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- เผยแพร่เมื่อ 17 ม.ค. 2012
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A home equity loan is simply where you're taking a second mortgage against your house. So, I know that might sound a little confusing, but let me give you an example.
Let's say my house is worth $300,000, and I have a mortgage on it, and I owe $200,000 on that mortgage. So, that means there's $100,000 of equity there in that property. And one of the challenges, sometime, is you pay your mortgage down, you might want to use that equity or some of that value, for other financial goals you're looking to achieve. So, how do you do that?
The way you do that, is by taking out a home equity loan against the property. And most home equity loans might be a 10 or 20 year loan, and you're borrowing the money. And typically you're gonna pay a little higher interest rate than you would on your regular mortgage, because, technically, if you don't make your payments, the bank that holds the first mortgage has the first right to your collateral. And the lender for the second mortgage, or the home equity loan, would be next in line. So because of that, there's a little bit more risk, and you'll often be assessed a little bit more interest, because of that risk.
Now, there are two main types of home equity loans. There's a set loan, a home equity loan where I borrow a certain amount. Let's say, I borrow $20,000. I pay interest on it, and every month I make my monthly payment. So, I know exactly when I'll be done, and I know exactly what my monthly payment will be. That's known in the industry as a home equity loan.
Another type of home equity, is what's called a home equity line of credit. This is where you have access to money, but you're only gonna pay interest, if you actually use it. So, it works very similar to a credit card where, if I'm not using the money, I'm typically not paying interest. But once I use it, then there's a balance, and a monthly payment associated with it.
So, really important, a lot of times people take credit card debt, or other types of debt, and they want to consolidate it onto a home equity loan. And the reason they want to do that is, number one, to simplify their financial life. Number two, home equity loans usually have a lower interest rate, than credit cards, for example. And number three, sometimes the interest on a home equity loan is tax deductible. So, those are all good benefits.
But if you do this, be aware that once you do that, you're home is now at risk. In other words, if I can't make my credit card payments, the lender can't come take my house. But if I can't make my home equity loan payments, my house now is at risk. So, that's a big difference.
Number two, most home equity loans take a lot of time. They're 10, 20 year loans. And, like we were talking about, if you stretch out debt, often times you may pay more over the long term, even though your monthly payment may go down.
And lastly, when consolidating debt onto a home equity loan, be aware that you're not moving debt around versus paying it off. Because I see a lot of people, they move credit card debt to their home equity loan, and then in a few years, what happens? The credit card debt starts coming back, and they owe money on the home equity. So, they have more debt. They're addressing some of the symptoms, and not the cause.
So, home equity loans can be a great way to give you access to money and equity that's tied up in your property. But just make sure you don't fall into any of those problem areas, because I see that happen a lot. And people underestimate the risk that they incur. - แนวปฏิบัติและการใช้ชีวิต
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Every TH-camr is saying how to use equity to buy another investment property but nobody is mentioning a little detail about pulling the equity of the primary property, will double the monthly payment. In my case from $3,000 to almost $6,000 how am I going to afford that?
I remember in 2007 when I was working in real estate seeing people buy homes new from builders with the intention of selling before close of escrow to a new buyer for profit. The crash was so brutal and fast that I remember seeing a lot of these units foreclosed on with the builder plastic still on the carpet.
The enduring US stock market bull run evokes a mix of fear and excitement, presenting opportunities with insight, resulting in $780k gains in the past nine months, utilizing a portfolio advisor for a well-defined strategy.
How can I reach out to one? my assets have been struggling since 2022 and I’ve been holding on by the skin of my teeth.
Don't be reluctant to contact Sonya Lee Mitchell and follow her directions.
Just ran an online search on her name and came across her websiite; pretty well educated. thank you for sharing.
Great info! This is my fav kind of youtube video because its simple, short and to the point! 👌🏾👌🏾
Excellent summary! 🙏🏼🙏🏼🙏🏼
You explained this very well. Thank you.
Really great advice.
Useful information
Great help!
Thank you for the information that I was so confused about wow you are a amazing teacher thanks you hit it right in the nose.👍
Good info!
THAT WAS SOO GOOD THANK YOU
Great vid
Thanks you so much big help
You only apply for home equity loan if you don't owe much in your current home mortgage, say already paid 70% of your current principal mortgage, then it's alright to apply for home equity loan, otherwise it very risky.
great video
why does this sound like a bad idea....
Mannn
such a foolish situation to get involved with... guys dont get into debt
Because it is!
Because it is
Thank you!
@Howcast is your equity on the appraised value of your home or how much you paid for it initially?
great
Cancel those credit cards after the home equity loan.. you don't need them!
Never use a home equity load to pay of unsecured debt. That's like jumping out of the pot into the fire. Best to file bankruptcy chapter 7..Then you can still keep your house and all your credit card debit is gone. Its a mark on your credit score but thats fine. It will recover in a few years and you will still have lovely family home to live in.
I almost feel like it would be better to do a cash-out refinance on a new 20 or 30yr mortgage and just pay closing costs to get the money out without strings attached.
Understanding Finance and Money In the US are harder than getting my PhD. 😅
May I ask which investments are good? I've been looking at a few different ones but want others' opinions as well
can you do Equity Loan on houses with no mortgages & use the Equity from 1 or more house to buy living home and use renters to pay of the loan
Like a reverse mortgage? Kinda. I mean you plan to pay it back
@@dormantmenace You ow nonething you basically sold the home.
Why Escrow keep going up?
Wow!
Would it be wise to get a loan to pay for a certification class? It’s for cyber security and the whole program costs 15k. Can’t pay out of pocket 😭
15k for certification? No!. You could get a college degree for that kind of money
can banks ask for the loan back? let's it was 20 year loan and now bank said pay all that but next month? I am confused was listening to Dave Ramsey
No they cannot. Lenders can sell or transfer the rights to your mortgage to other institutions but the term cannot change. A loan is a loan and the FDIC protects this. Your interest rate, payments, type of loan (fixed rate/ARM) will all stay the same. However, if you have a balloon payment mortgage then you will satisfy your loan with one large payment at the end of the term. This is agreed upon beforehand as it is different from a basic mortgage loan and usually used more for commercial loans to keep payments and interest lower throughout the term. A balloon payment is not something the bank can just thrust upon you wiithout both parties agreeing on a loan modification. Usually you will be given a 3 month trial period on a modification to ensure that you can satisfy the new terms and conditions. Also, don't believe everything Dave Ramsey says. He is a good motivator when it comes to helping debt-stricken people pull themselves out of debt, but you don't have to be debt free to make money. You just need to be smart about it and have self discipline and a plan. If I remember correctly, I'm pretty sure Ramsey had a multi-million dollar margin call on his portfolio. So it would seem to me that the structure of the debt and his willingness to take it on in that capacity was the problem. Hope that helps. Cheers.
Don’t understand. You borrowed $200,000 and you paid the downpayment down for $100,000??? And then you get another loan for $100,000???? Is that what he was saying at the top?
goldensleeves Basically they giving you back the money you’ve put into the house and then charge more interest on top of the interest you’re already paying
In the example you borrowed 300,000 for the house
you've spent years paying down the 300,000 mortgage to 200,000 so that means there's 100,000 worth of equity in the situation that you can borrow
SECOND, OWNED TROLLS!
first
blink please