thr meantime you'd have thar liquidity to fall back on and recover should anything happen. The payments per month don't change by paying a little more.

[@Bread996]

Most people obviously can’t do that. 90% of people mortgage as much home as they can and can barely make the payments. That’s why they are trapped. Also first time homebuyers like myself in Areas with high housing costs like Seattle are going to be stretched thin to purchase any home.

[@kotik1033]

I took a 20 year mortgage and paid it off in 16 years by making overpayments. Owning a home and being debt free is a great feeling.

[@briangeiger9307]

The critical trick to refi is to get a lower interest rate, then pay the same amount as you did before. You will pay off your home faster than if you did not refi. You can always write a check for more to the bank each month.

[@lulufulu4867]

Years ago banks helped me buy my first home. It was a good arrangement, they lent me money and I paid them back with interest. Over the years I realised that wasn’t enough for the banks and noticed them becoming predatory. I realised they didn’t really want people to be successful and independent.

[@EasyRico99]

So I watched this video TWICE, listening to what you said, paused the video and linked to my back for real world fiance numbers (current) and then went and produced my own Excel spreadsheet. I was BLOWN away by the results, confirmed numbers on your online calculator. This is the type of information one may hear and right away say it it BS. Hard to argue the numbers. I'm a fairly discipline dude and this should have my current mortgage paid in just over four years. I sincerely wish I knew this years ago. The KBros are amazing and deserves all the accolades, grace and success coming there way. A ugggge, I mean HUGE thank you! lol I"m a fan and a new subscriber.

[@TheSovereignTrader]

Thank you for sharing such actionable content. Great advice and great delivery. Could not have been more timely as I'm preparing to buy.

[@reneebands4361]

I love rewatching your videos. Between your channel and 2 other channels I will be entirely debt free June 9th, 2023 or sooner. I only wish I saw these videos 1 month before our refinance last March, BUT our 30year will only be a 27 MONTH mortgage now! Thanks!

[@sarinasmith6134]

What are the other 2 channels if ya don't mind?

[@TheInsideMan247]

As I prepare for purchasing my first home, I would like to personally thank you for your content. Not only is your approach easy to understand, it allows enough room for me to do research on my own accord. I appreach the knowledge transfer, and I sincerely wish you the best. Rock on. 🤘

[@patriciaariley5810]

Look out for the consolidation if your money is in a bank you will lose.

[@edwardmay136]

I heard of this strategy before but the way you broke it down really gave me a full understanding of how to use it.

[@TheKwakBrothers]

Thanks!

[@dennyinirio1786]

Again, THANK YOU for sharing your knowledge and sharing your insight into PAYING OFF one’s MORTGAGE FASTER!!!!💪🏻💰🏦💵

[@TheLastBabyBoomer]

Awesome content. I just refinanced...i had to since i had an adjustable mortgage and just came out of being underwater. And I am just a few years from retirement. I now have an interest rate less than 3 percent, which makes me ecstatic but I did not understand this "scam." Thanks. My wife will need to up her principal only payments.

[@criticalthinker8374]

Wow! If I never got a 30 year mortgage, I could never buy my first house. Which I sold and bought a cheaper house and bought stock with the profit, which I made a fortune and paid off my mortgage in just 10 years. But you can just pay extra every month to cut interest.

[@williambuzinski9438]

I stumbled across your page while watching other videos (not financial ones). However, I have really enjoyed this and look forward to going through your library. My wife is a real estate agent I sent her one of your links. She is really enjoying your site. too. Thank you for this video.

[@kittlafem774]

I sent this to so many ppl. Ty ty! For all you do! I hope it can do some good for them.

[@Dtr1993melee]

I’ve always convinced renters to purchase a home especially during the start of Covid when prices were cheap and interest were hovering near low 2 percent. Some of my clients mortgages on a 30 year mortgage has already reached the break even point between interest and principle after one year due to the low interest rates. Housing prices always go up long term. There was extreme fear in the market at that time. Now they’re sitting nearly 1.5x in equity from the inflated prices alone, let alone the principle they have acquired in the last year-2years. Honestly if you have enough money and feel comfortable with the payments and can set aside money for repairs over the course of a few years it’s always a good investment. Home ownership gives people pride and happiness as well.

[@sugarbomb26]

Thank you for sharing your valuable knowledge.

[@ga5957]

My 10 year-old sat attentively throughout your entire presentation. She then turned to me and said “I didn’t know what he is talking about, but it sounds very interesting.” 😂😂😂

[@beckibishop6732]

Forwarded this to my daughter they just bought a house

[@jayc4715]

Youre a hater

[@vildachaya6462]

You should of given her the money for the house so she wouldn’t need to borrow from a bank

[@lamarcurtis1582]

Well damn👀🙄😂😂😂

[@JacksonTaylorandTheSinners]

You’re great at this. Just blew my mind. Thank you.

[@krjourneyfan78]

We are using our HELOC to build a second home, which will be off-grid with the only utility expense being satellite service. We did a cash out refi to buy the land. Now I know how I can further use the HELOC to my advantage. Thank you!

[@jasonwhitaker4883]

This happened to my Step dad when he refinanced my parents house and my mom didn’t know until my step dad had a major stroke and then turned on my mother which led to a divorce. That is when she realized what happened. A house that should have been close to being paid off, wasn’t even close!

[@shekhinahbarak3517]

Thank you for all your help. Very insightful!

[@imjeffshort]

You guys are next level thinking!

[@accordsamurai]

Thank you! I really enjoy this video and the past one I just ingested!!! This was great! Learned a lot

[@fanoir9030]

Keeping this in mind for when I begin my real estate journey hopefully by the end of the year. Thank you Mr. Kwak

[@Michael_Terrell]

amazing thank you so much for explaining this.

[@ante5993]

Thank you for sharing your knowledge~I'm glad this kind of information are now more accessible to the public for free😍 keep up the good work^^

[@victoriamanor5049]

The same thing happens every time you renew your mortgage. Not only usually interest rate goes up but you start from the beginning whatever your balance is ...bigger portion goes towards interest same as at the beginning of getting your mortgage.

[@ladybistre9596]

Really enjoy your channel. I've been interested in financial freedom techniques for a long time but my fear of risk is great so I mostly read about it & learn. I see from the comments that there are many different ways to achieve this depending on your level of knowledge & risk comfort. Your simply sharing a tool that others can learn about & use if the their situation is right for them. I think a 30 yr fix is appropriate for the set it & forget it crowd who are not paying attention to their finances nor are financially savvy, or need to deal with their spending habits first. Maybe I will be in a position to take advantage of this knowledge; but as one person I read about its simply a missed opportunity because I'm not ready to use it, but I have the knowledge in my tool kit when I am.

[@LOVEDOMINATES]

Thank you for explaination

[@danyl123]

Its a scam, not as much as a scam as student loans and university businesses as I like to call them

[@FlyFreeNation]

Thanks for the info 👍

[@stephenoutram3926]

I've always thought amortization was a scam. I did this exact thing years ago to get rid of my mortgage, and it does work.

[@blueduck9409]

Pretty straight forward. Thanks for sharing.

[@redvine4857]

Thank you so much for sharing

[@TedPalmer]

Brilliant! From a CPA.

[@UnwanaUdoh]

This is so enlightening, thanks for sharing this 🙏

[@Mairesa]

This was really informative TY

[@keithgoodwin1760]

Salute for you telling the truth. So many groan adults are stupid if they do not know what they are doing. I literally is seeing people die before they can even pay the house off these days. Family members and friends are dying or suddenly start having financial issues are losing their homes after they have been living in them for 15 to 20 years. SMH

[@memo3252]

Great! However your interest is not locked and payments can change over the life of the loan. People can pay as little as they want or as much as they want. A lot of people will get introuble with these loans just look at Australia.

[@UrbanNaturalist]

Nice math, but the shopper in my household would overspend without physical cash and come up short every month moving us backwards. I prefer to double my interest each month, cutting my mortgage interest in half. Especially impactful early on in the loan. I’m sure this works great for some, but those households with a tight budget, may break the rules and move backwards.

[@hell4raizer]

Yeah my parents would do just that. For me I think the HELOC would be a great option

[@ibealion1]

Paying extra on your mortgage accomplishes exactly the same thing.

[@waynemiller6070]

I couldn't find a lender to make a 1st position HELOC when there was already a loan in the first position. The HELOC would be in second position. So if the house was worth $200K and I owed $120k on the first, the HELOC would only be about $40k best case scenario. 80% of $200k is $160k (LTV) - $120k (1st mtg bal) = $40k (max HELOC amount)

[@shkhamd]

Even worse, if your house was 200k and you still owe 120K, its likely that you already have paid the majority portion of the interest money that belongs to the intial interest heavy period.

[@martinlord5969]

Nationwide's mortgages in the UK are somewhere between a HELOC and a mortgage. You can overpay, and are able to borrow back whatever is overpaid. Interest is calculated daily. Owned my home outright in 15 years on a 25 year mortgage

[@BC-yd6dl]

In the 1980s my dad bought 40 acres of land near a reasonably sized town. When I grew up, we built a smaller house ourselves on that land.. When I got a little older and started a family, I moved into the family home and my parents moved into the smaller bungalow. I've never had a mortgage in my life. My parents were my lender. I did not funnel reams of after tax earnings to a bank. As far as I am concerned, this way of thinking is the only way to protect yourselves against government today.

[@janekay4147]

Absolutely!!

[@jessielynn]

Completely agree! Good for you never having a mortgage. I never bought into the “good debt” idea. I’d much rather buy land and build my house like you guys did.

[@amyedwards556]

Absolutely love this 💕

[@C2yourself]

You're fortunate your dad took that step and it worked to all your benefits

[@hellenacherokeechen9875]

Enjoyed your show.

[@TheKwakBrothers]

Thanks for watching!

[@lyubav.1588]

Thank you very much ! ❤

[@brickcity1711]

Thanks for this life changing information.

[@emilynorris371]

Just found and subscribed to your channel. Great info and great presentation.

[@kaiobikeg8749]

Really informative 👍🏼

[@Hunty49]

Very interesting strategy. Can you use a HELOC to purchase a property? You could still only borrow an 80% LVR against the property right?

[@jeffaardrup5051]

The ideas are really great. The only problem is you need total discipline to do this. I find most people don't have that.

[@pfpchad2747]

Great info!

[@scottyoung5594]

Incredible! So many benefits to this strategy.. especially how you move and park your money and making it work for you.,

[@randal3122]

that was a really great point, and something i had never thought of. regarding restarting the mortgage with refinancing. it doesnt affect me anyways, but all americans should see this video

[@debrajohnston4196]

Great content and presentation!!!

[@theinstructionalarchitect]

Thank you so much for this information. Would this still be applicable to a mortgage that is in private treaty for sale due to pending foreclosure proceedings? I ask because that is the state of my mother's property and she passed suddenly last year when we were in the process of utilizing a buyout method using one of the persons on the mortgage in addition to someone else. We have stopped that process and decided to use the mortgagor's insurance to pay off a portion of the principal and then the idea was to refinance the balance once the claim amount is deducted. Would really love some guidance. However, the mortgage is in Jamaica and I'm not sure if a HELOC is available to us but I certainly see the benefits of it and would much prefer to go that route as opposed to refinancing the mortgage for another 30 years.

[@KyrstOak]

You should definitely ask around where you live if it can be done. Maybe ask financial experts who know about that sort of thing.

[@hermanrogers1325]

When I bought my house in 1999 I set up a savings account and save a third of my mortgage payment over 20 years in 2019 I used that savings to pay off the mortgage and had some money left over. I did with out for those years but truely I needed a place to live so now I am debt free no car note no credit cards debt and no mortgage and I can save 80% of my income you all ways have to have a plan to defeat evil borrowing is evil because they will take advantage of you

[@kii1985]

Good for you

[@TheReferrer72]

How much did your house appreciate? how much did inflation erode your debt, only an Idiot would call a fix rate mortgage a scam!

[@minni1094]

Herman, congrats on the paid off house. If you would have applied that 1/3 of the saved mortgage payment directly to the home as additional principle. You would have paid it off sooner than 20 yrs.

[@hermanrogers1325]

@@minni1094 it was not easy lots times I had to pinch off the savings but I always tried my best to put it back and a little more thanks and best wishes 2 U

[@minni1094]

@@hermanrogers1325 Huge accomplishment I meant no disrespect just spreading good information.

[@hermanrogers1325]

Some people who move every few years spend their whole life paying a mortgage and when they retire they still have a mortgage payment to pay. My plan was to have my mortgage payed off before I retire and so I have been living in the same house for 22 years and it’s payed off now I don’t have to spend my retirement money on the mortgage and I can save my money and sit or lay flat on it. Everyone is trying to buy my house all kinds of offers are coming in but I will never sale it. It is my investment in me.......

[@Chimonger1]

As age & infirmity happen, you might still benefit using a HELOC, to pay for needed remodeling to accommodate you living in your home as long as possible. Also, make sure the properties are protected from taxes & predatory taking, by (I think): 1) filing homestead paper on it with your jurisdiction, 2) setting up a Living Trust, so it goes direct to your heirs without Probate.

[@Chimonger1]

There are other things that might apply, but, those are more common. I listed the homestead paper, which most county staff will look surprised, & say, “nobody does those anymore”. But, I understood, that gives a layer of protection to the property, that MIGHT protect it from “equity scammers”.

[@Momofthree03982]

The concept of paying off a home using a HELOC is great, except you have to be Disciplined in your finances. Avoid over spending, live below your means and constant check ups with your finances. I do agree, lenders want to keep you in debt until your last breath.😢 Thank you for videos like these that show people the options available. Wished, I would have known This over 20years ago. I’m on my 4th home and I refuse to be in debt for 30yrs. I purchased my home in 2018. If all goes as planned, we should have this debt completely gone in 2-3yrs. Can’t wait!!!

[@TienTran-bi1jv]

Hi I still don't understand it. He use heloc to pay off 200k mortgage. So he owe 200k in heloc. So how does he pay off his debt in heloc and how is it helping to lower interest we have to pay to the bank?

[@dougg4633]

Also look at what using the monthly "grace period" does to a borrower does over the life of the loan. All those "grace days" add up and interest added on

[@enantiomer2000]

Good info! I refinanced My 30-year mortgage which was at 3.75% after 4 years for a 15-year mortgage at 2.75%. I wonder if that was smart or dumb...

[@AmySmith-mc8ex]

Excellent content!

[@kevinsspace5773]

But does a heloc have a shorter time frame like 11-15 years compared to the 30 year. So all must be paid within 1/3 of time compared to 30 year

[@soodas]

Leverage is not always bad. Buying and living in a home that you only paid 20% for, and benefiting from the upside, is a huge wealth creation opportunity that you won’t have if you had no debt homeownership.

[@harry356]

The biggest benefit from this construction seems to be that you can put your savings into work to lower interest payments on your house loan - while still being able to withdraw these savings when needed. So no savings account with 10k or 20 or 30k needed but you can put that money to work. Over 10 or 20 year the compount interest adds up.

[@nightowl1on1]

Thanks for sharing wow.

[@trackingthealgorithm221]

Great video

[@pauliusmatiusovas4102]

Well it depends, if all keeps infliating that payment is getting less important. If defliation then harder to payoff. But we only had blips of defliation like 2 years innlast 20 years

[@alvertosb.p.9424]

Thank you for the education. I thought HELOC can potentially cause an owner to loose his/her house if for some reason an owner cannot pay it back on time.

[@CdotForbes13]

What lenders offer a fixed rate 1st Lien HELOC? I had a variable for my last house (sold), building new now, closing in June). I would be very interested in a fixed rate option of 1st Lien.

[@jdavidfletcher]

I have one with PNC. I called about 30 banks until I found one that would do it for me. Very rare, evidently.

[@TamasKalman]

fantastic video / explanation. i’ll never get a mortgage. only buy what you can afford.

[@lorgerdat]

We use an offset account where the interest is calculated on the difference between the total mortgage amount minus the savings in the offset. If you have savings this can drastically bring down your interest.

[@Victic005]

You gotta evaluate your refinance figures very carefully. This video shed light on the Heloc strategy much better than what I've been seeing.

[@tawnymarinoble3802]

Thank god for people like you 🙏

[@whycomes9562]

People need to look at amortization tables for a 30 year loan. You don't actually get to the point where more than half your payment is principal until about year 20. A 15 year mortgage you are immediately paying nearly 75% principal. It's not so much of a scam, it's about time value of money. If you can afford a 15 year, definitely go that route, rates are generally lower too.

[@jpharri]

It really depends on the loan % - lower interest rates = more principle paid out. Our 30yr mortgage is on 2.29% and we've been paying pretty much 50% interest / 50% principle from the start of the loan. My other property loan is around the 15yr mark, and is about 75% principle now on a 1.99% loan.

[@CarlosRamirez-vo1jt]

Mmmm I don’t noe , my home mortgage interest rate 3 percent, Home equity line of credit 5 percent,,, Why would I pay off my mortgage with my line of credit for a higher interest rate , , yes the home will be pay of only if you have enough Credict but then you will have another mortgage with Higher rate … I thing the best idea 💡 is to drop in extra money in to the principal plus find out how much the bank is charging you per day or per month or weekly for interest contributions will be a blessing..

[@dougg4633]

By a rental property using the HELOC as the down payment. Get a 30 year loan on both. Use the income from the rental to invest into something that also increases cash flow.

[@moefritz9568]

You have to have the equity already paid into it for them to lend it to you. For example if the house is appraised at 300k and you owe 200k they will lend you 80% of the 100k equity. So you will end up with an 80k heloc. Not enough to pay off your mortgage.... That's how it works here in Canada, not sure if the states are different.

[@mikeindigo2808]

Agree I don’t know how he gets $270k Heloc on top of existing mortgage of $200k. Makes no sense. It makes me feel he has never done it and this video is completely wrong

[@sheldon8821]

Interest rates are at a 5000 year low. Today's real rate of a 30 year fixed mortgage is actually negative. Today's rising inflation will shred debt repayments in real, not nomianl terms. Combine with state tax interest deductions makes owning a long term fixed low rate mortgage a smart move.

[@Rolls....Royce....]

hahaha this wont age well I promise you...Edit: Don't bother responding now, do so in the next few months when the economy crashes.

[@blinks6736]

@@Rolls....Royce.... heard the “crash” prediction since 2016 😁

[@hamzz6824]

@@blinks6736 I mean it's bound to crash at some point. whatever goes up won't keep going up forever.

[@badactor3440]

@@Rolls....Royce.... there's no need to fear, the orange man will reappear! TRUMP 2024!

[@afrivox]

@@blinks6736 the greatest financial guru Robert kiyosaki has predicting the crash since as early as 2013 or earlier. I remember driving out of town listening to one of his audio in 2013.

[@hunterhemingway]

I appreciate you’re sharing this knowledge. Just want to clarify, you didn’t come up with this method. That’s just certifiably false. Anyone can look up “your” method on the internet & find whole organizations & countless KZbinr’s explains this method. Why can’t people just be 100% transparent. 🤦🏻‍♂️ I wonder if you’re selling anything at the end? Let’s see.

[@canadianpirateanders9951]

I bought a wrecked house that people where selling as is. had to tear down to studs in couple rooms, replace rotten floor, and jack up the sinking foundation. WAS ALot of work. but no mortgage and was cheap. took me 6 months of working all day errday to live in it now. good neighborhood in the burbs. Saved so much money its kinda crazy

[@AlleyCat-1]

If you don't pay on your principal, then your payments won't go down. For the first several your year's your paying strictly interest. So add some extra to go strictly to your principal & the more you can add to paying on your principal the faster your interest drops & the faster you can get your 30 yr lowered. We just bought our house 3 yrs ago & only was able to put 156 & change extra on the principal, but we've already taken close to 5 yrs off our loan & have refinanced 3 times to a lower interest rate. We're still paying the same payment we started off, BUT, our current payment is lower, so we're putting the "extra" on the principal.

[@angeljie6299]

Great info.. How do you get the HELOC in 1st position?

[@joserodriquez7492]

I own my home and tell everybody about this and they say I’m crazy

[@jovelgascon9574]

If the low introductory rate expires on the HELOC, what steps do you suggest to take?

[@cheryang9643]

Just keep going. If you time it right the interest on the HELOC cost you very little compare to the cost of your amortization interest.

[@Wardrumsnetwork]

You sir are amazing.

[@montiz333]

How does this work when your HELOC doesnt doesnt pay off the entire Mortgage. I was thinking about going this route but mine would only cover roughly 33% of my mortgage balance. So is it still worth it? I would have to pay the HELOC and the remaining balance monthly.

[@shuchenpeng]

When refinancing, deduct the number of years you have paid mortgage from the new term (if 30 years) would erase the 'scam' (which is really not, it is based on your loan amount...)

[@BeginningProgrammer]

Yeah it's not a scam. I agree. Heck I wouldn't put up my money for a measly 3% return. That would suck. I'd put someone else's though like the home's appreciation.

[@RLomoterenge]

Now your payment will be higher

[@maryrenaud6732]

Good advice!

[@jenienh.7764]

So we own our home for 5 years and PAID 5/20 years of the mortgage, but.. we just remortgaged because my parents sold us our home for a significant discount with promise we would pay them the rest later (it saved us on property taxes etc.) But after 5 years, once our interest rate was no longer locked we wanted to pay off that substantial personal debt. We have plenty of equity in our home, so we were able to remortgage and loosen up that money and pay that off. We could have done a 15 year mortgage comfortably, but decided on 20 years because of deflation. We figured being in debt is almost a benefit right now. what's your thoughts on this type of thinking? Our mortgage payments are now actually lower then they were before, and I'd love to use our extra $ right now to invest but I have no idea how. I hate the idea of stock markets but something like a GIC isn't keeping up with the rate of inflation. We do have a RESP for our little kids future college/uni fund, and are considering locking that into a GIC, though my understanding on how that all works is very limited. What would be the best thing to do with our savings? lets say 5 grand a year. Should we be making extra payments towards our mortgage? In about 5 years, when we are no longer locked down to mortgage interest rate, and our kiddos are older we are thinking we may move to a bigger home. What can we be doing now to prepare for that? I felt like we were pretty smart, but now Idk anymore. there are just so many factors at play and I feel like we only really considered the inflation aspect. My financial knowledge is super limited, and my husband even less so. Stuff like this just stresses him out so I feel like we have to keep our finances quite simple.

[@joejoe6949]

Can you use a heloc from the start without getting a regular mortgage. Dose this mean i get to keep my money in my checking and not on a down payment ?

[@glenn5580]

I appreciate your explanation, but I do not understand why your point does not take into account that fixed housing cost vs renting or leased property results in increased cost over the same time frame. Plus there are no tax advantages to renting or leasing. Fixed expense vs renting., Isn't that really the issue for most folks??

[@passivedividendsoptions]

So much value, I don't have a mortgage yet, can we use this strategy with our auto loans? Not much left on my auto loan just curious, thanks. Only getting charged around $25/mo in interest so may not be worth the effort.

[@michellel5444]

No. Just pay extra as much as possible.

[@imjeffshort]

2% inflation?! Try 5-13.3% aver.! Nobody likes to calculate the COMPOUNDING effect of 2% inflation each year 🙅‍♂️

[@marshall886]

I think the banks should be made to allow people to pay off the principal first. It is a rort that they make mortgagees pay the interest first.