Home Equity Line of Credit - Dave Ramsey Rant
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Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.
People believe their currency has the worth it does because they have no other option. Even in a hyperinflationary environment, individuals must continue to use their hyperinflationary currency since they likely have minimal access to other currencies or gold/silver coins.
Inflation is gradually going to become part of us and due to that fact any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire.
I've tried investing in the stock market several times but always got discouraged by fluctuations of stock value. I would be happy if you could advise me based on how you went about yours, as I am ready to go the passive income path.!!
My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Just ran an online search on her name and came across her websiite; pretty well educated. thank you for sharing.
I applied for a home equity loan and what Dave describes is exactly what I got in the terms. Can't believe people fall for this. Seriously the bank can change the terms any time they want to any rate they want. I got scared and backed out. Thank goodness!
That's why you ask for a fixed rate
Dave is intentionally misleading people here. A heloc and a home equity loan are not the same thing. A heloc can be called dur by the bank, but if you're doing it right, you only have one to two months of mortgage payments due at any given time. Look up credit card float. Think of the heloc as a credit card.
inXS How can I use the equity of my house that is already paid off?
Get a fixed rate.
You asked for a fixed rate. 😊
I did a home equity loan built my mechanic shop tripled my income from 33 to 100k after expenses went from a dealership to owning my own shop paid it off in 3 years so sometimes you can make money with a heloc
Any advice or everything went smoothly for you with repaying?
@@jgirl4life07 marketing you tell everyone ooh know you do mechanic work and every business you buy fast food just to give out ur business card
You’re lucky! If things had gone the least bit sideways, you would have lost your business and your home. Thank goodness it worked for you this time, but be careful recommending this.
@@jonnygunn6259 lucky not so much I work a lot now if I got disabled then yeah it wouldn’t be any fun but I had no other debts besides my home my wife could cover the payments if I got disabled and if I died she be rich got big life policies
Congrats! 👏 That's wicked smart.
"Stupid looks smart when times are good." True!
I work at a bank and have seen multiple people use home equity to use as money down on new rental property investments and make a ton of money. As long as you are using it to make money I see no problem.
I'm using it now to build a house. as long as u get a fixed rate you good. I guess im.dumber then a rock lol
They did a video about the brrrr method and laughed like no one is rich off it. Lol keeping the sheep in their herd I guess
@@johnnycalderon9951 you can’t get a fixed rate for a heloc. Do you mean fixed rate for the new home you’re building?
@@ash86marie yes you can. There are fixed rate helocs and they are very often below standard mortgage rates
@Small People you may be referring to a “heloan”.
2018: this is the time to sell
Me in 2021: hahahahahahahaha
EXACTLY!
Difference is now you can't find a house once you sell yours lol.
@@TonyNguyenFR so take out a Home Equity and buy a 2nd, keep it rented and real the equity from both properties.
Da impending house crash of 21
@@TonyNguyenFR 🤣
“Now you’ve financed a freakin’ steak over 30 years.!” 😂😂
This right here took me out 😂😂😂🤣🤣🤣
I am old enough to remember my grandparents warning me to never ever pay unsecured debt with secured debt. They rode out the great depression and barely was able to keep the farm. If they had borrowed against it they would have lost it. Loans for seed, fuel, etc for the growing season was all unsecured debt. Paying that with equity would have lost the farm when times became tough. This lesson was well learned. The sales pitch is strong to roll a 17% loan into a 3% loan, but don't do it. The reason the one loan is 17% is because it is an unsecured loan. Ensure you can keep the very basics for life during hard times. 1 HOUSING. Never borrow against it. 2 FOOD. Never bet the farm. 3 INCOME. Never put your income in jeopardy. Many local farmers lost their farms to mega farms. This is how family farms get lost in hard times. They get bought for pennies on the dollar from the banks and creditors that had a secured interest in the property.
I appreciate the lesson and the way you explained it!
This is a great lesson and how fortunate you are to have grandparents that instilled a lifelong wisdom
Get life insurance policy will cover the equity loan
💕💕💕🌴Thank you
No Dave. No 7th grade Econ class. That’s why I’m sitting here listening to you.
Got a 30 year mortgage in '99, refi'ed to a 15 year loan in 2005, and paid the home off in 2018. No 2nd mortgage, no HELOC, no reverse mortgage, !!!
I like this idea. Do you have to get a certain kind of HELOC?
@@robertarogers998
If you want to cut the length of your mortgage, timewise, or the effective interest your mortgage is at, and the amount of interest you have to pay over the course of your homeloan duration, JUST DO THIS: Pay your monthly payment with some additional that is directed just to the principal. Now, if you can refi to 15 from 30 and get a significant interest rate reduction simultaneously, that can save you more than the cost of refi, then do it. If you can't save enough from rate reduction to justify it, then just keep on with your additional payments to principal.
My 30 year loan was at 7% and dropped to 5.5% when I refi'ed. That was worth my doing it. Had there been little or no rate reduction, it would have been impractical to refi and I would have just continued to throw extra money at principal. Hope that is clear.
@@1redrubberball My interest rate is 2.63% I close tomorrow it's on a 30 year. is that good? I'm 23 and kind of wish I had more guidance through this process. I rushed it a bit but I love the place I'm going to have. I plan to refi as soon as I can to a 15 but I don't know if it's a good idea at this rate.
@@jacobjohnson9030 Sounds like you are on a good path and that interest rate is very good as well. I was around 51 before I could afford a house, but better late than never. At that interest rate, I wouldn't worry too much about a 15 yr mortgage right now. With the dismal economic forecast we all seem to be facing, just getting thru the next yr or two may prove challenging. If your circumstances allow you to, you can actually pay a little more to the principal each month going forward and shave years off your 30 yr mortgage. That will also reduce the yield on the mortgage to the holder to below that already low rate. Even $100 mo more to principle for several yrs has an amazing effect on how many yrs it can shave off the mortgage term. Good luck!
That’s because u were able to pay a bigger monthly payment to pay it off , Some people like to spread it out pay less now on the mortgage and use the saving to reinvest in purchasing other properties or other necessities - what was your nterest rate and the monthly payment on the 30 year and what was the interest rate and monthly payment on your 15 year refinance ?
Every single multi-millionaire/ billionaire who invests primarily in real estate borrows money against the equity against said real estate. It's tax free.
Losing it all is also tax free.
"I want a new kitchen, princess...shut up!" 😂😂😂
Lol
This is the exact reason why I'm considering it. After this video definitely not!
😂😂😂
Thank you so much for this video! I really appreciate, I was referred by Ted, he helped me throughout the whole process with no extra cost. This is my referral as promised
mx076 on wickr or telegram.
🤣🤣🤣🤣
My dad made multiple millions using home equity loan to buy houses in 2010...pretty smart move if you ask me
My thoughts exactly. They don't tell you that part
We aren't into the millions but did the same thing. Bought cash, pulled money out, bought more cash. Scaled up quickly, paid down aggressively. Everyone needs multiple tools in their toolbox. Not everyone can live with their parents and never buy anything so they can save 150k to buy a house, gotta take a deep dive and get creative.
I took out a home equity loan. I am retired and not able to work. The loan was enough to maintain my home (windows, door, storm doors, countertops (laminate), and various other projects. I am paying off the loan and feel I made a good decision to keep my property value high. I would like to mention that the loan is one fourth of the value of the house. With no prepayment penalty, I can pay back this loan in 5 years. Budgeting and cutting unnecessary expenses also helped. If I should need a loan again I would only consider a personal line of credit for a short term. There are other alternatives to consider.
Never buy on the high. I did it, regret it, lost everything - lesson learned
This 👍👍
Except you don’t know when the market is at the top...until you know. It’s always a risk.
Did you buy in 2007-2008?
In 2007, right out of college a coworker, who also did loans, said she can get me into a house with zero down. Im like HOW? I make 45k a year.......a few years later we know how.
Mark...me too in 08-10
@@jakevillaret Yeah. I bought while it had gone up quite a bit and was still going up...that's what I mean by "on the high';
What goes up must come down...and down it came. Bought a house in 2006-2007. 2008 Recession hit and I lost my job, my house, unemployed (apart from some odd jobs) for 4years...
For now I will save...if the market tanks again, THEN I will buy, if I can
I got a credit line of 60,000 and the monthly payment was around 295..I used the money to built a guest room and i rented it aut for 875 and the money from the rent was used to pay the credit line debt..now its paid off
....good moved....
As Dave has said before. My grandmother is 90 and smokes like a chimney. Does that mean smoking isn't going to kill me early? You had a good plan. Im in the building industry myself. But a better plan wouldve been to have planned and saved for the build. But anyways nicely done!
Yea it's easy for him to throw out heloc is bad he is sitting on millions.
Awesome 👍😂
How long are the terms on that credit line
At least you didn't buy a motor home or new car with the money.
My Dad bought a $300K house in 1993 here in San Jose. It's worth $1.6 Million now and because he took out so many Home Equity Loans, he lost the House and has nothing to show for it. I will never borrow against my house.
Lol. Loser. Make horrible decisions, expect to reap the consequences 😮
I love Dave and his advice but I semi disagree with this post. I work at a bank and all of our Home equity products are tied to prime with an adjuster (that is set, not variable) or the five year treasury. We cannot just change rates because we want to. I do agree though people use the equity in their homes for stupid stuff. I think if you don’t use it to increase the value of your home then don’t use it.
Thanks for the insight! I personally have a HELOC and use it ONLY for investments. The investments ideally should cover the HELOC plus more.
Or have another plan to return that money after investing?🤷♂️
There is also a difference between a Heloc and a home equity loan. The layer is fixed interest with fixed payments.
can I use the Heloc to buy my primary residence ! Do u think that is a good move instead of getting a regular mortgage!
If you sell your house in this white hot market and make some money, don't you have to go find another place to live? If I had more than one house then yes I would sell one and make some money. But I only have one...
Patrick Bateman rent until the market crashes or you can find a deal
Cass on point 👍🏽
Ok well im "thinking" of selling my house... Now what? I don't have another one.
Patrick Bateman you should rent until market goes down again... if you listen to Dave Ramsey regularly you would understand why renting is not always bad in a situation like this... when it makes sense to buy again you buy again... usually people aren’t thinking of selling their house for no reason... usually is because they just want something different or thinking of a new job somewhere else but just thinking of selling for no reason is not what he means
Hey Pat, find a "fixer upper" ...then pocket the extra cash. You'll also end up with more equity in the new property if you do this.
Thank you for advice. I was considering a partial home equity loan for siding, windows and gutters. But I only have 5 years left and I will be debt free at 53 or 54. I guess I'll find a better way.
uber? cleaning dishes somewhere? part-time job? taking care of someone's dog or kid?
For a split second I though he was gonna drop the f bomb then said flip 😂
I did too. 😂
It is really the same thing. It is a replacement word. Just like freaking.
Same. But it's really the same intent behind it. This isn't the same Dave Ramsey from financial peace University
🤣🤣🤣🤣🤣me too
We all know what he's thinking when he said it anyway.
Has anyone noticed that his impersonations sound like Clevand from Family Guy?
He does. 😂
Until I saw the upload date for this video I almost thought it was made in 2009. The remedy for Dave's entire rant is to shop around. There are, in fact, banks that will give you a HELOC or home equity loan with $0 closing costs, no call options, and fixed interest rates that are set by the 10 year treasury bonds. If you borrow equity from your house to fund a cash flowing investment property, the only downside to that is you can't deduct the interest on your tax return. However, this downside is usually offset by the depreciation deduction so it is minimal. The fact is that although house prices are like a rolling hill, sometimes down and sometimes up, rental income trends upward steadily. Therefore, it is NEVER a bad time to invest long term in rental properties, as long as they are cash flowing.
Thank you, that make so much sense
This is valuable information.
What banks are you referring to?
Most banks do have call options in the fine print. So be careful
@@TopVillain You are correct sir. IMO if you find a good deal..and are financial disciplined and find a cash flowing real estate investment..instead of a steak a heloc coud be a good option
I think it really depends on what you use the HELOC for, if you use your leverage properly to build wealth and into the right investment, then it can work.
facts
But careful too.. that's why lots of people lost all their properties during the 2008 bubble.
I agree, it’s not bad to use it to create wealth
It will definitely help if you use it wisely. Let's say: HELOC is about $50K. Take a 10K chunk first and pay it off. Then move on...
@@vagnerpilar at the end of the day, you're putting your house on the line. It just adds stress. And if the justification is that you have enough money or extra income to cover the downside risk then just be patient and use that money for your business/education/smart reason. Not only is it safer and more sustainable but without the stress of the risk, many make better long term decisions.
Not only am I old enough to remember I had the foreclosure and bankruptcy scars to prove it happened.
if the prices are the highest to sell your home then doesn't that mean you will be paying more to buy another at the inflated rate? i don't see the incentive if your just swapping the high point for your current home for the high point of another house.
goalieguy55 well you might time it right by selling then rent short term until crash then buy.
@@jerrylisby5376 A crash can take years. Before 08,when was the last housing crash?
Build
You are right. It pays to sell if you downgrade or move to an area where housing is significantly cheaper than your current location.
TeamDATL Tae I was told building will be more expensive ?
I like how he said to sell while the market is high, but never mentioned you’ll have to PAY MORE for your new house that has an inflated price….😂 🤷🏻♂️
He just wants to make money off the transaction of you selling
I love the HELOC, it is the best thing ever if used correctly. Just like a plane or a car is. They are scary and terrible if you drive or fly irresponsibly. If you use a HELOC irresponsible--BAD idea. Use it correctly, it is a massive benefit. The key is responsibility--be responsible.
exactly! I learned this the hard way. I just contacted maliandebt to see my options
absolutely!
I just heard about it today. This stuff to me is confusing but I'm trying to look into it.
Daves main listeners don't have discipline.
The key to using a HELOC "responsibly" is KNOWLEDGE! Remember that Dave Ramsey's business caters to financially ignorant people who have gotten themselves into massive debt and want SOMEONE ELSE to get them out of debt. People like you who have taught themselves to understand financial tools and investments will rarely, if ever agree to what Ramsey teaches. He caters to people who are still learning "Baby Steps!"
Notice he read the statement that people are considering an equity line of credit, then went on to talk about an equity loan.
I had an extremely good experience using my home equity to make some very good deals and improvements on purchases, paid everything off completely and stacking up cash now so i don't agree with this advise as a rule. Be disciplined and use it wisely.
Go away
Sold my house. Now I'm homeless but hey I'm rich!
should have kept it and rented it out.
@@freddymendez3655 .....and still be responsible for wear and tear, dealing with tenants, property taxes, ....ect.
Hmmmm......
Now you could live in a really nice van, DOWN BY THE RIVER!
@@freddymendez3655 that’s what I did to mine best decision ever
@@KingjamesAV1611 exactly. No thanks. Heard too many horror stories.
He doesn’t want you to take out heloc. He wants you to sell with his realtor list so Dave Ramsey can get a portion from your home sale.
Exactly
@@comfy_rwds the proof is his video promoting you to NOT use a HELOC!
And his other vids promoting realtors associated with him. He gets a cut from the commission they get.
It's obvious.
I was one of the blessed people that was able to sell my house in 2009 and made a profit and bought my new home foreclosed... best thing That ever happened to me... thinking of selling again and get the max!
And my family and i are the blessed ones who bought low in 2009 for a brand new house we watch built from the ground up for only $180k at that time. House is now worth $350k to $385k...cheers🍺🙂.
@@j.l.salayao8055 dont think we will see that again in our lifetime.. that was a Blessing... glad to know ur family was able to do that.. it was a sad time for all the ones that lost their properties..
'financing a steak over 30 years" and this is exactly why I did not get all the fancy upgrades when I had mine built. People thought I was crazy when I said I didn't want to finance granite countertops and tile floors for 30 years.
I remember those home-equity-loan days.
People used their house as an ATM machine, pocketing the "increase in value money." It usually didn't end well.
Truth right here. As a Realtor, when I see people keep refinancing or home equity loans, it usually isn't long until the homeowners are in a heap of trouble. Thank you for your recommendation of Well seasoned Realtors who sell full time !
30 years old, me and the wife close on a house in the coming up week. I've been watching so many of your videos. Only debt we currently have is her car payment, which has about 2 years left. Gonna get this house paid off ASAP. Thank you for all your advice Dave.
Congrats! I'm 38 and own more than 1/2 our home already.
@@Idiotsincarshere I'm 47 and own only 10% of ours. But, I plan to use the equity to make a large down payment on a much downsized home.
@@kbanghart That should ensure a much lower mortgage payment !
@@Idiotsincarshere yes, I can't wait. Right now 38% of my take home goes to my mortgage! But hope to get it down to 20% or maybe even 10
@@kbanghart So did you buy a new home with the home equipment ? Did you rent the house ? Just curious . im planning doing the same thing like you
He doesn't know how HELOCs work. My HELOC isn't "callable". Only if I default on the loan can they require me to pay back in a lump sum. My rate is not whatever the "banker's whim", it's based on the Wall Street Journal's prime rate. The HELOC allows you to buy income producing assets, not to "finance a steak over 30 years".
Title of video is about a HELOC but your whole video just talks about home equity loans. There is a difference.
Keep in mind when you sell your house at a high amount your next house will cost you a premium as well. It’s a wash. Enjoy
Amen. Oh cool I sold my house and made $200k!… which is just going to go to the next overpriced house
Unless you move to a more affordable area and maintain the same income.
Sell right now? in 2018? This did not age well at all. Dave I bought in 2018 and my home is worth double now in 2022. You were so wrong.
The rate of return from home equity has been, and always will be zero. (Yes, really.)
But borrowing against your home incurs an interest rate expense. If you can beat that interest rate expense (invest for cash flow with arbitrage), you're dollars ahead. Risk vs. reward.
I think it's wise to have a HELOC for emergencies. Drawing against that HELOC is up to you.
You're right, HELOC tends to be better in terms of the numbers. Either is a great strategy though. Once you get to that point, it's time to start looking into non-traditional financing (private money, business credit cards, etc).
that's what I am doing. But, instead of using the entire amount of my heloc, I am only using 20% of the property that I am purchasing and I am taking out the down payment out of my heloc and apply for a new investment loan. It works better on interest and not risking your house for the total amount.
@@williambella6293 thank you so much for the information, I have some more questions please
@@williambella6293 How can I connect with you I would like to pick your brain about a couple of things
There are some that are a 10 year draw and then a 10 year payback. I personally keep mine open as a catastrophic fund only. Just because you have one does not mean that you're using it.
Yeah Kim, I was going to say-I read the terms of mine pretty closely and I didn't see anything about annual/bi annual calls.
True statement Kim! My wife was a 20+ year banker and said many people use it in that way. I think you have to be extremely Discipline person not to pull out the cash. I’m thinking about pulling some out to build a pool in the backyard. I know it will overall increase the value of my home while making the quality of life enjoyable as well. Life is short and that’s not to say you can be stupid but I feel you have to enjoy yourself sometimes and not be fear like Dave is ranting on.
This is my third home purchase with the equity line of credit. I don't know what are you talking about. The tenants paying for everything and I get the return cash.
Hes saying that heloc is a callable loan
Lohe221 a HELOC isn’t a loan it’s a line of credit. There’s a difference. If you’re smart this works. Dave isn’t very smart in general. I watched a video where he told someone to payoff a 0% loan as quick as possible when they have a mortgage!!! Dumb.
@@shaneweddle4197 Dave says that psychologically it is better to pay off the small debts first, so you feel like you are accomplishing something. Or did you not actually understand what he advocates?
This is exactly what I am preparing to do.
Exactly! i ddidnt know this until i saw Daves video
A credit card add was before this video those companies are wasting money
Henry lever action - Love your name... great rifles.
Lolllll
LET THEM BURN
Agree with most here but if you can sell your own house do it. Real estate is a scam like travel agents. If can’t plan your own trip you shouldn’t be traveling.
I love HELOC!!!! Use it to buy a 2nd house & boom! Cash flow & assets
The title is way off the mark. Home Equity Loans are not Home Equity Lines of Credit...they are so different they don't even resemble each other
Ramsey you are not talking about HELOC!!
First the rant, then the sells pitch....to use Dave Ramsey’s real estate agents to sell your home. That was a smooth transition 😂
Ramsey doesn't get money from the recommended agents though. It's not really a sales pitch, he just vets the agents and tells you who the good ones are.
@@mtMage3 gtfoh he gets paid for it
@@mark3684 Have you worked with any of the recommended agents and asked them how the system works?
Dave Ramsey 5 years ago "If you are ever going to sell your home sell it now!"
5 years later, house market is on fire, had you listened to his financial advice you would have lost potentially hundreds of thousands in value as the market currently stands.
That's why I want to take out a line of credit buy land and build a new home. Rent out my current home and allow it to continue to build equity.
I was thinking about taking out a home equity loan and I'm glad to say you changed my mind good sir
"You didn't pay off your credit card debt..you moved it!"..😂😂😂
I want an alarm clock with Dave Ramseys voice on it yelling at me to get up and just start going at me with financial jargon
Actually the rate is based on the Prime Rate, not some banker's whim
FYI. There's a difference between a Home Equity Loan and a Home Equity Line of Credit. HELOC's have worked beautifully for me. Lol 😂. I used them to pay off my primary residence and one of my 3 rentals so far. The way to go is the First Lien HELOC.
Lol. 2018 was the time to sell your house? This is 2022 laughing at you...
5:00 I lost it when he says you financed a steak dinner over 30 years lol
It depends on the interest rates what what you’re going to use the money for.
Vid title is HELOC, but the rant is against a loan. Two completely different things.
Yeah DR has shown a remarkably low understanding of REI. He's good at getting people out of debt, which is important. But that's it. His advice on investing is pretty bad.
Heloc and buy safe assets.
Hahah another perfect rant, somehow i love this guy, he has a way of just saying it how he feels, even though sometimes I disagree
You sell you’re house for $750k you buy the next for 850k lol
has long as there is property tax .you will never own your hm. people are being taxed out of their homes.
Ron Mccullough very true Ron if You don't want that house don't pay the property tax see how long You have it so You really don't own anything
And if you rent,part of that pmnt goes to the landlords taxes
Anyone being "taxed out of their homes" bought more house then they could afford. There will always be property tax. Please stay on the sidelines complaining so you are out of my way, thanks.
Higher property/school tax means better location, better services and better schools..Much more desirable neighborhoods!
Tony J high property tax works as a social filter to keep the hood out
If you use the Heloc to buy more income producing assets. I don't see the issue.
That was a horrible recommendation to sell R/E 5 years ago. Someone was looking for commissions.
This did not age well
OMG! I was looking for some real estate information and came across this awesome rant, I can’t stop laughing 😆.... But it’s the truth!
Not much of this rant is true.
I want to use a HELOC to pay down my mortgage. I will buy nothing with it and use the HELOC advance to chunk the mortgage. I put all my cash that I make to pay off the debt. I also have enough money put aside to pay it off if they call the loan.
Two reasons to take out a home equity loan 1. You have two months to live and 2. You hate your children.
😂
Depends on what you borrow it for and wise you are...
Yeah but it was either get the home equity loan or keep the plumbing with cracks all through and rotted away part of the floor. Home ownership is the best! -_-
I totally agree. Home equity is a tricky one. It's not really your money! It's your money if you sell your house. Then you get your home equity, whatever the amount of it. But you don't have a house anymore! So you have to buy another house! Then you use your home equity as down payment. It's safe to not touch your home equity. Just let it grow until you pay off your house.
What if you use it to remove mortgage insurance?
You do better if you refinance your mortgage to remove pmi
2 years after this video and market has further appreciated.
@daveramsey when you sell your house in a high market, should you rent until the market goes down? If you sell and buy in a high market are you gaining anything?
It really depends on the circumstance! What value is there when you sell your home "High" but then have to go pay a "High" rent to someone else. Remember that rent payments are just someone else's Mortgage payments that the renters are making while the owner gets the equity. If you are going to sell your house "High" then the solution is to buy a Duplex, Triplex, etc and let the renters of the other apartments pay the Mortgage as their rent. Then later, you can rent out the entire Duplex/Triplex, and go buy yourself a home on the "Low."
The rate is based on the banker's mood? What are you, high? It is based on the current market rate with the obvious considerations for credit worthiness, history, DTI, auto pay etc.
You can lock rates or you can go variable. Its typically a ten year LOC so yeah if you go variable the rate is going to change with the current market conditions.
Come on Dave!
DR is talking about Home Equity Loan not Home equity line of credit - the title, they are two different things. Bait and switch.
Actually the rate is based on how much you borrow your credit rating and your dti. It is always primes plus a margin so it is based on something. Most banks have a promo rate of prime minus a margin as well so they actually get a good rate. Also rate can be fixed so it can’t be changed whenever a bank wants to. Also if your info is false.
He’s just trying to put fear in people! You of course have to be responsible with any huge decision when it comes to your house. I’m planning on building a pool with a Heloc because I’m not a millionaire like Dave over here. The pool will increase my property value while providing fun in the sun ☀️ for me and my family.
Love me some Dave Ramsey!!! Every time I think about making a financial decision I pop on some Ramsey and set myself straight!!!
Haha me too. He immediately talks me out of it.
With Entrepreneurship, there is always risk involved. People take out HELOCs (not home equity loans), but lines of credit, to buy real estate investment properties. Is there risk? sure like you say if the real estate market crashes like in 2008 or if the bank just so happens to call the loan. But people use these things to become financially independent.
Subject says Line of Credit (HELOC) and Dave keeps saying equity loan.....HUGE Difference Mr. Ramsey.
Not really.
Yea.. kinda is. HELOC is a line of credit that is reusable. Home equity loan is an amortized loan.
Line of credit is a second mortgage when borrowed.; which is an equity loan .
East Wind Black Paw not really because if you get a heloc you don’t owe anything till you use it
Exactly! 2 completely different loans. To me it Sounds like Dave just wants to get his commission if you hire one of his real state agents 😜
fast forward to Aug 2022 and housing is even more expensive. Props to you all that waited.
Thanks Dave! Always rewarding to be ranted out by you! Keeps my brain in check.
Just cause I'm a Grami now doesn't mean life is adorable, fussy and lovable like me! haaa:)
$20,000 to go and the house is paid off!!! Could of used your realism 15yrs back for some stupid. You Rock! LoveXO
congrats for me 35K to go and am getting impatient lol
Why would you sell your house just to sink the profits into another home? Isn't that just as bad as a home equity loan? lol
Hey Dave, I am completely aware amortized interest on a mortgage is the worst possible interest you can sign for. You mentioned when you use a LOC to move your debt to another LOC is stupid because your simply moving it. My question is would it still be beneficial to paying off your mortgage faster to pay off your mortgage with a non-amortized LOC so you can pay less interest in the long haul?
HELOC or not to HELOC. It depend on your overall financial situation.
REFUNANCED A FREAKING STEAK FOR 30 YEARS 🤣
Aren't home equity loans different from HELOCS?
Bingo
Yes they are different Dave isn’t someone I’d listen to
Absolutely. A home equity loan is a amortized loan. A HELOC is a revolving line of credit. Very different.
Don’t use it for depreciating assets. Plain and simple. Plenty of people leverage HELOCs for home value increases and even 2nd properties. A loan is a loan is a loan.. you can use it wisely or foolishly.
What if you need to pay off your credit card? Isn't it better to pay a 3% interest on mortgage than a 16% on a credit card?
I know a multi-millionaire that built his business on a HELOCK when he was worth less than 50k. His HVAC businesses is great now 25 years later. They are not always bad.
Yeah, I was living in Las Vegas at the time ground zero in 08 I can’t even wrap my head around why the fact I didn’t buy something when I lived there. I’d be cashing in my retirement chips. I’ve beat myself up every single day since 2008 and we’re in 2023 now.
In 2008 i bought my house cash below what the builder sold to the man who originally purchased it at 165k then I paid 163k . Within 2 years its 283k. But why give it to a salesman? Why can't you sell your home yourself?
Most HELOCs are not callable and the rates are set in contract to be a spread above (or below - if you have pristine credit and your LTV is low) WSJ prime. Most *can* freeze the line for additional draws if there's a substantial drop in housing price.
I never really understood that concept of buy when the market is low but sell when it’s high unless your talking about selling a second home or something because if you sell your home then you have to buy another home right...while market is still high? Or rent till it’s low again
THANKS BRO FOR THE INFO GODBLESS YOU
DONT BORROW AGAINST YOUR HOME. IF YOU DEFAULT ON THAT HELOC, YOU WILL LOSE YOUR HOME. THE BANK WILL TAKE IT. PLEASE DONT DO THIS.
Thanks so much! Forever grateful to Dominic for the referral, if not we would have lost our house and almost every other thing
Thats really amazing! glad to hear you didnt lose your house
wow! I really need this. where can I find him please?
Thats cool
please I really need this too
thats awesome!
Nobody talks about this. You are the first one