HELOCs Vs Home Equity Loans Explained | The Pros and Cons
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- čas přidán 28. 11. 2022
- We discuss the differences between a HELOC (Home Equity Line of Credit) and a Home Equity Loan
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Thanks for watching!!
My Dad bought a $300K house in 1993 here in San Jose. It's worth $1.6 Million now and because he took out so many Home Equity Loans, he lost the House and has nothing to show for it. I will never borrow against my house.
it’s a personal decision, but Forbes says housing activities will remain stagnant for the most part of the year, so maybe hold off a little.
Certain Ai companies are rumoured to be overvalued and might cause a market correction, I’d suggest you go with a managed portfolio, but even those don’t perform so well, so it’s best you reach out to a proper fiduciary to guide you, that’s what works for my spouse and I.
I'm new to this, where do I find a fiduciary, can you recommend one?
Sonya Lee Mitchell is the fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
I like how you calmly explain things vs Dave Ramsey being negative and calling everything and everyone stupid.
MG! Loved how you explained this topic. I just was hired into the mortgage business and is absorbing all the insight possible
I placed my order today 🥳. I purchased the bundle and I can't wait! Thank you for your service sir. Love the energy from you, your crew and your guests. Give and it will be given to you...
Awesome!
My firt time listening to you, and absolutely loved how everything was explained. THANK YOU
Awesome!
Line of credit - that makes a lot of sense of how Matt explains it.
Awesome!
This was dope! We’ll be adding the HELOC to my tool kit as well, sitting on dead equity myself. (Dead meaning if it’s not in use, home equity is just ego stroking your net worth)
This guy is smart. I'm glad I found this channel.
Awesome!
Awesome love it. Clear and straight up information 😊
Very nicely done (explanation). Thank you for sharing this true "nugget" on the difference. So when I see HELOC and Home Equity Line of Credit, appears to be the same. However, you broke it down so clear I now know they are truly different. While one is a loan the other is a line of credit that is revolving and you only pay what you use. While with the other you pay on the full loan and it is not revolving or reusable.
But the home line of credit the interest will change it can go up or it can go down. If it goes up then your monthly payment will go up. I don’t think I like that.
Awesome!
I can't express how helpful this was thank you!!
Awesome!
Great video! Great explanation between HELOC VS HELOAN. Thanks.
Awesome!
Thank you so much MG for simplifying the HELOC process! Im able to make a concrete decision 😊
Awesome!
Thank you for the information, actually made a life decision based on the information provided.
Great talk and explainations for the types of loans. I am looking to do a HELOC, thanks!
Awesome!
This is brilliant. We've been considering a HELOC to invest in another home ourselves. I have never heard it explained so concisely. I will definitely be using this video to show to my real estate clients looking to invest!
Awesome!
Home equity line of credit over HEloan every time more flexibility and you can find HELOCs with zero closing costs
Awesome!
Not if your credit score sucks, your DTI is too high, or your have a mfg home.
Thank you so much, I needed this. Love the way you explained it.
Awesome!
Excellent and incredibly useful content. Thank you so much.
Awesome!
wow. perfect timing ,, just had a call today about a HE Loan ,, was kind of feeling it though ,, my man sounded so calm and soothing,, def knows the business,, thx for sharing. ill keep u posted.
Awesome!
Did you end up taking the loan?
@@TeeLovee100 I just secured a $50,500 HELOC, 10.25, 3 yr Draw, 7 yr hold, 20 yr repayment. Have to use a check book to make withdrawals, 48 hours to post mountain time.
Very helpful and wise advice ! Thank you ❤
Awesome!
THIS IS AWESOME INFORMATION!!!! I WAS ABLE TO PURCHASE MY HOME WITH YOUR GUIDANCE DURING THE PANDEMIC WITH 1.5% INTEREST RATE!!!!! kEEP THE INFO COMING
Awesome!
Great information! Thank you both!
This really helped me!!! I think I decided on a he-loan, my property has no mortgage it’s worth about 250k as is ima us it for 100k in renovations, should be worth about 400 then doing a heloc in a few yrs to purchase another property
Thanks for explaining the difference. I’m not looking to invest the money where I would need a revolving line of credit so I think the loan would make more sense.
❤❤
same here
Thank you for this video. I'm needing a loan to buy land and looking for the best way to get the money. This definitely helped.
Me too I’m sick of HOA
Awesome!
Debt is like fire. It can be used to cook your food and keep you warm or it can be used to burn your house down. It is the responsible use of it that matters.
Awesome!
Love this analogy
Yes sure
@@ob2be1 Amen
@@Maggiemagic305 Amen
great video !! Just subscribed
This conversation was very helpful . Thank you
Awesome!
#askMG
Although the bank can’t ensure you use the heloc for rehab purposes, are there IRS tax implications when using the money for other purposes?
I'd rather an equity loan. HELOCs have fluctuating interest rates. I'm not in the financial position to afford fluctuating interest rates.
Thank you, this was very helpful!!
Great information! Thank you, how about a heloc to pay off your existing mortgage?
Hi MG, great explanation of the differences between a H 23:10 E and Heloc. I have been told the Heloc Payment is Interest only for the length of the loan. I.e., 20 yes then you still owe the principal?
You explained this well
Thank you so much, subscribed!
?? If you’ve gotten the Heloc and you’ve purchased an investment property or Primary property and the market crashes, would you be able to access the funds from your Heloc??
When ya'll coming out west fam? Been across the pond and, unless I missed it, haven't seen anything about being in Cali.
Can you deduct the interest on your income taxes on a HELOC OR equity loan like you can on your mortgage interest?
Great lesson!!!
I’m leaning towards the HEloan. Leveraging my primary home is a huge risk.
Credit unions are a credit place to go. I've seen helco intro rates in NY as low 1.99% for 80% LTV and 2.99% for 81%-90% LTV for 13 month. After the intro period, the rates are pretty much the same across board.
@@RynAmelli84 Too many questions.
Started mine at 2.5 % then the rates rose as we all seen . Now it’s at 7.2 % serious increase in the last months wow . Interest only payments that tripled. Mortgages are cheaper rates wow
Should I use a heloc loan to buy a house then use the house I bought equity to get pay the other off
to be clear i use the heloc for the down payment on investment property?
What about 1st lien heloc since mortgage is paid off, what are the risk for this type of heloc, I would use it to pay off credit card debt
If you take 100% of the heloc credit line......will that destroy you fico score. Will you get higher rate bc of lower fico score
#AskMG Here’s my question….I have about 600k equity in my home. I need 180k to convert my garage into a 2 bedroom apartment. In California we can do this. So in my case I need a set amount of money and nothing else what makes more sense for me? The HELOC doesn’t sound practical to me but what do you think??
Is there a benefit of taking multiple HELOCS out? Or is it one at a time?
what's the harm in getting another loan after you pay off and close your home equity loan?
So how do you get a HELOC if you live in Texas??
Hello Can I get a heloc loan 4 months after purchase and if your behind on a mortgage payment?
The HELOC is really a best kept secret if you doing the business right.
Awesome!
Please help me!!! I’m trying to understand this but Multiple Sclerosis makes it difficult to get it.
All depends on the situation
Is a Heloc still good for the average person with no investment properties. Because I just want the money to renovate my home and just pay if back. Is the risk worth it with the variable rate?
#mg… wat happens if you had a forbearance, can u still do heloc?
This helped me out a lot
#MG. I know this is old but what about someone that wants to do a HELOC and doesn't have investments, but maybe wants to do home improvements? Does it benefit them to do the heloc or just a basic home improvement loan or something? Thanks.
How much is a Heloc..or Home equity loan payments per month?
#AskMG What if I want to pull out a home equity loan for a home addition? Which would you recommend? I don't plan on investing in other money making properties so doesn't it make more sense to stick with a home equity loan for the stable payments? This would be after I work with an architect and contract to provide a quote for the project. I would take out more than the quote just in case.
This is exactly my situation. I’m converting my garage into a 2 bedroom apartment for my son. I’m not investing in other properties but my own.
@@roseortega807 In 2 months he hasn't answered my question. Guess we'll never know his take on home additions.
@@Kagamid and 10 months ago the fixed rates were lower ,,, good luck
How is one's net worth determined be the estimated value of a home that one owes to the bank almost in its entirety (minus whatever real equity exists in the home)? Honest question?
#ask MG is a HELOC good for resolving on loan in default.
Should I use Heloc to pay off my credit cards
Did she say she’s not a risk taker but she wants to pull out $100K on $160K in equity?? That’s a MAJOR risk considering even a slight drop in home values (5-10%) almost puts her underwater. RED FLAG!!!
All depends on how she deploys it, If the return on her next venture is 10-15% then when the market pulls back she at least breaks even.
I think she put 100k down, then it appreciated 160k…. So that would be 260k in equity. Still don’t love the idea
You follow them too!!!
What if she do a subject 2 and that person's home is valued at 250,000 with 75% equity in the property at 187,500 with a note at 4%. It really depends on how the money 💰 is used
Can you write off interest of the heloc?
I hope Jordana has a cushion in case her tenant moves or can’t pay rent. That’s a lot of debt
I’m getting all closed door trying to get a heloc for a property that’s in my LLC… I own the property free and clear, it’s worth $175k and my credit score is above 700… did you do your heloc in your own name or in an LLC
Thanks
I was also told credit unions are getting tighter on these loans.
of course!! second mortgages are either getting defaulted on cause the client cant pay it back or they are getting refinanced so the bank loses money and in todays economy its too much of a risk.
Great episode
You can’t just pay off a heloc completely without interest if you owe 50k and you pay 50k towards the help not all goes towards principal
I just wanna pay of high interest credit card debt, and finish my basement, should i just take out a pension loan?
#mg Can you list some lenders willing to do HELOCs on investment properties in NC. I have a couple already listed, but wanted to see if you had some suggestions also.
Did u ever find anyone?
My house is payed for. Want to use equity in my house to invest into property. Don't know what to do...
What is the best HELAC Loan Company
If your older 60 is that too late to build wealth through real estate ?
Okay I just bought a house a couple of years ago..... My question to you is maxed out and I'm making payments on it that's the only thing that I have that's in red. Other than that everything is being paid on a monthly payment of all my necessities. My question is will the credit card stop me from getting the HELOC? #AskMG
#askmg - what is a renovation loan u talked about and is that through your current mortgage loan provider or personal bank?
Love the knowledge black King! appreciate the questions black Queen! Melanated!
#askmg
I’m having a hard time getting a heloc to pay down credit card debt. Credit score is descent however some lines are maxed with no late payments. Any suggestions? Thank you
How do I reach you to provide help?
I would like the same information too. My house is completely paid off.
#askmg I’m in GA and we bought our home and I take it we might be up 75k in equity. I want to know if it was wise to put a heloc to do renovations on the house to boost its value more
Personal preference. Just see the potential return of value. If you plan on selling, it could make you money on the sale. If you’re heading to keeping it, I would save the HELOC for repairs, debt consolidation, and emergencies
How do lenders look at HELOC debt when you are applying for a new home loan, what you’ve used, or what you could potentially use?
I'm a lender. We look at the monthly payment for a HELOC or heloan. Just like a credit, we use the payment due not the potential full amount of the line of credit.
@@TimTomkowiak : Hello … do you know of any banks who offer a fixed rate for a Heloc other than PNC bank?
@@Marie34694 PNC is good for HELOC s etc there process can be slow tho. I can't think of any off the top of my head. But check with a few local credit unions
@@TimTomkowiak thank you 🙏🏽
My question is if you take out the 100k as a down payment on your next cash flowing investment property wouldn’t you be breaking even instead of increasing your monthly income? You mentioned the cash flow of the new property is going to cover your helock and your second mortgage. But rarely if ever is an investment property going to cover your second mortgage, your helock loan, AND actually put money into your pocket all at the same time… you either have to wait until the helock or the second mortgage is paid off to see real cash flow returns.
I was thinking this same thing before I made a decision on getting a HELOC,refinance,or just sell my current property and use some of that money for a larger down payment so I won’t pay PMI.
For the best part a heloc is best for someone who has payed off a mortgage then get a heloc who wants to pay two mortgages on one house a home is for living in and not a gambling tool
First off, a house is never your home. You are just living it for a specified amount of time. While you're living in it, reap some of the benefits. That's really what a house/home is for.
@@BayouHotBoy1 yep that’s right because we all are going to pass away and a new generation will the house belongs to. But it is nice to have a free place to live before we go and give the house to children or grandchildren
Also note you need at least 680 fico in most cases to get theses products.
What are the best places to go i got a 698?
@@jackieroach2124 I am a license loan officer and check out my youtube channel. Usually HELOC's reuired a min of 660, you should be able to get one thru your bank or any other lender that offers these products. Shop around with at least two leaders to get the best terms!
Tell them about the HELOC fluctuating interest rates my brother. One has to be able to afford fluctuating interest rates.
Only reason we clicked on this video, want a complete explanation on that.
He mentioned the rates can go up or down depending on what goins on in the market
Great conversation MG, I would like you to expand with a real world example on how to use the HELOC and the TCO.
some of these are hard to get, i could refer a program i got easily.
Can I sell my home while I have a HELOC out? Say I bought a home for 100k now it's 220k. HELOC allows me to to pay high interest credit cards. Use it how I need - then can I sell the home to repay the HELOC?
When you sell the profit its taken to pay the heloc. I did had a heloc and when I sold it paid off my heloc.
New house inherited no payment I have both heloc and LOC.problem on the LOC the rate has gone up to 7.66%. I'm now in the process of paying both off aggressively I had a spending problem and getting out of debt. It was the worst thing I ever did borrowing on my home to pay my debt...robbing Peter to pay Paul. Verses getting my spending problem addressed. Plus the term is general like 10y min and you typically won't pay more.the amount of interest tie writing off isn't that much.. If I had understood I had a spending problem I would have paid aggressive on the credit card and never touched borrowed against my home.
Again it's my story.. Also if you are a number person look at the amount of interest your actually paying over the total loan.then look at how much you would pay interest if paying the credit card at your max amount.
Also since they take the money out of your account you get comfortable cause the payment can be low and your spending again.
Sorry for the story but just showing what I went through... Good luck..
#askMG
First off, thanks for making this video! I'm an LO and want to get into investing for myself and assisting some of my clients. My question is, for this HELOC example, the minimum draw amount was 25k, do you always have to have a balance of 25k during the draw period?
No.
almost any bank now days that i know of is gonna start your HELOC with a draw and they can be really high, SpringEQ starts you off with a draw of 50K, now given you dont have to keep the money of course but thats how you will start, most likely. HELOC's are open for 10 years where you can draw, pay back whatever you want, draw again, pay back. keep in mind the payment in that time frame is interest only so if the HELOC payment is $500 thats only interest where you need to add whatever you want to the principal ( payment can also increase due to interest rate ). my recommendation to all my clients, if you cant payback the balance in 2-3 years or less dont get one! the amount of interest you will pay in the long run if you dont pay it back quickly can be crazy where it will force you to refi. also if you are financially good and just want a safety net on the side and you know you wont use it..thats a good idea. with rates now days moving faster than normal and how high they are you need to be very careful with HELOCs
What's a band?
Hi, question: I need to replace my roof in the house. I got an incredible quote for metal fooff, but the catch is that I do have to pay cash which I don't have. would you recommend HELOC? thank you
Save up
So if I have a rental, it's wise to get a heloc to do repairs and renovations
No use your own money.
How about get out of debt talk about that
Hello … does anyone know which banks offer the Heloc loan with a fixed rate other than PNC bank?
Pretty much none. I just got my HELOC with PNC. I shopped around and they have the best rate and the only one with a fixed rate on your first draw. After the first draw, it will be a variable rate.
And PNC pays the closing costs if the loan is open for at least three years
Do you mind sharing the rate you got at PNC?
@@ryanjaramillo8152 : Thank you 🙏🏽
@@ryanjaramillo8152 thank you
I've been approved for 30k for a heloc. I only need about 13k to pay off some debt. Can I just take what I need and nothing more?
yes
I feel like the system will fx!$ you anyways. I don't like either the HELOC or HELOAN.
Is there any other way you can tap into your equity w/o taking another loan?
Yup, sell your home. Especially if you fix it up and then sell it.
#askmg. Why do you say don’t invest in Dubai?
You also have to look at your income ,do you have the money for fluctuating interest rates. MG has that bread! He can afford that,lol.
This is what I found out from speaking to a lot of people There Is no difference between a HELOC and equity loan They're both designed to get your house They are hoping and planning that you can't continue to make the payments in some instances with no fixed interest rates
Use them tools,heloc buy 20plex cash flow pay ur 1st(mortgage/homeloan) and 2nd loan(investment 20 plex). Brilliant financial educated mind$!!!!thanks for no fluff get ahead strategic impact advice.
Can you still get them if your house is already paid off?
Most banking institutions prefer to do heloc's on owner occupied homes only! There are a few who don't require this.