How does the Heloc get paid off?
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- เผยแพร่เมื่อ 1 ต.ค. 2024
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Curious about how to rapidly pay off a long-term mortgage? Our latest video demystifies the process and provides a clear, step-by-step guide to turning a 26-year mortgage into just 4.5 years. Join us as we explore various strategies for paying off your mortgage efficiently, whether you're looking to accelerate your payments or manage them within a comfortable timeframe.
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Most people don't make 10k a month. Average is 3-5k. Can you make a whiteboard example detailing how it would work
Most families make $10k easily though. I work a blue collar profession ( electrician) and make $75k after tax rough and my wife is in child care and makes $35 k. We could work more but have a family. It's still tight though. I don't know anyone making less than $50k that's over forty.
I do. Plenty.❤
Thanks for the visual, I finally get it! Thanks 1mil.
That was confusing as hell. 🤷🏾
Just wanted to say that I had to search you guys up, even though I'm subscribed TH-cam has been hiding your videos from me!
What is the most you recommend putting on a HELOC at a time? I know you use 20k often. Is there a rule of thumb for certain income levels or just keep using 20k of it at a time? How long is each 20k taking to pay off? Let's say you're paying down the 20k on the HELOC. Do you take it down to $0 and then make another 20k payment on your mortgage and begin the process all over again?
Great question! Generally, $20k is a common figure, but it really depends on your income, expenses, and comfort level. There's no strict rule of thumb-it's more about what fits your financial situation.
You don’t need to pay the HELOC down to $0 each time. The idea is to reduce the balance enough to manage your cash flow effectively, then make another large principal payment on your mortgage and repeat.
For more detailed strategies, check out this video: th-cam.com/video/Xi75OPeNwfI/w-d-xo.html. 🏠💰
I have a land contract. Paid 300,000 for the house 5 yrs. Ago. Worth upwards of 500,000 now. My bubble is about to be up and was wondering about how a heloc works in my scenario.
A HELOC could be a good option given the increase in your property's value. It allows you to leverage your home equity for paying off your land contract or other financial needs. For more specifics on how it can work in your scenario, check out this explainer video: th-cam.com/video/HIvm17hor1s/w-d-xo.html.
This strategy would also work using your own money instead of a HELOC right?
For example, if a person had 100k in savings and they wanted to use 20k of it for this strategy. They would just make a chunk payment and replenish the 20k in their account correct? And continue to do that until the loan is paid?
That is correct! We help set up tracking for these types of scenarios as well!
@@TheKwakBrothers you help set up tracking? 🤗 I bet you do. Anyone with a basic calculator can do the real math.
Which is better to pay interest or principal? Please educate me.
Paying down the principal is actually better because it helps reduce the total amount of interest you have to pay over time. When you pay extra towards the principal, you're essentially lowering the balance on which interest is calculated.
For example, if you put an extra $1,000 towards your mortgage principal, you'll pay less interest over the life of the loan. Our strategy helps manage this more efficiently even without extra money by leveraging a financial product. For more details, check out our free webinar: acceleratedbanking.com/free-virtual-class?sl=youtube
yes youre talking abouth the intrest on the 10 000 how is the actual Heloc paid> also will still need to make the house payment
When you deposit your paycheck into the HELOC, it reduces the balance on the HELOC, which in turn reduces the interest you pay. Essentially, the HELOC acts as both a tool to pay off your mortgage faster and an account to manage your cash flow. You’ll still make the regular house payment, but the method reduces overall interest and time on the mortgage. For a detailed explanation, check out this video: th-cam.com/video/HIvm17hor1s/w-d-xo.html.
Nice job, that helps me.
How often do you make those $20,000 principal payments towards the mortgage???
Great question! The timing of those principal payments depends on your cash flow. Essentially, once you've paid down the HELOC using your paycheck, you can then use it to make another principal payment. This cycle can be repeated as often as your cash flow allows. For a deeper dive into the strategy, check out this video: th-cam.com/video/Xi75OPeNwfI/w-d-xo.html
Step #1 have the cashflow, then it sure makes alot of sense.
Ok so hear me out, my wife isn't 100% on board like me....she wants like personal proof. My thought is to go apply for the heloc and use it to pay of remainder of our car not which isn't much, maybe 10k. Not a huge risk in my eyes, we don't have much of any consumer debt and I have plenty of credit cards which I pay off in full. Thoughts? I just want to give her a physical example to go off of before we go all in on the mortgage. Thoughts?
That’s a smart approach! Starting small with the car loan can give you and your wife a clearer picture of how the strategy works without feeling like you're taking on too much risk. This way, you can demonstrate the benefits of using the HELOC to pay off debt faster and more efficiently. For a detailed breakdown, check out this video: th-cam.com/video/HIvm17hor1s/w-d-xo.html.
I’m about to close on a new build house as a first time home buyer using a zero down VA loan, so no instant equity. Is it possible to get a HELOC right away to use this strategy? I was going to pay extra on the principal each month to pay off the mortage in 10 yrs but would like to explore the accelerated banking strategy.
Since you're using a zero down VA loan, getting a HELOC right away might be challenging due to the lack of instant equity. However, paying extra on the principal each month is still beneficial. Our strategy focuses on optimizing cash flow to accelerate payoff, so it can still be valuable to explore. Check out this explainer video for more details: th-cam.com/video/HIvm17hor1s/w-d-xo.html.
Just to make sure i understand correctly, im also paying my monthly mortgage payment out of the HELOC after dump my paycheck into it every month?
Yes, exactly! You’ll use your HELOC to pay your monthly mortgage payment after depositing your paycheck into it. This reduces the HELOC balance and consequently the interest you pay, while still maintaining funds for your mortgage. For a detailed breakdown, you can watch our free webinar here: acceleratedbanking.com/webinar-registration-515174331635781964831sl=youtube
Thing is it still ends as the same once the next month comes over UNLESS you put extra into the HELOC and if people have used their entire funds at the begining at some point it has to come out so one cancels the other so you still have to put an extra payment into the HELOC
I see your point. The key is to use the HELOC strategically. By depositing your paycheck into the HELOC every month, you're reducing its balance and interest. Over time, this can save you money in interest and shorten your overall payoff period. For a detailed breakdown, our free webinar explains it really well: acceleratedbanking.com/free-virtual-class?sl=youtube
How could ppl not understand
If I have multiple investment properties can I use this methodology to implement the 3 properties at the same time adding the rental income to increase the monthly income.
Yes! But you have to do one property at a time
What about Capital Gains when you go to sell your property? Single filers -first $250k tax free, Married filing jointly-first $500k tax free. ANYTHING over these figures gets taxed at? 25% or more?
Example. House is worth $1.1mil. Owe $200k. Leaves $900k in profit when sold. Single filer owes 25%+ = $162.5k in taxes. Married filing jointly = $100k in taxes. Seems in this/my scenario I SHOULDN’T pay off my $200k mortgage? No one I’ve watched talk about Velocity Banking has addressed Capital Gains. Your response is appreciated. Am I missing something? Thanks.
Paying off your mortgage has nothing to do with capital gains. Capital gains ONLY apply to appreciation beyond your purchase price. Also, the $250k/$500k tax exemption applies to the first $250k of profit as a single filer or the first $500k of profit. So if you bought a home for $900k and sold it for $1.1m... the capital gain is $200k. So in this scenario, you are not paying capita gains. So no - mortgage and what you owe has nothing to do with capital gains.
@@TheKwakBrothersYou misunderstood. When you go to sell your paid off home understanding Capital gains is huge. IMO.
I have $900k in equity. Paid $300k for house. Owe $200k. I didn’t know CG is based on purchase price. House worth $1.1m today. Been in same house over 20 years.
So, using purchase price of $300k and $1.1m house is worth today that leaves me with $800k taxable. By filing jointly I get the first $500k tax free. This leaves me with $300k CG taxable. At 25% I would be paying $75k in CG taxes. IF I pay the remaining $200k off I walk away with $1.1m, $500k tax free, $600k taxable. At 25% I will owe $150k in taxes. If I leave the $200k on my mortgage do I only pay CG on $800k minus $500k leaving me with $300k taxable or $75k in CG owed?Just trying to wrap my mind around this, selling home soon. Thanks for your help.
Again, the mortgage has nothing to do with capital gains. Since you bought your home at $300k and if you choose to sell, you are correct in saying that you have a capital gain of $800k. If you're married, then yes - the first $500k of the profit is not taxable. But the remaining $300k of profit would be taxable. I highly recommend that you speak with a CPA or a qualified tax professional to get the details of your tax consequences.
You can make payments straight to principal, pay it off just as fast, and at less total expense. Most VB advocates also fail to show the total cost of obtaining a HELOC.
I understand your concern. While traditional principal payments work, using a HELOC maximizes cash flow and offers flexibility. This approach can accelerate mortgage payoff even with higher interest rates. The savings come from how funds are managed daily. For more clarity, check out our free webinar: acceleratedbanking.com/webinar-registration-515174331635781964831sl=youtube
@@TheKwakBrothers that’s BS. A heloc places your house at further risk, costs more, and a person is very likely to overspend on expenses, which results in even more interest by it decreasing the heloc balance. Getting on a budget and paying extra cash flow to debt is just as fast or faster and cost less. One thing VB advocates never talk about is the cost of getting a heloc either. Chunking towards a low interest mortgage with a higher interest loc or heloc is not faster or cheaper.
@@DebtfreeMike Friend, sounds like whatever evidence and/or proof of VB won't likely satisfy you as you're not looking for it - nor do you want to. I think you're here to be told that "You're Right". That said, You are right, Mike! You can certainly pay off a mortgage faster and save money by doing what you said. VB is not for everyone. But for those who are looking for an alternative niche way... it can certainly give them peace of mind and confidence. Be blessed!
Oh and btw, applying and getting a HELOC is virtually free. Application fees are no more than $100 ~ $150. Almost always free. Anything more than that for a 2nd lien HELOC is probably being brokered through a fintech company ;)
@@TheKwakBrothersappraisal fees and funding fees are still pretty common and well as referral fees to people like you recommending people put their house at risk. Just be honest man.
I never felt so slow lol.. My monthly bills go on a credit card, but when are we supposed to pay those ?
No worries, it's a lot to take in! Typically, you’d pay off your credit card in full each month to avoid interest charges. With our strategy, we use cash flow effectively to manage both your mortgage and credit card payments. Check out our explainer video for a deeper dive: th-cam.com/video/HIvm17hor1s/w-d-xo.html.
@@TheKwakBrothers I finally got it after 4 hours of rewatching videos lol
I have an interest only heloc right now that I’m trying to pay off, when I deposit my whole income into the heloc as a payment on the first day of the billing cycle, will I still need to pay for the interest since my due date is different from when I made the payment
When you deposit your income into your interest-only HELOC at the start of the billing cycle, it directly reduces the balance, lowering the interest charged. Even though your due date is different, the lower balance from the deposit means less interest accrues. This use of timing can help manage and reduce your interest costs effectively.
For more details, you might want to watch this video: th-cam.com/video/UWwqDaIYeR8/w-d-xo.html.
@@TheKwakBrothers thank you for your reply! I have another question, since I won’t be putting aside for savings would you recommend taking out more out of the HELOC for say…unexpected expense? Like new tires or new appliance?
Thank you!
Would this work well in New Zealand and Australia?
Yes - you guys have something called an offset mortgage that's literally designed for this
Thank you so much, you and your brother do an amazing job.
Best bank to get a PLOC?
Finding the best bank for a Personal Line of Credit (PLOC) can depend on your personal financial situation and what each bank offers. Part of our program helps you identify the right banking partner for this purpose. To get more detailed guidance, consider joining our webinar where we dive deeper into selecting the right banking products: acceleratedbanking.com/webinar-registration-515174331635781964831sl=.
I have been defrauded by heloc THRU FIGURE lending by overly inflating my property value and paid expensive origination fee then 3 months later suspended my heloc citing my property was significantly had declined in value.
When I applied for a heloc loan on my residential property last May 2024 it was overly inflated up to $ 420,000 for a townhouse and was able to take a $200,000 line of credit causing me to pay an origination fee of $5,700 on which I paid after they deposited the lump sum money to my bank. I paid them back only taking $21,000 to pay my personal loan and credit cards balance.
Three months later which is August of 2024 when I requested for another draw of $17,000 they suspended my heloc for the reason that the property value had significantly declined to $ 276 210. I felt devastated and distraught thinking that I had been scammed. They made a misrepresentation on the application for their gains.
I'm not very knowledgeable regarding heloc and was not properly told/explained that once approved the whole amount will goes to your bank. I was not asking for a $ 200,000 loan. When I applied for Heloc at Figure lending took me 5 minutes processing including checking my bank account,they did their appraisal thru artificial intelligence and got the property value of $420,000 that's why they give me a loan of $ 200,000 to access. I checked their property appraisal recently and found out that they did the wrong address and made me felt like it's all fraud.
The issue and my complaint was
- there is no significant decline of property value.
The correct value of my property should be on the upper $ 200,000 like to 270,000- 280,000
I owed 197,000 was expecting for a heloc of $ 20,000 or 25,000 at least.
I know for a fact that my property was never appraised to more than $300,000
In conclusion if they have appraised it properly there should be no decline of property value and I should not be paying a HIGH ORIGINATION FEE of $5,700.
Need help on what to do. I need to get some of my money back.
Please BEWARE!!!!
I'm really sorry to hear about your experience with the HELOC. Unfortunately, I'm not able to provide specific advice regarding your situation. However, if you're interested in learning about effective financial strategies to manage your mortgage and reduce debt, consider joining our free webinar: acceleratedbanking.com/free-virtual-class?sl=youtube. It might offer some helpful insights. Best of luck!