Wait! Why Have I Not Heard This Before??
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- เผยแพร่เมื่อ 30 ต.ค. 2024
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Thank you for all that you do.... Since I've subscribed to your channel I have paid off $100,000 of debt by practicing what your teaching..... THANK YOU SO MUCH 💯💯💯💯
I must say, I was very skeptical, I had never heard of velocity banking before coming across one of your videos. However, the numbers and figures you were showing made sense. I'm an IT guy and math doesn't scare me. LOL. It took a few months before I had the will to give it a try. It was scary at first. I had this hard pressed belief that credit cards were the devil. However, I am forever convinced now that it works. I had been struggling to pay off a $3000 credit card balance for 12 months. I kept paying on it what I could but I never seemed to make much progress. When I switch to velocity banking type of thinking... using that same credit card to pay expenses, then throwing almost my entire income at it for a payment. I was able to knock out that $3000 balance in two months. Now it's just expenses out... income in and I have money left over.
Thanx for showing the MATH again.
For all the naysayers ----> 12% simple interest beats 6% compound interest EVERYDAY HANDS DOWN !!!!!
Keep up the good work spreading the wealth Christy !!
@@latimer442 🤦♂️
@@glycyldiyou keep arguing this point on all of her videos. While you may be correct, it only works for folks who don’t have complex situations and who have cash in the bank as a cushion.
For those that don’t have money in savings for a cushion and DO have a complex situation this solution works to get out from under oppressive debt while maintaining spending power.
I would say once you’ve satisfied the debt maybe adjust spending accordingly and build a cushion. But this still works to pay things off quickly as well. At that point you would have to do the math to see if velocity banking is worth doing based on interest rates vs. paying principal down with extra cash.
You got the interest rates wrong, compound interest would be increasing interest as in a high yield saving account. The interest calculated on a home loan is exactly the same as on a line of credit, interest is based on what you owe at the time the payment is due. A line of credit is worse because it averages your balance over 30 days, so you pay interest on money that has already been paid, a home loan is fixed.
@@SchnabelMcSchnabel right but with this line of thinking it assumes you have some sort of savings for emergencies. For people who are strapped and can’t simply be left without zero dollars every month this works to alleviate the stress of being paycheck to paycheck. Once you’ve rid yourself of a debt or debts it’s definitely wise to build up emergency funds and use money the way you are proposing.
Honestly the only people against this system have to be bankers and loan officers. Rich people use credit like this all the time.
This line of credit idea is a waste of time and money. You can just make an extra payment each month (12 payments) and accomplish the same thing without the extra interest payment and risk associated with a second higher interest loan. Also if you have an interest rate that is lower than the inflation rate then the loan is actually free.
Just goes to show you, it doesn’t matter how much money you make you can still leverage credit ..😮millionaires and billionaires leverage credit or other peoples money
I appreciate the information so much. My wife and myself have just started your process. She works in a bank dealing with loans etc. We ran the numbers with you absolutely Vanntastic! Thank You and God Bless
Thank you for what you’re doing. I just sent out a text to all my kids with your videos. You’re so relatable. You know the struggle you give all of us. Hope you’ve got me so inspired to not just dream but take steps to accomplish those dreams. Thank you.❤
@user-kp7qd3 THANK YOU! So thankful you are inspired!
I'm new to this but getting ready to buy a house and start a business and believe God put your videos on my page
Im going into 2024 in control of my money, thanks to you!! Thank you! I been watching a lot of your videos and it all makes sense. I’m starting today 🙏
I hear you all the way from Hawaii. I am mind blown 🤯 I just got approved for a $10k LOC I am so excited.
Just confirming that velocity banking can be utilized for existing car loans and unsecured personal loans.
Please and thank you
You’re doing a great service thank you
Ma'am, you are awesome!!!!! Cant wait for our consult.
Hi Ms. Christy you remind me of my former co-worker Ms. Peggy. Thanks for sharing your knowledge and keeping the whiteboard alive!
Great Video!!! Keep'em coming!!! God Bless!!!!!
Happy New Year
Thank you very much for this information it is needed but we have not learned this way or our parents have not taught us things because they didn't know! Thank you for your knowledge!
Hello Christi, thank you for this. Would really like to see you do a side by side comparison of THIS method vs just putting the extra 9k/mo straight onto the principle each month.
It's all about tge chunking.
Yes I would love to see this comparison!
if you go to your bank you can ask them to print out the amortization schedule for your mortgage and you can see how much you will be at
I went to nerdwallet and used the mortgage extra payment calculator. Since the Dr. had $ 9000 cash flow , I wanted to see how much extra he needs to pay the $2000000 mortgage in 10 years. He has to pay $10,000 extra a month to cut the mortgage to 10 years.
The biggest diff is simple interest versus a mortgage interest
God bless u!! And Happy New Year!
Great Education!!! Thank You Christy. Happy New Year!!!
You’re such a blessing!❤
The principsl thing is dont spend the cashflow 9000 monthly in other things, thats the key in this process.
Happy New Year Christy and family! Thank you for all you do!
Thank you for sharing your knowledge. This has helped my sons so much.
God bless you!!
Thanks for all you do.
You are doing God’s work.
I have been making payments for over 20 years thank you so much for this eye opening method 😊
What an amazing woman! Will you marry me? Kidding. Thanks for helping humanity and history will never forget you.
Thank you for sharing your knowledge and helping us to understand it all. Happy New Year!
Why not just pay 9K/month on principal? Doing this, in 9 months the Dr. will have paid down the mortgage by 81K, and have his full 30K for expenses. True, he would owe 19K more on the mortgage by paying down extra principal than doing it all at once with the LOC. But in the velocity example, at month 9 he would have paid the mortgage down by 100K, but he would have no money for expenses unless he borrows another 30K from the LOC at 14%. So in scenario 1 in month 9 he has 19K more in debt at 6.25% on the mortgage, and zero on the LOC, and all expenses paid, and in scenario 2 he has 19K less debt on the mortgage, but 30K more in debt at 14% that he had to borrow to pay his expenses. In both cases he can continue to drive down the debt by using his cash flow. Moving money in and out of the LOC is unnecessary to accelerate the amortization schedule, and owing an extra 19K at 6.25% is better than owing 30K at 14% in month 9.
Another great video from a different perspective, Ms. VANNtastic. I'm just letting you know that I'm casting the first vote for you for the "NOBEL PEACE PRIZE" in finance to humanity. Thank you for educating the masses. Blessings to you.
Thank you so much! I’m feeling really good about 2024🎉
I need these in my life
If I was a doctor, I would have bought a cheaper house, especially if I have business costs.
Thank you so much you are gift to us and we Bless God for you.
The monthly effective interest is 83%, divide the interest of $10,00 into the payment of $12,000. The 6.25% doesn't go into effect until year 26th of the 30-year mortgage. Ouch
Practice Practice Practice
Math can be fun!
Add. Subtract.Divide and MULTIPLY.....
Thank you for all of the information you share. I will be working toward better money habits this year.
Glad I found your channel.
Great video! Thank you for this breakdown on how to use a HELOC in paying off debt.
Thank for your encouragement
Where were you 40 years ago when I could have really benefited from this information. I would have saved hundreds of thousands of dollars.
It seems that we get hung up on the APR and use that as our gage on how much we are paying on a loan, with little thought given to the fact that that is just the interest rate for each year. Cumulatively, that rate compounds into a much larger figure. One of my mortgages is 3.375% APR, but over the 30 years (if I don't pay it off sooner), it is 62% interest. Which is probably more than one of those 'pay day loans' type companies...
Ok, just realized a few others have made this same comment already but I’ll leave this here anyway. If your mortgage company will accept a “chunk” to pay towards your principal amount, then they will certainly accept monthly payments marked specifically to be applied to the principal amount. Wouldn’t this be an easier “no interest “ way to pay down your mortgage?
If you look at the last month for the last payment of the line of credit she leaves his income there untouched. The balance of $100k would not be paid in 9 months including the interest and only 9 months of $9k. So there’s some math that she leaves out here and there. Also in the video that she was talking about with the smaller mortgage she used the interest off the highest part of the total balance of the line of credit to show that it works no matter what. This video she is doing it off the average daily balance. So just the inconsistency of the math in the two problems is enough to tell me that something is going on.
@Pounderino no, the biggest diff is simple interest vs amort. int.
There's a huge diff.
I completed the calculations and guesstimated that he would have his house paid off in 11yrs-3mos. Still paying over $4.3 million, however, Saving about $1.7 million in Interest. Wow! Once he reduces his expenses, his cashflow increases, then he can use that to accelerate the payments. He can cut another year or 2 off in Mortgage payments. Wow,Wow!
That is assuming he reduces his expenses, but great calculation, thanks.
What if he just made a 9K payment every month to principal without the LOC.
@peterlynch599 in this example his expenses stay the same...30k a month.
@@MotorCityEastSidethat would make his monthly expenses go up by 9k instead of staying the same.
One can purchase a single-family home on 1/3 of an acre for less than $80K. Problem is, that house and land is in Danville, VA. C'mon, y'all!
Interesting the math is Sound thank you 🙏🏻 ✝️
I love watching these videos. Thanks🎉
Hi Christy, thanks for teaching us velocity banking. Can you do a seperate video solely for what the each debt tool should have please to choose the appropriate tool to help me. I live in the UK.
I will be getting keys to my flat soon so would like to prepare and make a payment plan to follow, in order to pay off my debt such as mortgage, CC and loans. And eventually reach financial peace. Thank so much advance.
Great Great Great video once again!
The math is WAAAAYYYU off here. If he takes out 100k and outs it to the mortgage principle his line of credit becomes $0.00. his first payment of 39000 will then give out the line of credit at $39000, then 30k expenses out would leave the LOC at only being 9000.00. The bext month he would out in 39k taking it to 48k, minus 30k expenses out. The LOC wouldnonly be at 18k, minus the 800 interest, taking it to 17k. The most youre putting back into paying the LOC is 9k a month. At 9 months thats only 81k. It would take approximately 11.5 months to pay back that 100k, not 9 months
She addressed that in the video
Ad the diff in interest expense each month.
👋👋👋Can an AMEX Gold be used as a PLOC? Can you demonstrate in a video? Thanks for all you do.❤️
Thank you for this most important information this changes everything.
Very intrigued by your video --it blew my mind! What if you can't get a HELOC? I'm sure you have a video on this
Check her other videos, she shows other ways of paying down the debt with other means such as the credit card you might be trying to pay off.
You can do the same with a 0% interest credit card.
Very good case here.
The $9000 cash flow for a year is over 100k, no interest and just straight to principal instead of a hloc, or am I missing something?
Thanks for the video ❤
Help me understand. I'm missing it somehow. If you take ourt what you put in, aren't you breaking even? I don't see how you pay the credit card off.... I'm missing it
Mrs. Vanna, this process does intrigue me. However, I don't understand how the interest payment on the mortgage ( 6.25% annualized basis) by paying a Line of Credit loan at a rate of 12% ( again, on an annualized basis ).
In my mind over the nine months that the physician, in this example, is paying back the first LOC balance he/she is still making payments to the mortgage holder of 12 grand/month. So, the mortgagee is paying two creditors. What am I missing here?
That is amazing! Happy New Year!❤
U are the best
❤❤❤Rhis is definitely not a scheme!!
How much does he now owe on his mortgage? Is it $1,800,000 from using the $200,000 HELOC?
OR did he knock off $1,055,000 off of his mortgage (the $200,000 HELOC plus the $855,000 in interest saved) and now his mortgage is down to approximately $1,000,000?
I have a question, sorry I'm new to this concept and now following so please be kind. If we go in and pay them the say 10,000 down on our home, how should we go about doing that? Example, if I go in to make a payment to our mortgage carrier, they only give me the option to pay additional to principal or escrow and no other options, so I'm assuming that if I put it down on the principal that the interest is not being touched. Just want to make sure if I follow the instructions she is showing, that this will go to the right place to bring the interest down. Thank you.
Great scenario.
Yes this is awesome
I'm loving this channel you are great at your math and the way you helping people, I really need help my sister, my reading not good , wasn't fortunate to go to school, I'm from the Caribbean migrated to ny, Bought a house in 2022 my interest rate is 7.8% on a $510 loan my monthly mortgage is 4,200 I only make 40,000 yearly with 3000 monthly rental, please help me
Explanation the lines of credit available, are you talking about a home equity line of credit?
Very helpful, thanks!
What is the benefit of a line of credit versus just putting the $9k towards the princial every month?
@@latimer442there is if you are cash strapped and don’t have emergency funds. This allows you wiggle room and spending power.
Once you get into a good position financially (paying debts down) then you could use your method. Although, I could argue this would work for paying things off quickly all while maintaining an emergency fund as well. You must be a loan officer or banker to not see the value in using this method. Velocity Banking allows you to be your own bank.
Using your own $9000 towards the payment causes you not to have access to that money again.
The massive reduction in interest.
Another difference is $19k. In 9 months you would have paid only $81 but the LOC is $100k. So you still remove a bigger chunk using the LOC at a lower costing interest.
Doing that you increase expenses by 9k a month.
The best way is pay outright with cash if you can afford it.
In all the examples I have seen there was no mention of the type of mortgage. In order to pay chunks of any amount beyond regular payments, you would have to have an open type of mortgage. They incur a higher interest rate than closed ones. Closed mortgage rules don’t allow for extra payments except for those deemed acceptable by the bank. For this video, did the doctor have an open or closed mortgage?
Unfortunately, an open mortgage is susceptible to interest rate changes that can happen at any time. Just look at the example of the past year when inflation ignited the increases in those rates.
Rbfcu does offer a line of credit at 12%.
Can you get a HELOC if there is no equity? If you just bought the house retail, how do you get the collateral backed HELOC? I love this strategy!
My my all in one heloc which closed in November is 7.75%
A couple things should be cleared up. You have to qualify for a “Equity Line Of Credit” and you have to live in the home long enough to have Equity in it. I.E paid 100k now worth 200k. The issue is most people do not have extra income to the amount to qualify for larger lines of credit. Also you have to report the maximum amount of taxable income as the bank is in with the IRS to show you have money to qualify for the loan. At one time I had enough money to pay my house off in the bank but was using it to flip homes. Because my tax account was good my taxes did not show high income. The bank would not give me a line of credit on the home. Even though i had a perfect credit score. They want to see that IRS form at its max and thats all they care about.
Happy New Year, Christy! I’m struggling with the income deposited into the LOC satisfying the LOC monthly payment. Don’t I still have to account for the bank taking their payment from my budget? Thank you!
Keep watching her videos, it will become clear. Say your payment due is 100.00 and you put your income of 400.00 into the line - your 'payment' was made, now through the month the directed bills will start auto-debiting from your line, slowly inching the balance higher until your next income is deposited, rinse and repeat. What knocks the total balance down is any cash flow - do set yourself up with a tight budget until you are sitting flush, then you can add whatever you need if you find out you are missing it. As a whole people waste money on all sorts and once a budget is in place find out they are better off with less.
He’s still making the mortgage payment out of his monthly payments in addition to the $100,000 he puts down every 9 or 10 months, correct?
What is the advantage of doing this method vs just paying his disposable income as extra principal every month?(which he is spending anyway on loc)
Simple interest.
Good stuff!
Does chunking the mortgage with our extra cash flow monthly do the same thing as a LOC ? We have a 2 % mortgage that's up for renewal on Nov 1 2024 . We are going to try and get a heloc in the spring . Thank you for teaching us what we need to know .
So this method can work, regardless if the person is literally living paycheck to paycheck? And how does this affect the credit score?
Christy is dont want to be poor anymore.. Can you please do a how to get a LOC and what bank are offering high limits.
It would be nice to compare the velocity banking result with making an extra payment of $9000 towards principal every month without using line of credit. The interest saving would be around $1.7 million if making an extra payment of $9000 towards principal every month and the mortgage would be paid off in November 2034. Can velocity banking beat this?
If they do what you're saying expenses go up by 9k... I'm her example they stay the same.
I still don’t get it, where amount of the principal payment of 1916 came from?
He should recast his loan at least every 12 months. This would give home more cash flow to apply to the loc. This will escalate the payment schedule.
Thanks!
@lvg9023 Thank you so much for the SUPER!
Where do you get these line of credits? I’ve only seen business ones
What does it look like to pay expenses out of a line of credit? Do you get a lump sum of money, is it like a checking account…? I’m trying to picture this.
So I’ve heard that you have to find out what kind of HELOC the place you are using has. Some can be used as a bank account that you can direct deposit into and that’s what you need. I’m still trying to find a place that offers PLOC’s though
So what is the options for people who don't have a way to get a heloc or personal loan? People who have fair credit and the loans they can get are over 20% not 12%? What is their options for getting out of debt just the snowball method?
Shoot, the interest on my PLOC is more than 12%. And yes, HELOCs are around 7% do loan signings (notary) and the highest APR I've seen is 7.75%.
Is there a video that talks about the other stuff ? like how to get rid of the heloc when you are debt free what if they want to call my loan to make me pay in full what were your down sides.
Is there a better way to buy a house up front instead of a mortgage
Can you apply for a heloc soon as you close on a home? Since there isn't much equity
So while you put a chunk payment down - you don’t owe mortgage payments during this time?
so good!
This might sound like a stupid question but I'm confused. When you say to transfer the monthly income into LOC do you save up your weekly pay then transfer to LOC all at once or do you transfer each weekly pay as you get paid? Also does weekly payments on LOC help with bringing down interest?
Whether you get paid weekly bi weekly or monthly you transfer your check as soon as you get paid. She is just showing the total income that would be paid for the month. Hope this helps😊
@Jesus-kt5dc that was my understanding.. get the average daily balance down as much as possible .. TODAY : )
She has at least one video that shows weekly income. That's the one that helped me understand how it works for our family's weekly income. It helps bring down interest as each payment is made, yes.
@@SVThailand
Might you be so kind as to post an example?
Thanks
th-cam.com/video/7uF6-CCzXV0/w-d-xo.htmlsi=jRacvhWJSe_eTV59
This strategy will *cost that family $1000s MORE in interest* vs paying their extra $9k straight to the mortgage. Here’s the math:
You are basically just shifting $100k from 6.75% to 12% then paying it off with the extra income. But what if instead he just pays the extra $9k/month he gets onto his mortgage?
That is basically a $9k “chunk” every month - but with 0 interest. Each $9k payment advances down the amortization schedule too.
Just doing the extra $9k towards his mortgage for 1 year ($21,435/m) will save them 4 years and $490k of interest over the life of the loan.
Or paying the $9k extra ($21,435/m) will pay it off in 10.8 years and save $1.7m interest.
Here’s an easy example to understand what’s going on: if a $100k chunk is good, then $200k must be better right? If $200k is good, isn’t $500k better? If $500k is good, then $1m would be better right? And if $1m is good, why not just do the whole thing??? Get a $2m LOC at 12% and pay off the full mortgage! You’ll save all the interest!
But oh wait… now you still owe $2 million… and you’ve doubled your interest rate to 12%. You would owe $20,196 of interest just in the first month on your LOC. What’s the amortization schedule on that? (Yes all debts - including LOCs have amortization schedule and charge more interest at the front - because that’s where the balance is highest)
A $100k ‘chunk’ does the same thing, just on a smaller scale.
P.S. At the end of month 8, you correctly point out that he still needs to pay his expenses- but you don’t build that in to the debt. The LOC isn’t actually finished until just into month 12. (He has a balance of 32k by end of month 8, $23k in month 9, $14k in month 10, $5k in month 11, finally can cover his own expenses with his own income in month 12)
What you are not factoring I ln if he transfers all 9000 to the mortgage every month he has zero dollars free money for any kind of extra expenses, putting all income into the Loc gives him that much extra cash available to use if needed
@@MikeDenius … what you are not factoring in is that they could always get a LOC in an emergency. They will have plenty of equity in the home to get approved for a HELOC if they ever need it.
Also, if you have used your full LOC and paid it all to the mortgage, you ALSO have no liquidity if there’s an emergency. You have no available place to get extra credit cause you maxed out your LOC already.
The liquidity comes by building equity. A LOC is just another loan.
Do you know if you should apply for a HELOC before or after? A new mortgage on a 2nd home
Do you have any examples of the line of credit product from a bank and credit union?
10:50 the quote that will be helpful to anybody
Hi all, I am trying to make sense of this and want to believe it. I have one question about these numbers, there is a $9000 cash flow the Dr. has every month. Since it is not an expense, can’t he pay that as extra payment every month and won’t that have the same effect? What am I missing. I really want to know for I want to use this method.