How about getting a HELOC to pay for the 30% downpayment of a 700k home and mortgage the rest at 8.50% interest? While also trading in your car for a 10% downpayment of a new Cadillac and loan the rest at 12% interest? 2 mortgages, a HELOC, and a brand new car payment all at the same time would be fine by Dave! Right?
In 2007 everyone I knew was doing HELOCs. They had nice boats, cars, etc. I was driving an older car and smaller house. When the crash came guess who was not under water!!
@@Charlesbjtown right but having 3 HELOCs increases your chance of foreclosure and increases your monthly payments. Payments are always easy to make until you lose your job and the market turns. Best not to do them in the first place. The goal is to have your house paid off before you retire
Great video! For 2023, it’s hard to nail down specific predictions for the housing market is because it’s not yet clear how quickly or how much the Federal Reserve can bring down inflation and borrowing costs without tanking buyer demand for everything from homes to cars.
I suggest you offset your real estate and get into stocks, A recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time!
You are right! I’ve diversified my $450K portfolio across various market with the aid of an investment coach, I have been able to generate a little bit above $830k in net profit across high dividend yield stocks, ETF and bonds.
Well, there are a few out there who know what they are doing. I tried a few in the past years, but I’ve been with Margaret Johnson Arndt for the last five years or so, and her returns have been pretty much amazing.
I am grateful for your assistance. My finances have been in disarray, and I have experienced multiple losses in my 401k, IRA, and mutual funds. I hope that Margaret can provide me with the guidance needed to rectify the situation before it reaches a critical point.
Between houses I put everything in a storage unit and helped out a friend by paying her rent to live in her spare bedroom. It was win-win for both of us. I ended up staying 8 months, longer than planned but I got a fabulous house and she got a few bills tackled from my rent payments. Bonus: it wasn't stressful at all. 👍
Good for you!! I bet the storage monthly fee would NEVER = the 2nd mortgage payment!! Sometimes, depending upon how far away the 2nd home is, the moving company will store your things for a few days, if you have them pick up a partial load & then have the rest of the moving loads picked up & delivered before yours!!
The biggest problem with HELOCs is that most people take unsecured debt and roll into their mortgage to secure it with their home. That's stupid!!😮 If you default on unsecured debt, the bank ruins your credit. If you default on the Heloc, they take your home.
What about if you are locked in at a 2.5% loan back in 2020 and your house has increased 30% since then. HELOC is a great way to remodel, repair a roof, kitchen etc to keep said home above your families head from falling in! You don’t want to refinance the original mortgage but releasing some equity to use for the purpose of improving your home is not a bad idea. Ramsay talks out of his ass a lot. I have friends who swear by his advice and they might be debt free, but don’t own a house, have a 15 year old car paid off and scared to open a credit card. Where is the financial freedom? Sometimes a calculated risk is necessary
It’s actually not a bad idea. If you put a plan together to get the thing paid off in a narrow time window(1 year or less), it’s actually a great way to get some renovations or major work on the home done. Never take one out if you can’t easily make payments to get the thing paid quickly.
as IS Professor ROBERT JENSEN who sees Russia and Cyprus buying their wives and other countries daughters at a discount. and avoiding a large colossal FINANCIAL caldera.
In 2006, my wife insisted that we had a new house to move into when we relocated to VA. SO, managed to get a jumbo HELOC from Countrywide (shudder).. And, we were lucky to sell within 3 weeks of our first house selling (closed on the other place weeks before That).. and didn't take a bath on the sale.. but.. the Cost of a 2 month's interest HELOC with loan origination fee was a whopping + $13K! BIGGEST WASTE of money.. when what we should have done was move, rent, decide on a community, THEN buy with cash. and still have around $10K in pocket! Argh. I STILL shudder to think what could of happened! I've had multiple friends try the same trick.. or paying on 2 mortgages.. and declaring bankruptcy in one case.. that could have been US!!
I’ve noticed a trend with wives making emotional decisions about houses. From my experience, us husbands aren’t that attached to them. It’s just a wooden box to (hopefully) earn some yield on.
Hey Dave, great advice! I am a self made millionaire and still live very frugally. Another point about Heloc loans is "they can be called due and payable at any time"! That is a BOMBHELL THEY CAN EXPLODE AT THEIR CHOSING! You are right pay off debt ASAP AND GET YOUR HOUSE IN ORDER J
I ran into both problems. First I took out a HELOC, and am paying higher and higher interest money on the ARM HELOC. Second, I bought another house, trying to rent out the first one, which didn't go well. Then I tried to sell my original house, closed in one day and fell apart on the last possible day after being off the market (under contract). Now we sold it again in one day, and hopefully will close next week. It's been a lot more costly and stressful than I thought it would have been. Lots of painful mistakes.
I used a HELOC on my first house to pay the down payment on my second house. Worked for me. Of course the mortgage on my first house was only about $700.
I will be happy to give you a loan for $5.00 with a repayment of 100,000 daily percentage rate per 12 hour double repayment per monthly missed repayments.
I think it can be used wisely in some circumstances. I knew someone who was very anti any debt (god bless him! I admired him for that) and be bought a foreclosed home that wasn't the nicest but you know what, he was able to move in it and live in it and most of the work himself) but he had something happen that he had to have fixed (I think it was wiring/plumbing related) his dad convinced him to get a HELOC because of the 0% interest he could get and it would increase the value of his home more than the loan. He was hesitant at first but went along with it. While he was deployed he rented the house to a friend of his that he was close to and trusted and sure enough he had the loan paid off and had some additional savings by the time he came back.
I paid off my house in 17.5 years. With a "decently" paying job, it would have happened much faster. So, I made MOSTLY minimal improvements to the place for those years. I put up with a dark, poorly illuminated basement for all that time among other means of disorganization. Once I got it paid off, the savings account went up aggressively, and then I hammered away at the home improvements. Those 17 years kinda sucked, but I guess there are advantages to postponing pleasure rather than getting it RIGHT NOW.
17.5 years to pay off the mortgage then another year to save up to buy a few light bulbs was better than having taken $20k out to buy the light bulbs and gotten 12 extra years of enjoyment out of your house? You would have paid off the house in 18.5 years with less suffering.
@@chrisfoxwell4128 I said, "among other means of disorganization" and "mostly minimal improvements." Had I postponed all improvements, I would have had it done in about 15 years. I spent all my time working, so even if I had a nicer place, it's not like I could actually take time to enjoy it. I could have bought much more decent cars and enjoyed life a bunch more that way, too and had it paid off in 25 years. If you enjoy paying interest, I guess go ahead. Just don't expect me to pay for them or come to someone's rescue because "things are so expensive these days."
I never understood people who want to renovate without cash. It has taken my husband and I 5 years to slowly renovate our entire house because we saved up money for each project. We did half the work ourselves and the other half (difficult jobs) were contracted out. My MIL recommended we use a HELOC for some of the renovations to ‘get it done faster.’ How ironic that she is still renting in retirement and we have a low interest mortgage with a ton of equity, thanks to the current housing market. It’s all about your mindset which is why I like Dave and co.
A friend years ago had a HELOC. One day they got a letter that their HELOC was frozen by the bank when the economy was starting to crash. He knew people whose HELOC was canceled. I told him that the fact is was only frozen, that it could be unfrozen later on. His wife had a good job, so I told him to pay off what they used so far, and cancel remodeling plans, while he and wife have jobs. The friends he and his wife knew, probably got theirs canceled because they had shaky jobs. I said don't take equity out of the home, because it will not always be there.
I feel that the last bull run was bolstered by all the money being printed. Major returns next bull run but I think they will be tamer in my humble opinion. A 10x on LVRCH CAPITAL and a 15x on polygon are fair considering how much those two coins are interwov
I took a HELOC out on my nearly paid off home to buy my current home in 2018. Yes, it was risky. But it was a very motivated market at that time and our house had 7 offers before it went to show. I don't regret it at all because it worked out really well, but i don't think I'll do it again.
Today I paid off my HELOC. I sold 40 acres of farmland for a good profit and all my debts are gone. If I don't screw up I never need to worry about money again. I don't feel like a debt free scream, I just feel drained.
I think it depends what you want to FOMO into LVRCH CAPITAL . Some people's objective isn't to stack up on BTC, some people think we're just getting started because BTC dominance is only getting bigger mate. A greater opportunity awaits those that have different goals in mind.
Interest only mortgages and paying off interest only, no endowment no savings? OUCH I was one of the last to get interest only however for me it worked in my favour , always putting into savings and throwing it at the mortgages , 3 mortgages just finished 15 years before time To buy my house now would be 17 times my wages, I’d have zero chance
Median net worth is less than the median home sales price for every age group. Including retirement aged people. Don’t let the banker make your moves for you.
In Canada, the banks let you skip a mortgage payment once a year and during Covid you were able to stop paying your mortgage for six months. My buddy got a 200K mortgage 16 years ago and today he owes about $225K.
We have been on a recession since the beginning of 2022, but big media and governments all over the world didn’t want to admit it. We need to be wise and use our brains. Knowledge is power and I’d like all the family to be powerful! Just purchased some LVRCH CAPITAL Thanks for keeping us informed during this times of doubt?
Years ago my friends Mom who is a retired Real Estate broker. She told me it's a mistake to take out loans on the house you live in and is a good way to loose your home. She explained you need to stop looking at your home as a investment and as you home you live in , do not take loans out to buy cars , to pay bills etc you have to live someplace. She's actually 103 today still sharp and living in her paid off nice house those helock loans interest changes and your payments can go up. Don't do them
Keep in mind that during the 80’s people were encouraged to save due to the interest rates. Right now there’s very little incentive to save because those who are saving are watching those who are reckless taking it in. I’ve been trying to save for a home and it’s been discouraging to watch prices continue to not budge because there’s people willing to get into a mortgage where they’re paying 40% of their income. It’s insane.
Consider investing in stocks especially during a recession . While recessions can be tough, they can also offer good chances to buy low and sell high in the markets if you're cautious. Just remember, this is not financial advice, but it's a good time to think about buying stocks since having cash on hand isn't always the best option.
Thank you for this tip. it was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé
This reference seems valid.. Just looked up her full name on my browser and found her webpage without sweat, over 15 years of experience is certainly striking! very much appreciate this.
I nearly tried using a HELOC to help reduce the leftover principal on my home, found it way easier to budget and dump a fair sum of my paycheck into the principal instead. It’ll take less time to pay off the mortgage and I’ll have fewer fees to worry about.
I am retired now, I used to always tell my clients once their house was paid off to continue to make the mortgage payment to themselves. Why, because once a house is paid off just like your car it needs repair work. If you just keep putting the money in the bank,money market, CD Etc it'll be there when you need it. 😊
My heart goes to the entire community for LVRCH CAPITAL building up something even my grandpa can understand. This is so smart by them to launch it to shatter the doubts and fears of the common folk which is not even correct to begin with. Everyone knows the state of inflation and recession now and the way out is already in progress. Now it's just about catching the big fish
Ah, the wisdom imparted by thy father is indeed a cautionary tale that resonates with the teachings found in the Holy Scriptures and advocated by The Church of Jesus Christ of Latter-Day Saints. In the Book of Proverbs, we are counseled, "The rich ruleth over the poor, and the borrower is servant to the lender" (Proverbs 22:7). In The Book of Mormon: Another Testament of Jesus Christ, we find similar cautionary guidance against avarice and imprudence: "Ye do not remember the Lord your God in the things with which he hath blessed you, but ye do always remember your riches, not to thank the Lord your God for them" (Helaman 13:22). Both Ramsey Solutions and The Church of Jesus Christ of Latter-Day Saints discourage the acquisition of debt and counsel their followers to be wise stewards of their resources. The Doctrine and Covenants, another volume of scripture, adds to this wisdom: "Pay the debt thou hast contracted... Release thyself from bondage" (D&C 19:35). I testify, with the sincerest affection of brotherly love, that engaging in financial transactions that bind us in debt often leaves us in positions of servitude, both financial and spiritual. This is contrary to the fullness of the Gospel of Jesus Christ as maintained by The Church of Jesus Christ of Latter-Day Saints. Therefore, let us heed the wisdom of thy father and that of the scriptures, living our lives free from the chains of financial bondage. Amen.
Banks take a huge risk in giving out loans. If you don’t pay, they have to claw their money back. Your only risk is not making enough money, which was always a risk in your life.
We just closed on the sale of our property two weeks ago. I had a contract on a house we were purchasing at the same time. The closing was about 10 days apart. Two days before the closing the seller passed away. Plus he had no will. All to say things can happen during a house sale/purchase. We're glad we got ours sold, now we're waiting to hear from probate.
A good close friend of mine and his partner bought a house together. After a bit, he did a heloc to consolidate his debt onto the house. It wasn't a problem. Until a few moths ago, when the friend tragically passed away in a car accident. The partner has to sell the house because he can't afford the new mortgage. So tragic.
@Sashowindfeather my condolences to your deceased friend’s partner. Reverse mortgages and Helocs are extremely risky. I would never recommend either one of those loans. But if anyone should ever decide to take one of these loans, protect your house and family with a life insurance policy that will cover the loan balance and the mortgage. Some people purchase mortgage insurance to avoid a required medical screening. And sometimes the minimum amount of insurance available is 10’s of thousands of dollars more than the balance of the loan. But these types policies are paid directly to the lender. And no matter how much insurance money remains after the loan is paid, THEY are the only beneficiaries. That’s why a term life insurance policy is better for coverage of home loans. You can get a higher value policy for a smaller monthly premium. But there’s no equity built in the policy, and if you outlive the term your policy ends. So if you’re still young enough, a whole life policy will not cost too much, but the policy values are usually less than term life insurance policies. However, they can cover smaller Heloc or reverse mortgage loan balances, and build equity to borrow from, (with interest, so keep that in mind, so that the beneficiaries will have money left in the policy). Premium rates are locked in for life and based on your age when you purchased the life insurance policy. Your beneficiaries can choose to use the money to pay off your home loans and use the rest of it for other expenses. Or they can allow the lender to foreclose on the house, or do a forced sale. The remaining equity,(if there is any left), can be used along with the insurance money for a new home or another investment. I’m Not an expert or an agent. And I’m not a lawyer. So anyone reading this reply should consult with those professionals first before they decide to invest in any of these things.
That's so sad. It's such a difficult thing to lose one's partner. But having all that additional financial stress and losing one's home on top of that is just awful. :(
Housing in Europe faces diverse challenges, including affordability, urbanization, and sustainability, prompting innovative solutions and policies. In light of the impending recession and the fact that inflation remains above the federal reserve 2% target, several leading market analysts have expressed their views on how dire they believe the economy will be, next recession and how far stocks may go. I need advice on what investment to make because i want to build a portfolio for my children that will be worth at least 800,000 dollars
There are many interesting stocks in many industries that you could follow. You dont have to act on every Forcast. So i suggest you work with a financial advisor who can help you choose the best time to buy and sell stocks or ETFs you want to purchase.
Only a good FA guide will be enough to guide you through the current market volatility. I've been talking to an advisor for a while now, mainly because i don't have the experience or stamina to handle these recurring market conditions. The fact that he made over $300,000 proved that there is more to the market than the typical person is aware of. The best course of action now is to hire a financial consultant, especially for people who are nearing retirement
Can't deny the fact that LVRCH CAPITAL is the strongest bet to bring power back to this industry after we suffered FTX, Celsius, Tera and so on. Sure if they fail it's done for good, but I don't see that the biggest tech company in the world would put everything at risk just for that.
My elderly father got into the LOC thinking. Every few years he'd take out this loan to either go on vacation, pay bills, whatever - then over the next two years he would pay it off. He did this for many years. Then he got a letter from the bank - I can't remember the details, but it apparently was a change in terms.He called me up (he's about 94 at the time) complaining about how the bank was ripping him off. I went to the bank with him and we discussed it with a manager. I told him I would pay the LOC off for him with the condition he never did it again - but instead have the bank move the amount of money he had been paying every month from his social security into his savings account. In the past he had trouble paying big ticket items like taxes, etc - but soon he never complained about any unexpected bills. When he passed 4 or 5 years later he enough money in his savings to pay all his bills on his house while it was in probate - so none had to be taken from the proceeds after the sale.
A HELOC was the single biggest mistake I ever made. I DID manage to eventually get out from under it, but NEVER AGAIN! I tell everyone to try ANYTHING else instead. It almost cost me my home.
I had no choice but to get one bc my homeowners insurance forced me to redo my roof brand new even though it was perfectly fine!!! I live in south Florida and the insurance here is crazy bc of the hurricanes! I had just bought the home a year before this happened I was not financially ready! Now i have to pay down that debt but I have 10 years to do so, I’m just not thrilled about paying 9%. In trying my best to pay it down as fast as i can
Hi Mr. Ramsey. We are following your advice and progressivley eliminating our debt. There is one thing I need your help on and trust you on how to go about it. HOW DO WE GET OUT OF OUT WESTGATE TIME SHARE? No judgetment please 🙄
If 88% of the people who consolidate their debt go further into debt,then I was part of the 12% who didn’t. I used a HELOC to help get me out of CC debt. I knew the risk of turning unsecured debt into debt backed by my house, but to me, the 10+% difference in interest rate was worth it. Saved me thousands. Now the HELOC is at $0.00 and I don’t plan to use it ever again. I only have the remaining 6 years on my mortgage and no other debt whatsoever.
I used it that way as well, actually the loan threshood was below that of the requirement to get an appraisal so it was more of just a sig loan. We bought a new house and I used the proceeds to wipe out the loan. Never again will I carry cc debt.
I only owe $35K on my home. The thought of tapping into that equity makes me cringe! I want to go forward not backwards! I worked too hard to get to this point. I'm a single lady that has worked my butt off. Every single time I log on to Mr Cooper to make a payment, a box pops up over the screen trying to get me to take out a HELOC!
There’s a story told about a woman who approached Jascha Heifetz after a concert and said, “I’d give my life to play like you.” And he simply replied, “I did.” A college piano student who won a national competition around 20 years ago was asked how he found time for a girlfriend. He replied, “The piano is my girlfriend.” I got to hear him and his teacher talk about his journey to the national competition; he was practicing up to 8 hours per day. It’s called sacrifice.
I used a heloc to buy my nextdoor neighbors house. I turned my house into a rental. Now I don't have a mortgage payement at all due to rental income. Both homes are appreciating and being paid off. I will have twice the net worth because of this move.
I think it was in the 90s where "home equity loans" gained popularity, Clinton was president, the housing market was wild, and "mega houses" moved in. Now, how many people have lost their homes, how many can't sell their mega homes, and if they do they end up taking a loss. In my area these mega homes are sitting on the markets for years.
Thanks for clearing that up ! What gets me is the companies the encourage it ,like Royal Canadian Legion, Carp ,some financial advisers . Thank god I listened to you!🇨🇦
@@johnSmith-uz8nl Problem is the kind of people that get that far in debt on credit cards are usually serious about building debt but not necessarily paying it off.
This happened to a friend at work. They bought the new house, the sale on the old house fell through, and now they had two house payments. A few months on they put BOTH houses up for sale. Very motivated seller! The NEW house sold--for less than they paid. So they were back in their original house and a lot poorer.
What's wrong with using a HELOC in order to repair and update your house for sale? I only need a relatively small part of my equity. In my case I'll be moving into another property that is paid off. I'm on a fixed income and there is no cash flow possibility with the mortgage payment.
I love the philosophy of moving debt from an unsecured source (credit cards) to a secured source (your house). You could wind up losing your house over a credit card balance if something goes south.
Someone I just sold my first home and bought a second in 2021. I have a 2.250 interest rate for 15 years. I pay double principal payments. My mortgage company called me about refinancing to take out equity. No!
I learned from Rich Dad Poor Dad when I was 12 about how the house you live in is _not_ an asset (since it brings in no money and requires maintenance) and how home equity is not beneficial. I made the mistake of telling a friend's mom what I was learning and she argued the point with me... Unfortunately even though I was "right" I was 12 and wrong by default of age 😒
@@RoofDRyxe306hell, rent is more than the cost of a mortgage nowadays. OP will never build wealth with his stupid mindset. I can guarantee that my house has increased in value over what I paid for it by double and I only have about $50k more in it than I paid.
@hadtocheathimtobeathim6549 I hear you. But 90% of what he teaches is valid and works. BUT the house being a libiliaty rather then asset is where he gets me. I understand where he's coming from when he says it but it should have a statement following it as WHY it is.
@@RoofDRyxe306 technically, he’s right. There’s no wealth added until you sell it, assuming the market goes up. And when hasn’t the housing market gone up? Maybe in very short spells it doesn’t, but it always recovers and goes up at some point.
@@RoofDRyxe306 Obviously, you didn't read the book, as the author isn't necessarily an advocate of renting. His point was that the house you live in should NOT be viewed as an "investment".
Hi Dave, do you think this reverse mortgage thing, or as they call it, ‘equity release’ plan is a good idea for people in retirement to get some extra cash flow please? Thank you!😅😊
Just make the offer on the new place conditional on the closing of the first. This is a very common contingency. Sure it might make it slow down the transaction a little but it offers a lot of assurance.
@@channell11 for the buyer, hedging the risk is worth the small premium they might have to offer to incentivize their conditional offer. e.g. years ago I sold my home, had an open house and received 2 offers, the first was no conditions at all at ~2.5% over the list price, the other offer was subject to an inspection and financing but was ~5% over list price, I ended up accepting the conditional offer for more money.
are cooperatives a good investment? i bought a 3 bed 1.5 bath home for $55 k and pay $610 per month which includes everything but electric bill. please respond. i bought two years ago in 2021 for $55k and i can sell for $80k now
@@alinatamashevich3354 I would argue that as soon as you can get the 20%(mostly to avoid PMI but usually get a better rate too) and assuming the end mortgage/escrow/insurance cost isn't more than 1/3 of your monthly income then right now is the best time to get out of renting. Housing is just going to increase in price and by the time the rates get lower your home equity mixed with the rates will make refinancing a breeze. A friend of mine went from a 30 year 3.5% down home in 2017 to a 2020 refinance into a 15 year and his payment only went up 10%. He also received a portion of his equity as cash that he used to pay off a credit card and rolled the rest back into the mortgage. To be fair the 2020 rates were a dream and saved me a good amount of money too. I think people need to also start as small as possible and try to bring the monthly cost down as much as possible. Equity is too powerful to ignore when the government restricts construction.
I went through the "homeless" month when we moved. We planned two weeks in a long term stay hotel when they took longer to make the place available and we couldn't extend that we spent the other two weeks with the Inlaws. I spent quite a bit of time at work those two weeks.
We took equity money out of our home decades ago, to help out my father in law who was supposed to pay us back monthly. Ya, he never paid us back and when we sold our house, that loan was deducted from the rest of the equity we had in the home. Less profit. Grrrrrr
Do you know how many people do bridge / helocs? A good agent will add it to the toolbox and if the buyer goes that route and the agent is realistic w a worst case scenario and preparing the home for market while the home their buying waits to close and lists immediately markets properly and prices correctly then it’s a feasible option for buyers / sellers
I took out a HELOC to pay down my Margin Loan! 🙂 No, really! I was facilitating buying a HUD Repo Fixer upper house for my daughter and husband, (long story why it took many, many, months for them to finance, non their fault) I didn't want to sell any mutual funds and be taxed so, I borrowed on margin at 1.99%. I margined up to about 40%, at 50% they start selling your funds, so it was suggested to me that I should pay that down a bit, so I took out a Heloc with a 0.99% teaser rate for 6 months and paid down the margin loan. Nine months later the kids had the house rehabbed and refinanced. They paid off the mortgage I gave them and I repaid all I borrowed. Happy ending. But you should not do it! 🙂
I wonder if Dave knows about the negative amortization mortgages going on in canada. HELOC's got nothing on a mortgage balance that goes up every month.
It can be seductive but I glance at my mail while walking back to the house and all solicitations go in the trash the instant I walk in the house :) Stay strong my friend :)
Do ppl use checks? I am 26 and I have never used a check. Only signed and deposited them from jobs into the bank. Is it worth it to get a pack of checks? I’m sure I could eventually figure out how to fill one out.
If you and your spouse have a HELOC, you'd better check it from time to time. My friend was taking money out of their's and not telling her husband. She was giving it to their adult child who had a bad character. My friend's behavior was enabling the adult child. Eventually the husband found out. It was a sizable amount. It was a very bad day when her husband found out.
How can the husband not know tho? Does he not pay attention at all and tolerate lies from everyone in his family? Wife is a scumbag for doing it, but he was negligent in letting it get to that point and marrying a woman/raising kids who would do that.
Dave, you have to understand that you are where you are because of FAILURE. 90% of people must go through their path of life. That's failures, risk, accomplishment, and losses. Your advice is wise, but zero risk equals zero reward. Yes, in a long term waiting period going your route will keep most people from bankruptcy and hardship but it will also keep most people from accomplishing bigger goals as you program a "no risk mentality" into your teachings. Every business owner I've ever met or listened to online has taken RISK to get where they are. Failure is one of the greatest teachers in all aspects of life.
Unfortunately, lots of people don't learn the right lesson from their failures. They just limp along from one thing to another their whole lives. I've seen it first-hand.
I was very close to getting a HELOC. Started the paperwork and everything. But I kept doing research and thinking on it, crunching numbers, budgeting out several years in advance and ended up not signing to papers to pull the trigger. Never got the HELOC. I've never regretted that I didn't get it. I know 100% that I would have regretted if I DID get it.
I just paid off my HELOC 10 minutes ago for $12746.78. 😂 I feel a lot better. I opened it in 2019 at 2.2%. It’s current APR at 10.7% interest only. I used it to flip a house which I made 70k. No risk, no reward. Now I don’t need to use it for my next project.
Actually in buying my 1st home in 2005 , I was issued a HELOC as a down payment of 20%. The issue is that it was not disclosed what a Heloc was or that that is what we were buying. The implications were disastrous for years .
This is absurd that people actually do this? I've been debt free since 2014 and never looked back. Zero house, car, college, or credit card debt. Debt free is the life for me. 🙏
@@danielsinfronteras Google it. What’s your penis size? What’s your religion? What’s your political status? How many women have you slept with? What’s your debt to income ratio? Are you pro life or pro choice? Answer those questions and then I’ll tell you my wealth. 😉
Most people don’t know that you can LOCK IN your interest rate on a HELOC!! In 2021, I took out a HELOC for renovations and locked in the rate at 5.5% and structured it for a 20year payoff. I did not have to refinance! Had I not done that, the rate would have been over 10%!
It totally depends on specifics. I purchased our recent home with money from a HELOC and this worked out perfect for us. In our area near Seattle it takes a long time to find the right house that you were looking for and you have to be ready to act quick when you find what you want. Our mortgage on our first house was it very affordable. We were able to remodel our new house and then sell the previous. However we could have easily rented out our previous home. When we sold our previous house we took the profits and then recasted our loan on our new home they can get far more affordable. Maybe a higher risk tolerance then some would be willing but for us this strategy worked out great
How to make the decision on whether to sell my condo or rent it out and have that passive income??? I feel like its location is growing and growing and think it might be a good property to sell down the road for retirement, as long as the hoa dues dont skyrocket... any tips??? Please and thank you!!!!
Me too, they act as if it is "free money". Why would you risk your house, and how many times do you want to pay off your house? People are so dumb when it comes to finances.
@@mrlion2022 I agree. Most people wonder why they have no money and thousand dollar car payment or get to retirement with nothing saved but they always had a brand new boat. Most people do not have money because of their own decisions. What I’m shocked by is most people don’t put enough in 401k and the number one reason for 401k loans is to pay off debt (which they will do again) and number 2 reason for a 401k loan is to go on vacation.
Homeless is the intent of the real estate market making homes so expensive our children are out of luck with stupid interests rates. UP GOES THE HOMELESS RATE.
If they suck at remodeling and selling, but some people are very talented. As with everything in life only so many people can become professionals or highly talented at this process, Majority of soccer players suck, we only watch about 1000 of them every day, and really only pay attention to 5 of them 😂
I'm 53. I've got friends who have paid off their houses and never borrowed another cent. I've got friends who have used their houses as an ATM. I can assure you that as people my age start staring down the barrel of retirement, retrenchment or redundancy... whichever comes first, those with nothing owing on their homes sleep a lot, lot more comfortably.
For the first gal, she can just put her home up for sale now. Once she goes pending on a new home she can do buyer possession and move into the house under contract "renting" it out until she sells her house. The seller gets their mortgage paid, the lady gets out of her house sooner. I use HELOC's all the time, but not for something like this.
"It would be stressful not to have somewhere to live...." . There are fully furnished, short-term rentals in most major cities. Pack up all your stuff in a POD, store it until your house sells, live in the fully furnished, short-term rental meanwhile, and then move at your leisure once the new house closes. Worst case scenario, you spend a couple thousand bucks in some short-term rentals. Cheap insurance to make sure you do this right.
Investors buying up single-family homes and renting them out is driving up rents and home prices, putting renters and would-be homebuyers at risk of becoming homeless.
@joshuathompson6844 bro the only reason they can get away with this temporarily is due to them not building enough homes. When the homes are built major investors will leave that market.
What is wrong with an equity line to reroof. It runs about 25k to reroof the homes in my neighborhood. That is a lot of cash necessary to have on hand.
Someone need to call Dave and ask if it’s ok to take out a heloc to pay for the down payment on a car lease
This is such a chaotic comment. I love it 😂 just Dave supporters calling in nonsense to get him riled up.
How about getting a HELOC to pay for the 30% downpayment of a 700k home and mortgage the rest at 8.50% interest? While also trading in your car for a 10% downpayment of a new Cadillac and loan the rest at 12% interest? 2 mortgages, a HELOC, and a brand new car payment all at the same time would be fine by Dave! Right?
yes!! call it in and watch daves head explode haha! @@Rockboygg
A friend was actually considering taking a heloc so that he could BUY A NEW CAR!!! I couldn't believe what I was hearing.
If you haven’t saved for the car down payment, you can’t afford to buy it.
In 2007 everyone I knew was doing HELOCs. They had nice boats, cars, etc. I was driving an older car and smaller house. When the crash came guess who was not under water!!
Never do a HELOC. Paying off a house once sucks. Paying it off multiple times is dumb. Never risk your home.
yep
Unless you're willing to work until you're dead.
Having a HELOC *makes* you work until you're dead@@thesmockinggunYT
It's already at risk, if it has a 1st mortgage on it. A heloc really isn't much different.
@@Charlesbjtown right but having 3 HELOCs increases your chance of foreclosure and increases your monthly payments. Payments are always easy to make until you lose your job and the market turns. Best not to do them in the first place. The goal is to have your house paid off before you retire
Great video! For 2023, it’s hard to nail down specific predictions for the housing market is because it’s not yet clear how quickly or how much the Federal Reserve can bring down inflation and borrowing costs without tanking buyer demand for everything from homes to cars.
I suggest you offset your real estate and get into stocks, A recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time!
You are right! I’ve diversified my $450K portfolio across various market with the aid of an investment coach, I have been able to generate a little bit above $830k in net profit across high dividend yield stocks, ETF and bonds.
Well, there are a few out there who know what they are doing. I tried a few in the past years, but I’ve been with Margaret Johnson Arndt for the last five years or so, and her returns have been pretty much amazing.
I am grateful for your assistance. My finances have been in disarray, and I have experienced multiple losses in my 401k, IRA, and mutual funds. I hope that Margaret can provide me with the guidance needed to rectify the situation before it reaches a critical point.
Between houses I put everything in a storage unit and helped out a friend by paying her rent to live in her spare bedroom. It was win-win for both of us. I ended up staying 8 months, longer than planned but I got a fabulous house and she got a few bills tackled from my rent payments. Bonus: it wasn't stressful at all. 👍
Good for you!! I bet the storage monthly fee would NEVER = the 2nd mortgage payment!! Sometimes, depending upon how far away the 2nd home is, the moving company will store your things for a few days, if you have them pick up a partial load & then have the rest of the moving loads picked up & delivered before yours!!
The biggest problem with HELOCs is that most people take unsecured debt and roll into their mortgage to secure it with their home. That's stupid!!😮 If you default on unsecured debt, the bank ruins your credit. If you default on the Heloc, they take your home.
Absolutely!! Nevet move unsecured debt which could be eliminated in the event of bankruptcy to secured debt. That's just idiotic🎉
FEEDBACK: I LOVE this new content structure, Dave Ramsey's commentary piecing the clips together is excellent. Thank you.
Can't imagine using a heloc for anything. Your home is your family's shelter. You don't put a basic need at risk. Dave, as always, is dead on.
I put a new roof on my family's shelter with a heloc. This prevented putting our basic needs at risk from water damage
What about if you are locked in at a 2.5% loan back in 2020 and your house has increased 30% since then. HELOC is a great way to remodel, repair a roof, kitchen etc to keep said home above your families head from falling in! You don’t want to refinance the original mortgage but releasing some equity to use for the purpose of improving your home is not a bad idea. Ramsay talks out of his ass a lot. I have friends who swear by his advice and they might be debt free, but don’t own a house, have a 15 year old car paid off and scared to open a credit card. Where is the financial freedom? Sometimes a calculated risk is necessary
@@why6212💯
It’s actually not a bad idea. If you put a plan together to get the thing paid off in a narrow time window(1 year or less), it’s actually a great way to get some renovations or major work on the home done. Never take one out if you can’t easily make payments to get the thing paid quickly.
as IS
Professor ROBERT JENSEN who sees Russia and Cyprus buying their wives and other countries daughters at a discount. and avoiding a large colossal FINANCIAL caldera.
In 2006, my wife insisted that we had a new house to move into when we relocated to VA. SO, managed to get a jumbo HELOC from Countrywide (shudder).. And, we were lucky to sell within 3 weeks of our first house selling (closed on the other place weeks before That).. and didn't take a bath on the sale.. but.. the Cost of a 2 month's interest HELOC with loan origination fee was a whopping + $13K! BIGGEST WASTE of money.. when what we should have done was move, rent, decide on a community, THEN buy with cash. and still have around $10K in pocket! Argh.
I STILL shudder to think what could of happened! I've had multiple friends try the same trick.. or paying on 2 mortgages.. and declaring bankruptcy in one case.. that could have been US!!
I’ve noticed a trend with wives making emotional decisions about houses.
From my experience, us husbands aren’t that attached to them. It’s just a wooden box to (hopefully) earn some yield on.
@@InternetUser._ Can't blame it totally on the woman. I just wanted to be Mortgage free.. and, we did get there!!
@@Techreux O I’m with you. She’s certainly not all to blame, we willingly participate lol.
Hey Dave, great advice! I am a self made millionaire and still live very frugally. Another point about Heloc loans is "they can be called due and payable at any time"! That is a BOMBHELL THEY CAN EXPLODE AT THEIR CHOSING! You are right pay off debt ASAP AND GET YOUR HOUSE IN ORDER J
I ran into both problems. First I took out a HELOC, and am paying higher and higher interest money on the ARM HELOC. Second, I bought another house, trying to rent out the first one, which didn't go well. Then I tried to sell my original house, closed in one day and fell apart on the last possible day after being off the market (under contract). Now we sold it again in one day, and hopefully will close next week. It's been a lot more costly and stressful than I thought it would have been. Lots of painful mistakes.
I used a HELOC on my first house to pay the down payment on my second house. Worked for me. Of course the mortgage on my first house was only about $700.
I will be happy to give you a loan for $5.00 with a repayment of 100,000 daily percentage rate per 12 hour double repayment per monthly missed repayments.
I think it can be used wisely in some circumstances. I knew someone who was very anti any debt (god bless him! I admired him for that) and be bought a foreclosed home that wasn't the nicest but you know what, he was able to move in it and live in it and most of the work himself) but he had something happen that he had to have fixed (I think it was wiring/plumbing related) his dad convinced him to get a HELOC because of the 0% interest he could get and it would increase the value of his home more than the loan. He was hesitant at first but went along with it. While he was deployed he rented the house to a friend of his that he was close to and trusted and sure enough he had the loan paid off and had some additional savings by the time he came back.
I paid off my house in 17.5 years. With a "decently" paying job, it would have happened much faster. So, I made MOSTLY minimal improvements to the place for those years. I put up with a dark, poorly illuminated basement for all that time among other means of disorganization.
Once I got it paid off, the savings account went up aggressively, and then I hammered away at the home improvements. Those 17 years kinda sucked, but I guess there are advantages to postponing pleasure rather than getting it RIGHT NOW.
17.5 years to pay off the mortgage then another year to save up to buy a few light bulbs was better than having taken $20k out to buy the light bulbs and gotten 12 extra years of enjoyment out of your house? You would have paid off the house in 18.5 years with less suffering.
@@chrisfoxwell4128 I said, "among other means of disorganization" and "mostly minimal improvements."
Had I postponed all improvements, I would have had it done in about 15 years. I spent all my time working, so even if I had a nicer place, it's not like I could actually take time to enjoy it.
I could have bought much more decent cars and enjoyed life a bunch more that way, too and had it paid off in 25 years.
If you enjoy paying interest, I guess go ahead. Just don't expect me to pay for them or come to someone's rescue because "things are so expensive these days."
@@paulstandaert5709 , yeah, not taking about buying toys. I'm talking about adding comfort, enjoyment, and value to your home.
And now you will die…..you waited too long
We paid ours off in 12. Same thing. Delayed all non mandatory improvements until we finished then cash flowed renovations.
I never understood people who want to renovate without cash. It has taken my husband and I 5 years to slowly renovate our entire house because we saved up money for each project. We did half the work ourselves and the other half (difficult jobs) were contracted out. My MIL recommended we use a HELOC for some of the renovations to ‘get it done faster.’ How ironic that she is still renting in retirement and we have a low interest mortgage with a ton of equity, thanks to the current housing market. It’s all about your mindset which is why I like Dave and co.
A friend years ago had a HELOC. One day they got a letter that their HELOC was frozen by the bank when the economy was starting to crash. He knew people whose HELOC was canceled. I told him that the fact is was only frozen, that it could be unfrozen later on. His wife had a good job, so I told him to pay off what they used so far, and cancel remodeling plans, while he and wife have jobs. The friends he and his wife knew, probably got theirs canceled because they had shaky jobs. I said don't take equity out of the home, because it will not always be there.
My dad always raised me to use cash, and up to the time he died, he never had a credit card.
I feel that the last bull run was bolstered by all the money being printed. Major returns next bull run but I think they will be tamer in my humble opinion. A 10x on LVRCH CAPITAL and a 15x on polygon are fair considering how much those two coins are interwov
Is LVRCH capital the new Bernie Madoff?
I took a HELOC out on my nearly paid off home to buy my current home in 2018. Yes, it was risky. But it was a very motivated market at that time and our house had 7 offers before it went to show. I don't regret it at all because it worked out really well, but i don't think I'll do it again.
The trend I'm getting sick of is people bidding 30-50k over asking price on EVERYTHING under 300k.
It’s called black rock
Today I paid off my HELOC. I sold 40 acres of farmland for a good profit and all my debts are gone. If I don't screw up I never need to worry about money again. I don't feel like a debt free scream, I just feel drained.
Congratulations!
How sad, glad that you're finally free
Congratulations
I think it depends what you want to FOMO into LVRCH CAPITAL . Some people's objective isn't to stack up on BTC, some people think we're just getting started because BTC dominance is only getting bigger mate. A greater opportunity awaits those that have different goals in mind.
I had a HELOC at Wells Fargo a few years ago. They don't even offer them any more due to the risks.
I know a lot of people approaching retirement that sill owe what they originally paid or more for their homes 😢
Interest only mortgages and paying off interest only, no endowment no savings? OUCH
I was one of the last to get interest only however for me it worked in my favour , always putting into savings and throwing it at the mortgages , 3 mortgages just finished 15 years before time
To buy my house now would be 17 times my wages, I’d have zero chance
That sounds horrible, since most pensions only pay you half of your gross Work Monthly Salary?
Median net worth is less than the median home sales price for every age group. Including retirement aged people. Don’t let the banker make your moves for you.
In Canada, the banks let you skip a mortgage payment once a year and during Covid you were able to stop paying your mortgage for six months. My buddy got a 200K mortgage 16 years ago and today he owes about $225K.
@@johnSmith-uz8nll got a $191k mortgage 2.5 years ago. Currently at $50k balance. Will be paid off in 1.5 years at the 4 year renewal time.
We have been on a recession since the beginning of 2022, but big media and governments all over the world didn’t want to admit it. We need to be wise and use our brains. Knowledge is power and I’d like all the family to be powerful! Just purchased some LVRCH CAPITAL Thanks for keeping us informed during this times of doubt?
Where did you get your economics degree?
Years ago my friends Mom who is a retired Real Estate broker. She told me it's a mistake to take out loans on the house you live in and is a good way to loose your home. She explained you need to stop looking at your home as a investment and as you home you live in , do not take loans out to buy cars , to pay bills etc you have to live someplace. She's actually 103 today still sharp and living in her paid off nice house
those helock loans interest changes and your payments can go up. Don't do them
Keep in mind that during the 80’s people were encouraged to save due to the interest rates. Right now there’s very little incentive to save because those who are saving are watching those who are reckless taking it in. I’ve been trying to save for a home and it’s been discouraging to watch prices continue to not budge because there’s people willing to get into a mortgage where they’re paying 40% of their income. It’s insane.
Consider investing in stocks especially during a recession . While recessions can be tough, they can also offer good chances to buy low and sell high in the markets if you're cautious. Just remember, this is not financial advice, but it's a good time to think about buying stocks since having cash on hand isn't always the best option.
@@ThomasChai05Mind if I ask you to recommend this particular coach you using their service?
Credits to "Camille Alicia Garcia", she maintains an online presence. Just make a simple search for her name online.
Thank you for this tip. it was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé
This reference seems valid.. Just looked up her full name on my browser and found her webpage without sweat, over 15 years of experience is certainly striking! very much appreciate this.
I nearly tried using a HELOC to help reduce the leftover principal on my home, found it way easier to budget and dump a fair sum of my paycheck into the principal instead. It’ll take less time to pay off the mortgage and I’ll have fewer fees to worry about.
You were going to borrow on your house to pay off your house?
@@darkgalaxy5548IYKYK
@@darkgalaxy5548lol.
I am retired now, I used to always tell my clients once their house was paid off to continue to make the mortgage payment to themselves. Why, because once a house is paid off just like your car it needs repair work. If you just keep putting the money in the bank,money market, CD Etc it'll be there when you need it. 😊
I double my principal payment each month. to get mortgage company off my back sooner than later. now I paid only property taxes and insurance.
My heart goes to the entire community for LVRCH CAPITAL building up something even my grandpa can understand. This is so smart by them to launch it to shatter the doubts and fears of the common folk which is not even correct to begin with. Everyone knows the state of inflation and recession now and the way out is already in progress. Now it's just about catching the big fish
The scammers are really these channels hard.
@@ralphholiman7401 Your comment makes no sense.
@johnnastrom9400 , yes, it does. All these are scams. You know it. How many old retirees savings have you stolen?
No it doesn't, you're missing a crucial word. You know it. Maybe you mean "The scammers are really *hitting* these channels hard"?@@ralphholiman7401
My father once told me.
" When you step into a bank to get a loan understand they are going to make money off of you while you take risk.
That is their only business, DEBT
Ah, the wisdom imparted by thy father is indeed a cautionary tale that resonates with the teachings found in the Holy Scriptures and advocated by The Church of Jesus Christ of Latter-Day Saints. In the Book of Proverbs, we are counseled, "The rich ruleth over the poor, and the borrower is servant to the lender" (Proverbs 22:7). In The Book of Mormon: Another Testament of Jesus Christ, we find similar cautionary guidance against avarice and imprudence: "Ye do not remember the Lord your God in the things with which he hath blessed you, but ye do always remember your riches, not to thank the Lord your God for them" (Helaman 13:22).
Both Ramsey Solutions and The Church of Jesus Christ of Latter-Day Saints discourage the acquisition of debt and counsel their followers to be wise stewards of their resources. The Doctrine and Covenants, another volume of scripture, adds to this wisdom: "Pay the debt thou hast contracted... Release thyself from bondage" (D&C 19:35).
I testify, with the sincerest affection of brotherly love, that engaging in financial transactions that bind us in debt often leaves us in positions of servitude, both financial and spiritual. This is contrary to the fullness of the Gospel of Jesus Christ as maintained by The Church of Jesus Christ of Latter-Day Saints. Therefore, let us heed the wisdom of thy father and that of the scriptures, living our lives free from the chains of financial bondage. Amen.
Banks take a huge risk in giving out loans. If you don’t pay, they have to claw their money back. Your only risk is not making enough money, which was always a risk in your life.
@@tr5946 that's why I have little to nothing to do with them.
Yes comrade, businesses like to make money.
We just closed on the sale of our property two weeks ago. I had a contract on a house we were purchasing at the same time. The closing was about 10 days apart. Two days before the closing the seller passed away. Plus he had no will. All to say things can happen during a house sale/purchase. We're glad we got ours sold, now we're waiting to hear from probate.
A good close friend of mine and his partner bought a house together. After a bit, he did a heloc to consolidate his debt onto the house. It wasn't a problem. Until a few moths ago, when the friend tragically passed away in a car accident. The partner has to sell the house because he can't afford the new mortgage. So tragic.
WOW! Thanks for sharing!
@Sashowindfeather my condolences to your deceased friend’s partner. Reverse mortgages and Helocs are extremely risky. I would never recommend either one of those loans.
But if anyone should ever decide to take one of these loans, protect your house and family with a life insurance policy that will cover the loan balance and the mortgage.
Some people purchase mortgage insurance to avoid a required medical screening. And sometimes the minimum amount of insurance available is 10’s of thousands of dollars more than the balance of the loan. But these types policies are paid directly to the lender. And no matter how much insurance money remains after the loan is paid, THEY are the only beneficiaries.
That’s why a term life insurance policy is better for coverage of home loans. You can get a higher value policy for a smaller monthly premium. But there’s no equity built in the policy, and if you outlive the term your policy ends.
So if you’re still young enough, a whole life policy will not cost too much, but the policy values are usually less than term life insurance policies. However, they can cover smaller Heloc or reverse mortgage loan balances, and build equity to borrow from, (with interest, so keep that in mind, so that the beneficiaries will have money left in the policy).
Premium rates are locked in for life and based on your age when you purchased the life insurance policy. Your beneficiaries can choose to use the money to pay off your home loans and use the rest of it for other expenses. Or they can allow the lender to foreclose on the house, or do a forced sale. The remaining equity,(if there is any left), can be used along with the insurance money for a new home or another investment.
I’m Not an expert or an agent. And I’m not a lawyer. So anyone reading this reply should consult with those professionals first before they decide to invest in any of these things.
That's so sad. It's such a difficult thing to lose one's partner. But having all that additional financial stress and losing one's home on top of that is just awful. :(
that got me into trouble some years ago - consolidated into a new mortgage and paid it off - never again...being debt free is much nicer.
Housing in Europe faces diverse challenges, including affordability, urbanization, and sustainability, prompting innovative solutions and policies.
In light of the impending recession and the fact that inflation remains above the federal reserve 2% target, several leading market analysts have expressed their views on how dire they believe the economy will be, next recession and how far stocks may go. I need advice on what investment to make because i want to build a portfolio for my children that will be worth at least 800,000 dollars
There are many interesting stocks in many industries that you could follow. You dont have to act on every Forcast. So i suggest you work with a financial advisor who can help you choose the best time to buy and sell stocks or ETFs you want to purchase.
Only a good FA guide will be enough to guide you through the current market volatility. I've been talking to an advisor for a while now, mainly because i don't have the experience or stamina to handle these recurring market conditions. The fact that he made over $300,000 proved that there is more to the market than the typical person is aware of. The best course of action now is to hire a financial consultant, especially for people who are nearing retirement
Wow, would you mind telling me how i can use your service to get in touch with this financial advisor?
His name is Derrick Alan Sands.
He has been providing both entry and exit points for the values i focus on. You can make a quick check on him.
He is on instagram
Can't deny the fact that LVRCH CAPITAL is the strongest bet to bring power back to this industry after we suffered FTX, Celsius, Tera and so on. Sure if they fail it's done for good, but I don't see that the biggest tech company in the world would put everything at risk just for that.
A lot of people lost their homes during the housing crisis in 08 due to borrowing against their home. People have short attention span.
Sooo true!!!😢
My elderly father got into the LOC thinking. Every few years he'd take out this loan to either go on vacation, pay bills, whatever - then over the next two years he would pay it off. He did this for many years. Then he got a letter from the bank - I can't remember the details, but it apparently was a change in terms.He called me up (he's about 94 at the time) complaining about how the bank was ripping him off. I went to the bank with him and we discussed it with a manager. I told him I would pay the LOC off for him with the condition he never did it again - but instead have the bank move the amount of money he had been paying every month from his social security into his savings account. In the past he had trouble paying big ticket items like taxes, etc - but soon he never complained about any unexpected bills. When he passed 4 or 5 years later he enough money in his savings to pay all his bills on his house while it was in probate - so none had to be taken from the proceeds after the sale.
Love this lol!! Super thankful to have found out debt was not a good thing at a young age!! God bless all!!!
I've known 3 people stuck with 2 mortgages. They all regret it and have PTSD from it.
Yep…. There are A LOT of stupid trends out there.
A HELOC was the single biggest mistake I ever made. I DID manage to eventually get out from under it, but NEVER AGAIN! I tell everyone to try ANYTHING else instead. It almost cost me my home.
I had no choice but to get one bc my homeowners insurance forced me to redo my roof brand new even though it was perfectly fine!!! I live in south Florida and the insurance here is crazy bc of the hurricanes! I had just bought the home a year before this happened I was not financially ready! Now i have to pay down that debt but I have 10 years to do so, I’m just not thrilled about paying 9%. In trying my best to pay it down as fast as i can
strange because insurance covers roofing if there was a disaster
Gotta love all the debt heads that think they can outsmart a Banker! That is like beating the casino!
Took out a HELOC in 2006, foreclosure came in 2007..Bad decision..😢😢 The payment was out of my capabilities..🤑🤑
Hi Mr. Ramsey. We are following your advice and progressivley eliminating our debt. There is one thing I need your help on and trust you on how to go about it. HOW DO WE GET OUT OF OUT WESTGATE TIME SHARE? No judgetment please 🙄
If 88% of the people who consolidate their debt go further into debt,then I was part of the 12% who didn’t. I used a HELOC to help get me out of CC debt. I knew the risk of turning unsecured debt into debt backed by my house, but to me, the 10+% difference in interest rate was worth it. Saved me thousands. Now the HELOC is at $0.00 and I don’t plan to use it ever again. I only have the remaining 6 years on my mortgage and no other debt whatsoever.
I used it that way as well, actually the loan threshood was below that of the requirement to get an appraisal so it was more of just a sig loan. We bought a new house and I used the proceeds to wipe out the loan. Never again will I carry cc debt.
Good for you. You have more discipline than most. For most, it's best to avoid the HELOC I think.
You are too smart for Dave Ramsey now. move on to other investment channels. Ramsey is for chicken littles who don't know how to do math.
Holy crap. How much cc debt did you have to save thousands?
Dave loves to use strawman arguments.
I only owe $35K on my home. The thought of tapping into that equity makes me cringe! I want to go forward not backwards! I worked too hard to get to this point. I'm a single lady that has worked my butt off.
Every single time I log on to Mr Cooper to make a payment, a box pops up over the screen trying to get me to take out a HELOC!
Go girl!
Same here 👍
And who the hell is "Mr. Cooper"? "Mr. Cooper, meet Betty Crocker." 🤣
@@johnc2438 A MORTGAGE company
I know Mr Cooper aka Nation Star 😅
Same here 😂
There’s a story told about a woman who approached Jascha Heifetz after a concert and said, “I’d give my life to play like you.” And he simply replied, “I did.”
A college piano student who won a national competition around 20 years ago was asked how he found time for a girlfriend. He replied, “The piano is my girlfriend.” I got to hear him and his teacher talk about his journey to the national competition; he was practicing up to 8 hours per day.
It’s called sacrifice.
I used a heloc to buy my nextdoor neighbors house. I turned my house into a rental. Now I don't have a mortgage payement at all due to rental income. Both homes are appreciating and being paid off. I will have twice the net worth because of this move.
Caller: “My question is…”
Dave: “no”
Thank you for airing this topic 👏🏻👏🏻
The answer to cash flow problems is more cash flow - not more debt.
Depends on the person. I use the heloc all the time. Now own 6 properties, 4 STR and 1 long term rental - all with positive cash flow. Thanks though.
I think it was in the 90s where "home equity loans" gained popularity, Clinton was president, the housing market was wild, and "mega houses" moved in. Now, how many people have lost their homes, how many can't sell their mega homes, and if they do they end up taking a loss. In my area these mega homes are sitting on the markets for years.
Thanks for clearing that up ! What gets me is the companies the encourage it ,like Royal Canadian Legion, Carp ,some financial advisers . Thank god I listened to you!🇨🇦
Sounds like a bridge loan and that is the most stressful expensive deal! I would never ever do that!
If you were paying 26% on credit cards... you may consider a HELOC BUT you need to be serious about your debt.
@@johnSmith-uz8nl Problem is the kind of people that get that far in debt on credit cards are usually serious about building debt but not necessarily paying it off.
@@channell11 I agree, becoming rich is not about how much you make it is more about a mind set.
This happened to a friend at work. They bought the new house, the sale on the old house fell through, and now they had two house payments. A few months on they put BOTH houses up for sale. Very motivated seller! The NEW house sold--for less than they paid. So they were back in their original house and a lot poorer.
In an eerily similar situation ourselves 😢
The first lady just drove by Dave's answer. 😅😅😅
What's wrong with using a HELOC in order to repair and update your house for sale? I only need a relatively small part of my equity. In my case I'll be moving into another property that is paid off. I'm on a fixed income and there is no cash flow possibility with the mortgage payment.
The banks must hate Dave, these are great videos and information, I'm in the UK but most of it is the same. Thanks
They don't worry about Dave. Only a small minority of people who need to listen to him actually take his advice and put it into action.
NOTE: Davis Ramsey Is simply INDISPENSABLE! How can we live without this man?
I love the philosophy of moving debt from an unsecured source (credit cards) to a secured source (your house). You could wind up losing your house over a credit card balance if something goes south.
wisdom!❤
Someone I just sold my first home and bought a second in 2021. I have a 2.250 interest rate for 15 years. I pay double principal payments. My mortgage company called me about refinancing to take out equity. No!
I learned from Rich Dad Poor Dad when I was 12 about how the house you live in is _not_ an asset (since it brings in no money and requires maintenance) and how home equity is not beneficial. I made the mistake of telling a friend's mom what I was learning and she argued the point with me... Unfortunately even though I was "right" I was 12 and wrong by default of age 😒
That's BS why? RENT is the cost a mortgage and everybody needs a place to live.
@@RoofDRyxe306hell, rent is more than the cost of a mortgage nowadays. OP will never build wealth with his stupid mindset. I can guarantee that my house has increased in value over what I paid for it by double and I only have about $50k more in it than I paid.
@hadtocheathimtobeathim6549 I hear you. But 90% of what he teaches is valid and works. BUT the house being a libiliaty rather then asset is where he gets me. I understand where he's coming from when he says it but it should have a statement following it as WHY it is.
@@RoofDRyxe306 technically, he’s right. There’s no wealth added until you sell it, assuming the market goes up. And when hasn’t the housing market gone up? Maybe in very short spells it doesn’t, but it always recovers and goes up at some point.
@@RoofDRyxe306 Obviously, you didn't read the book, as the author isn't necessarily an advocate of renting. His point was that the house you live in should NOT be viewed as an "investment".
Also, the collateral for the HELOC is the home. So if one gets behind and does not pay it off they could lose their house. Not worth it.
Additionally with a HLOC if something unexpected happens you now have your house at risk.
Hi Dave, do you think this reverse mortgage thing, or as they call it, ‘equity release’ plan is a good idea for people in retirement to get some extra cash flow please? Thank you!😅😊
I can’t imagine using my house as an ATM. So glad I’m debt free.
An atm that you pay interest on and if you can’t pay it you lose your house
Congratulations but the world is not interested in your personal business.
Same ! 👍🏻😊
Just make the offer on the new place conditional on the closing of the first. This is a very common contingency. Sure it might make it slow down the transaction a little but it offers a lot of assurance.
That's an option, although in a lot of areas with housing being in such high demand sellers may be less inclined to do it.
@@channell11 for the buyer, hedging the risk is worth the small premium they might have to offer to incentivize their conditional offer. e.g. years ago I sold my home, had an open house and received 2 offers, the first was no conditions at all at ~2.5% over the list price, the other offer was subject to an inspection and financing but was ~5% over list price, I ended up accepting the conditional offer for more money.
are cooperatives a good investment? i bought a 3 bed 1.5 bath home for $55 k and pay $610 per month which includes everything but electric bill. please respond. i bought two years ago in 2021 for $55k and i can sell for $80k now
As a Realtor, I cringed as soon as she told them her plan. Yikes!
I cringe when anyone in 2023 buys a home😂
I cringe that Realtors say there is NO bad time to buy a home, sure, they make money on ALL transactions.
@@alinatamashevich3354 I would argue that as soon as you can get the 20%(mostly to avoid PMI but usually get a better rate too) and assuming the end mortgage/escrow/insurance cost isn't more than 1/3 of your monthly income then right now is the best time to get out of renting. Housing is just going to increase in price and by the time the rates get lower your home equity mixed with the rates will make refinancing a breeze. A friend of mine went from a 30 year 3.5% down home in 2017 to a 2020 refinance into a 15 year and his payment only went up 10%. He also received a portion of his equity as cash that he used to pay off a credit card and rolled the rest back into the mortgage. To be fair the 2020 rates were a dream and saved me a good amount of money too.
I think people need to also start as small as possible and try to bring the monthly cost down as much as possible. Equity is too powerful to ignore when the government restricts construction.
Ok relax@@alinatamashevich3354
There are always opportunities out there
I went through the "homeless" month when we moved. We planned two weeks in a long term stay hotel when they took longer to make the place available and we couldn't extend that we spent the other two weeks with the Inlaws. I spent quite a bit of time at work those two weeks.
Taking equity out of your home is a nightmare
We took equity money out of our home decades ago, to help out my father in law who was supposed to pay us back monthly. Ya, he never paid us back and when we sold our house, that loan was deducted from the rest of the equity we had in the home. Less profit. Grrrrrr
@@cjhoward409is this because it was in the second lien position?
Not if you are in a position where you have plenty equity and a mortgage locked into a low rate.
@@cjhoward409 not being paid back is the issue here not the loan. Bad decision for you in your situation, not all equity loans are bad
Do you know how many people do bridge / helocs? A good agent will add it to the toolbox and if the buyer goes that route and the agent is realistic w a worst case scenario and preparing the home for market while the home their buying waits to close and lists immediately markets properly and prices correctly then it’s a feasible option for buyers / sellers
I took out a HELOC to pay down my Margin Loan! 🙂 No, really! I was facilitating buying a HUD Repo Fixer upper house for my daughter and husband, (long story why it took many, many, months for them to finance, non their fault) I didn't want to sell any mutual funds and be taxed so, I borrowed on margin at 1.99%. I margined up to about 40%, at 50% they start selling your funds, so it was suggested to me that I should pay that down a bit, so I took out a Heloc with a 0.99% teaser rate for 6 months and paid down the margin loan. Nine months later the kids had the house rehabbed and refinanced. They paid off the mortgage I gave them and I repaid all I borrowed. Happy ending. But you should not do it! 🙂
I wonder if Dave knows about the negative amortization mortgages going on in canada.
HELOC's got nothing on a mortgage balance that goes up every month.
My mortgage company keeps emailing me and calling trying to get to take out a HELOC!😡Im glad I clicked on this video
It can be seductive but I glance at my mail while walking back to the house and all solicitations go in the trash the instant I walk in the house :) Stay strong my friend :)
@@curiouscat3384 will do! Thx!
Do ppl use checks? I am 26 and I have never used a check. Only signed and deposited them from jobs into the bank. Is it worth it to get a pack of checks? I’m sure I could eventually figure out how to fill one out.
If you and your spouse have a HELOC, you'd better check it from time to time. My friend was taking money out of their's and not telling her husband. She was giving it to their adult child who had a bad character. My friend's behavior was enabling the adult child. Eventually the husband found out. It was a sizable amount. It was a very bad day when her husband found out.
So what happened?
Wow
He whooped that trick?
How can the husband not know tho? Does he not pay attention at all and tolerate lies from everyone in his family? Wife is a scumbag for doing it, but he was negligent in letting it get to that point and marrying a woman/raising kids who would do that.
Dave, you have to understand that you are where you are because of FAILURE. 90% of people must go through their path of life. That's failures, risk, accomplishment, and losses. Your advice is wise, but zero risk equals zero reward. Yes, in a long term waiting period going your route will keep most people from bankruptcy and hardship but it will also keep most people from accomplishing bigger goals as you program a "no risk mentality" into your teachings. Every business owner I've ever met or listened to online has taken RISK to get where they are. Failure is one of the greatest teachers in all aspects of life.
Unfortunately, lots of people don't learn the right lesson from their failures. They just limp along from one thing to another their whole lives. I've seen it first-hand.
Dave always talking about my Job, SoFI I working on the banking side
The 1st lady needs to sell her house and negotiate a 4 month lease back so she can stay in the house while she looks for a new one-problem solved.
best one ive heard
That's assuming the new owners aren't planning to move into it?
I was very close to getting a HELOC. Started the paperwork and everything. But I kept doing research and thinking on it, crunching numbers, budgeting out several years in advance and ended up not signing to papers to pull the trigger. Never got the HELOC. I've never regretted that I didn't get it. I know 100% that I would have regretted if I DID get it.
I just paid off my HELOC 10 minutes ago for $12746.78. 😂 I feel a lot better. I opened it in 2019 at 2.2%. It’s current APR at 10.7% interest only. I used it to flip a house which I made 70k. No risk, no reward. Now I don’t need to use it for my next project.
Actually in buying my 1st home in 2005 , I was issued a HELOC as a down payment of 20%.
The issue is that it was not disclosed what a Heloc was or that that is what we were buying.
The implications were disastrous for years .
This is absurd that people actually do this? I've been debt free since 2014 and never looked back. Zero house, car, college, or credit card debt. Debt free is the life for me. 🙏
what is your wealth?
@@danielsinfronteras Google it. What’s your penis size? What’s your religion? What’s your political status? How many women have you slept with? What’s your debt to income ratio? Are you pro life or pro choice? Answer those questions and then I’ll tell you my wealth. 😉
Most people don’t know that you can LOCK IN your interest rate on a HELOC!! In 2021, I took out a HELOC for renovations and locked in the rate at 5.5% and structured it for a 20year payoff. I did not have to refinance! Had I not done that, the rate would have been over 10%!
If you hear HELOC you should hear loud bells and red flags waiving in your head. No no no! Don’t do that!
Thanks for the great advice Ramsey and your beautiful co-host!
It totally depends on specifics. I purchased our recent home with money from a HELOC and this worked out perfect for us. In our area near Seattle it takes a long time to find the right house that you were looking for and you have to be ready to act quick when you find what you want. Our mortgage on our first house was it very affordable. We were able to remodel our new house and then sell the previous. However we could have easily rented out our previous home. When we sold our previous house we took the profits and then recasted our loan on our new home they can get far more affordable. Maybe a higher risk tolerance then some would be willing but for us this strategy worked out great
How to make the decision on whether to sell my condo or rent it out and have that passive income??? I feel like its location is growing and growing and think it might be a good property to sell down the road for retirement, as long as the hoa dues dont skyrocket... any tips??? Please and thank you!!!!
I hear an ad for refinancing almost every hour on most radio stations.
Me too, they act as if it is "free money". Why would you risk your house, and how many times do you want to pay off your house? People are so dumb when it comes to finances.
@@ehderguyyashootadeerorno2313
It should be taught in all public schools in all schools
Banks are hungry.
@@mrlion2022 I agree. Most people wonder why they have no money and thousand dollar car payment or get to retirement with nothing saved but they always had a brand new boat. Most people do not have money because of their own decisions. What I’m shocked by is most people don’t put enough in 401k and the number one reason for 401k loans is to pay off debt (which they will do again) and number 2 reason for a 401k loan is to go on vacation.
@ehderguyyashootadeerorno2313
So true, I tell many of my loved ones something very similar.
What stand for HELOC?
Homeless is the intent of the real estate market making homes so expensive our children are out of luck with stupid interests rates. UP GOES THE HOMELESS RATE.
I wish people would understand that the layering on of restrictive zoning laws since the 1970s is the biggest driver of high housing costs.
Hey Dave
I’m a custom builder in Pa
A $70K renovation budget might get a new kitchen in my market
But that’s about it
lol. people who view their single family house as an ATM are setting themselves up for disaster
It’s a consequence of people viewing housing as an investment instead of a necessity
If they suck at remodeling and selling, but some people are very talented.
As with everything in life only so many people can become professionals or highly talented at this process,
Majority of soccer players suck,
we only watch about 1000 of them every day, and really only pay attention to 5 of them 😂
I'm 53. I've got friends who have paid off their houses and never borrowed another cent. I've got friends who have used their houses as an ATM. I can assure you that as people my age start staring down the barrel of retirement, retrenchment or redundancy... whichever comes first, those with nothing owing on their homes sleep a lot, lot more comfortably.
They might as well be renters.
Go in debt to build credit to go in more debit, round and round we go...
For the first gal, she can just put her home up for sale now. Once she goes pending on a new home she can do buyer possession and move into the house under contract "renting" it out until she sells her house. The seller gets their mortgage paid, the lady gets out of her house sooner. I use HELOC's all the time, but not for something like this.
I did that
"It would be stressful not to have somewhere to live...."
.
There are fully furnished, short-term rentals in most major cities. Pack up all your stuff in a POD, store it until your house sells, live in the fully furnished, short-term rental meanwhile, and then move at your leisure once the new house closes. Worst case scenario, you spend a couple thousand bucks in some short-term rentals. Cheap insurance to make sure you do this right.
Investors buying up single-family homes and renting them out is driving up rents and home prices, putting renters and would-be homebuyers at risk of becoming homeless.
And that’s how the cookie crumbles! Life’s not fair investors see opportunities not feelings
Nothing new.
Not building enough supply is driving up prices and rents
@joshuathompson6844 bro the only reason they can get away with this temporarily is due to them not building enough homes. When the homes are built major investors will leave that market.
That's not how that works.
What is wrong with an equity line to reroof. It runs about 25k to reroof the homes in my neighborhood. That is a lot of cash necessary to have on hand.