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Cash Out Refinance vs Equity Share | Which Is Better For Homeowners?
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- เผยแพร่เมื่อ 18 ส.ค. 2024
- So you want to access the equity you’ve built on your home while keeping the favorable rate you locked in last year. There are plenty of options for you to access your equity and keep your rate, but I’ve seen one company in particular acting as a wolf in sheep’s clothing. Home IPO is advertising equity shares all over social media, and I’m here to dish out the truth behind how these companies operate. In today’s video, I’ll shed some light on how companies like Home IPO take advantage of borrowers and why you should be wary of equity shares. I’ll also share some safe options for you to access your equity-like a cash-out refinance and a home equity line of credit-without losing your rate and the value on your real estate as it appreciates.
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Timestamps:
Intro (0:00)
Watch Out for these Predatory Loan Companies (0:38)
What is an Equity Share Agreement? (2:19)
Diving into Home IPO’s Rate Calculator (3:01)
Safe Options to Access Your Equity (6:10)
Expanding on How Much Equity Home IPO Claims (8:02)
Questions? Get in Touch (11:14)
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What is a person to do when they cant qualify for a heloc or home equity loan? Has 300k+ in equity. Has reached a hardship and is paying bills using credit cards in turn lowering their fico score. How else is that person able to access some equity? They don't wanna refi into a higher rate that they probably won't qualify for anyway and attempting to do so kills their credit even more. ??? What options do we have?
@scotttheman My sentiments exactly, the banks need to counter these agreements with a loan product that will work for anyone, even if it will pay-off debt only and give homeowners the chance to get back to normal. We are still post covid and the rules of yesterday need to change.
Same situation here. We're both 59, wanting to retire, loads of debt, hanging on 655 score, 490k home value, 20y into mortgage, offered 75k
I'm in the same boat and the sharks are circling at the courthouse. So this did sound like a good option to make all this go away, but I'm not so sure at this point what to do. Allow the sharks to get judgments against the property, they will take the equity anyway. Just Hopeless.
Have you thought of a reverse mortgage?
Roommates or short term nursing rentals for a couple of years and you can pay it that way
This video helped me IMMENSELY. I am trying to find the best option to buy my husband out but I don't want to loose my 4% rate. I considered this option until I watched your video. Thank you!!
You’re welcome! Hopefully you can find an equity line or something else to get him bought out
They are Real Predators!!! Thank you for analyzing the sample you showed us. I clearly understood this company's scheme. Thank you.
My pleasure!
Omg. I had No Idea this was happening, I have a nice size of Equity in my property ( Multi Family ), after watching your video, I will be more cautious. Thank You.
Right On! Matt Thank you for sharing this video.
People are looking for a quick fix and don’t think thru what they are doing when it comes to pulling money out of their property. You can be assured a bank is looking out for their best interest. Not yours. Unfortunately, many people can easily be mislead, especially when they have their eyes on what they can do with the borrowed money. (Home improvements, motorhome, vacations and the like) This is as bad an idea or worse than a reverse mortgage.
You are exactly right. People want a quick fix and can be financially gullible.
Okay so question what’s the difference in this and getting a regular home equity at a 10.5%. Just to give you figures let’s say you take $60k out for 15 years at a 10.5% that’s a total repayment amount of $119,383.20 minus the original $60k. The bank makes a profit of $59,383.20. You end up paying almost double essentially.
Thats exactly what I was thinking
this is a fact. Hes not looking at apples to apples. Do a side by side comparision of what they would pay with a second loan versus this option or others like it
Great observation! Why no response to a great question? Please answer this great thought!
Just did some research on these and came across your vid, thanks for the heads up. 👍🏾
Glad I could help
Matt, what's the best way to access equity in a home with a credit score ranging 600 to 630?
Depends on a number of factors. What is current mortgage look like? How much equity are you looking to access and why? With that score not tons of options but you’d want to talk it through with a good mortgage advisor. Start here: greatmortgagebroker.com
This a hard money loan that will eventually be very painful. Not a loan but when its all said in done it comes to the same painful results. Don't hurt me now! Hurt me later!
Thanks for your insight Matt. 👍
Thanks for watching!
Matt, I found your video very interesting, but I think that you may have missed a fairly major factor. Your are ignoring the work you can do with the money that would be required to be paid back as monthly payments. In your example, you were offered $61000. if you were to have taken a home equity loan over 10 years at an 8% interest rate your payments would be about $740 per month. in your example the appreciation occurred over 3 years. 3 yrs of $ 740 is about $27k. It I use that $ 27k to pay off credit cards I will be better off by about $40k based on the reduction in overall interest. As a result I do not think the fee that they Charged was as outrageous as you made it sound. I think that you are likely way smarter then I am on this matter so I would be grateful if you could tell me what I have got wrong. i
I thought there were laws against usuary.
Thinking about selling to buold on another property. But this might be better i coild get cash build the new place and start renting this place and if the market ever crashes i could sell then basically getting the loan for free.
nothing is free. "if the market ever crashes" is a bad bet. Going back to 1944 there is only ONE year where you can buy and hold for 10 years with negative appreciation (2006 for anyone curious)
Because of the leverage and the starting point, it only makes sense if you expect values to be near flat or down. Does it say what happens if values drop? Say the value actually went down to 472, do you just need to pay them the 60 and you got free money? (would be better just selling in that instance, I think).
I was wondering what happened in that same case. What happens in this scenario if your home value drops?
@@ws2940they probably penalize you for that and you still pay the difference somehow
Hi Matt, I would love it if you could do a segment about reverse mortgages. Or have you done one already? I have friends who are dealing with their mom’s reverse mortgage. I’m concerned that when she passes, they will loose the house. I wish we knew more about how to get out of these and why people should avoid them.
I don’t think they are all bad. I’ll try and get a reverse expert on my livestream
I don't have kids so for someone like me a reverse mortgage at a later date will work for me as I get older. Think it depends on your situation for sure
Thank you for the video Matt. Yeah I'm wondering in what scenario that this sort of loan would make sense. The only way I can see if that if you are dead flat broke. Have nowhere else to go for money and this looks quick and easy. I'm guessing faster than getting a HELOC? But yeah they definitely are going to want their pound of flesh for this sort of loan.
Which is worse? Bankruptcy or one of these creepy loans?
Probably one of these loans. In BK your home and home equity is protected.
I think Matt is narrow minded. There are no other options for folks who doesnt meet the banks criteria but maybe this makes sense. I have 400000 equity in my home but im a small, small business owner and banks wont do anything because of my DTI. I have zero 30 day lates. Excellent payment history on all my debt. Etc. I would love to take my.equity and buy a small investment property.
Call me wherever you want. I’ve sat on the phone with buyers crying to me after they realize these “equity share” companies have stripped hundreds of thousands of equity from them ..,
I’m not a fan and will do what I can to protect consumers
Thank You!
You're welcome!
I am about to make this agreement with unlock YOLO
Careful please!
@@MattTheMortgageGuy unlock ended up dropping the agreement because my home is an A-frame.
@@joecomstock3936 you lucked out! Don’t give up your equity!
You YOLO'd your way out of a bad deal . Someone is out there looking out for you ❤
Is selling equity a taxable event?
Not in this case. It’s not technically sold.
how old are these companies? Has anyone had to sell because they reached the 30 years?
I agree with your overall assessment of these types of loans but what do you do if you find yourself in a situation like me where I have a complicated medical issue that is keeping me from working and so I don't qualify for HELOC, Home Equity Loan, or even a Cash Out Refinance. I've seen dozens of doctors about my condition, even had a major surgery which didn't fix the problem and been out of work for almost 3 years now. I've used up almost all of my savings (mortgage payments, bills, living expenses, medical bills, etc) and close to being completely out of cash and living on credit cards. The only assets I have are my gun collection (which I'm in the process of liquidating) and the equity in my home (about $250K). So what am I supposed to do? I only have bad options to choose from including one of these terrible agreements until my medical situation gets resolved or I get approved for disability.
Reverse mortgage?
@@sassygrace9762
You still need income to qualify
Matt, Do any refi lenders do drive-by appraisals vs. full interior appraisals currently? I'm looking for a cash out refi (great credit and LTV) but I don't want an interior appraisal
Conventional lenders will do a full appraisal. Drive by or AVM more common with HELOC or equity share type products
What if you never sell your house?? Can they force you to sell after so many years ??
HomeTap says 10 years. I was wondering what happens if they go out of business before your 10 years.. then what? Liens and bankruptcy courts would be a nightmare if they had a lien on your home
If these equity share companies calm down with the equity percentage gouging and undervaluation of the property, it would be an excellent solution! Otherwise, people with bad credit and plenty of home equity don’t have any other options. Frustrating
Matt, any suggestions for fighting a predatory loan company? something with teeth? CFPB is useless.
try and find a real estate attorney
Hi Matt!!
I already have a heloc, but I used alll the money already ,to pay for expensive credit cards etc.
Looks like I dont have other option, since I dont make much money to pay for any other loans.
I have 600k equity in my house, they offer me 130k. That I will use for paying my heloc (70k), plus other loan (25k).
Paying for those 2 loans my whole monthly payments are going to be reduced from 5k to 3k.
I am 63, already retired living with 5k a month.
So I am rich equity, but poor cash.
Any ideas?
Reverse mortgage?
Why don't you call banks pedatory for charging 24%+ on credit card debts ? Are you a lobbying for bank because you are paid by the banks ?
1. Not paid by the banks
2. Agree that credit cards are terrible
Cheers!
Hi. Iam planing to take cash out ,, is this good idea right now.?? I brought my home 250k last year ,,Down pay 3%,,Now home value around 400k. How much money I can take out ?? Thanks
the better question is WHY do you need cash out? To run some scenarios and get good advice go to www.greatmortgagebroker.com/
I'm thinking of doing this to build on another property I own in turn making. This home a rental in wich the renters will pay off the mortgage and if they do 30 years I'll be dead when it sells anyway and my kids will get whatever left currently own 4 properties with a mortgage on 1.
Such a scam! Thanks for sharing Matt.
I'm here for the people!
Folks work hard to reach ownership status, then give it away. I can’t understand it.
I was curious about HomeTap for my roof, AC and water heater that all need to be done now. I was hoping not to dip into my cash yet since I have equity too, but watching videos on it to see if they screw you when it comes to liens or the money you end up owing them
I am semi retired and living off money I already have so trying to be creative .. thinking maybe put it on O% no interest for 18 months and use cash from my interest earnings towards the minimums the credit cards want that count towards the principal and fees..
Not sure what else to do .. since I have no job can't go for a loan or equity line either