HELOC Explained (and when NOT to use it!)

so, is it better to have higher or lower remaining balance on current mortgage? 🤔 (in order to get higher HELOC)

So if I use the HELOC then do I pay the interest off every month and my mortgage? Or does the Heloc pay for mortgage. And then out of pocket I pay for the interest. Just looking for help. Thanks all.

I’m soooo confused about how a HELOC is used to pay off a 30 year mortgage in 5-7 years. Nobody explains this and it’s hard to get accurate information on this technique.

It same as lone of credit
But heloc on collateral

For refinance you have to pay for doc fees...about 3% , but fix rate
For Heloc you don't have to, but interest may go up ( base on FED)., and Heloc only max you $100k no matter what.
Both Refinance and Heloc you can file tax 1099 to get money back.
Your information miss so many importance things.

Bank of America is the WORST!!! Avoid like the plague!

Thanks guys- great video

Hey @Chandler the HELOC as a downpayment is something I am actually doing this right now. There are FIXED rate HELOCs too. So it works if you're not doing a variable rate which is always risky.

One situation you didn't mention. Building a new construction home-- using a Heloc to put the money down for construction loan until house is built... Recommend heloc for this??

whats the average interest rate on a heloc

How about if the home I bought was 330k and I put down 130k…can I get that 130k ona HELOC?
I can’t build equity for the remaining amount because I have to pay the interest off for the next 5-7years

I just discovered your channel and subscribed, so my first question is: can I request a Heloc at any bank or has to be any specific bank?

THANKS. Just what I needed to watch. My wife and I got a 400k HELOC from our 780k primary home which we are still paying a mortgage for. I want to only use 200k for this new duplex down payment. I realized that the secret to making millions is making better investments and staying out of debt.
I'm grateful to GOD for the internet space, we were able to join the credit repair program, we payed up our debt and now we are back to being the administrators of our farming business and our own properties, as well as small pensions. I am almost 56, my wife is 52. We have started saving for retirement from the farm and maybe live off rental income, I would really appreciate it if you would do a video on how to earn using Airbnb and retire comfortably.

Hello! Great video. I was wondering if you wouldn't mind taking a stab at answering my question - I was recently offered to participate in the purchase of a couple of businesses through private equity and am trying to determine the best way to fund these deals/opportunities. Both have an approximate payback period of 1yr. I was originally thinking to use the equity I have in an investment property ($195k mortgage at 3.125%, $350k Zestimate). This property was just put into an LLC but has not yet been taxed as part of a business. Thanks!

I foreclosed on a home in 2012 and I am still paying the HELOC payment every month... $1500k/month- It is recourse unfortunately. Anyone have any experience in paying a HELOC on a home that has foreclosed?

I’m glad I found this video.
It broadened my knowledge about refinancing and HELOC.

Can you use it to put it to a down payment for a home?

I got 80k in debt. My property had 500k in equity. Do I go get a heloc to pay my bills? Or do I refi?

So I have like $300k that would be available to me if I took out a HELOC....let's say for grins and giggles I wanted to take out and use $50k just to invest in stocks/crypto etc, can I do that and then pay back the interest fully?

I own my home outright. I don’t owe anything on it. My home was a gift. Can I still get a HELOC, and if so, how much

Good Sir .. what about someone like myself who has equity and needs to get out of high interest credit card debt? What is best tool to mitigate the high interest rates on credit cards? Thank you for your time

Going to get a HELOC, take it to Vegas and win a bunch of money then repay the HELOC and be rich.

Had an interest rate of 2.5% on our primary mortgage so we weren't going to change that! By mid 2020 we had a ton of equity so we added a HELOC to do a bunch of improvement to the house (~$90k worth). Now I'm paying a ridiculous $750+ per month IN JUST INTEREST on the HELOC. What are my options to reduce this burden? Refinance the HELOC somehow? If so, how???

Will my mortgage interest rate change if I get a heloc?
Cuz my interest rate is 3% 😊

Thank you!

Facing a financial crunch, especially as seniors, we're pondering the idea of cashing in on our home equity. The question is, should we invest the money, rent, or relocate?

I used a HELOC for a down payment on a new house and will pay it off as soon as I sell my current house.

Managing money is different from accumulating wealth, and the lack of investment education in schools may explain why people struggle to maintain their financial gains. The examples you provided are relevant, and I personally benefited from the market crisis, as I embrace challenging times while others tend to avoid them. Well, at least my advisor does too, jokingly.

I need to know if this is financing that I need to use or not (line of credit), I'm gonna be ramping my revenue ASAP as a new contractor installing windows and doors, I've got a property I'll buy in the immediate future, Is it blow or no show? please let me know why otherwise thank you.

Equity in a house will likely be tapped into via a HELOC or straight sale. I believe if they sell, many will go back to renting. And housing supply will inevitably rise. So you can borrow against your home. What could be the best allocation for my $1m liquidity? Perhaps my stock portfolio

I need to know if this is financing that I need to use or not (line of credit), I'm gonna be ramping my revenue ASAP as a new contractor installing windows and doors, I've got a property I'll buy in the immediate future, Is it blow or no show? please let me know why otherwise thank you. Multi-family rentals

When you start to use a portion of the HELOC, are you paying interest on the portion or the entire amount?

So when does the intrest start and stop? So if my Heloc is a 100k and take out 30k flip it to 60k put 30k back.. do i gotta keep patlying intrest?

I can dig it

There is no such thing as good or properly used debt! Why on Earth would I listen to somebody that's 10 million dollars in debt and if one little thing goes wrong in the market will have to file for bankruptcy? I'll just be smart and not get an HELOC period.

Great synopsis, wish I watched this video before watching all the others. Definitely going to subscribe now.

🤚🏻 Question! My credits "good", but not great. My issue is debt to income - too much unsecured debt, & low income, but I do own a house I've lived in for almost 10 years. My plan's to borrow (interest free) $ from my parents, pay off my debt, wait for my credit score to go up, get a HELOC, then repay my parents. Good idea? Or are there any issues with this plan, & how quickly will my credit score rise to get me approved for the HELOC once my unsecured debts paid?

Youre the guy taking homes away from first time home buyers

I was wanting to get a HELOC to pay off 2 cars 3 loans and 20000 tword the principle. Is this a good idea

Well done Chandler! Very helpful. Thank you!

Hi, what bank is the best for Heloc?

Well said, but can you describe in details on paying off a mortgage from the Heloc ?

Thank u

I applied from two HELOC providers. Both said that repayments begin right away and that both some principal and interest have to be paid back on a monthly basis. This has me concerned. With all the videos about HELOC's I've been under the impression that only interest needs to be paid back in the draw period. Can you clairfy?

1st time home owner here. The video was very helpful in explaining the differences. I also appreciated some of the feedback below. Is there a waiting period after purchasing a home that you can take out a HELOC or Refinance? I would like to pay off some things and get a seond bathroom in my home.

Hi. I found your HELOC video informative, but I'm still not sure what direction to go... We live in Texas and I bought my house 12 years ago this December as a foreclosure. It's a 3 bedroom, 3 bath house on a 1-acre lot in the country. Back in 2015 I had a 1000 square foot detached metal garage/shop built that cost about $20,000 and was paid off in 2018. The house is valued on the tax roles $130,000, but with home prices the way they are and the amenities the property has to offer, I can imagine that it would sell quite quickly at $150,000 maybe even more. As a foreclosure, we got the house really cheap and we've made modest upgrades, especially the last 5 years: completely remodeled kitchen with granite counter tops and all new appliances. Two of the three bathrooms have been remodeled, new paint throughout, LED lighting, ceramic plank tile flooring through most of the house, new windows and doors, new roof (2012), you get the idea. This past June, the old HVAC unit finally quit and we had to replace the entire HVAC system, which came in at about $8000 out of pocket. My mortgage rate is a shade above 4% and I only owe right at $40,000. Over the years I've made additional payments to principle when I could, but have settled back into paying the regular payment, which is $320 a month. Some people can't believe how low that is, but you have to remember it was a foreclosure in addition to the fact that I put over $20,000 from the sale of my previous house towards the purchase, so I didn't really borrow that much. Seven years ago I got rid of the escrow account and since then pay property taxes and insurance separately from the mortgage. The idea of a HELOC was interesting, because I'd like to get the mortgage paid off within the next 4 years or less, which based on what I've learned about HELOCs is quite doable. In addition to getting out from under the mortgage, I'd also like to finish off the remaining upgrades to the house: new carpet in 3 rooms, rebuilding the back porch cover and replacing the back porch concrete, and just general landscaping and things outside. Financially, my credit score is very good, above 800, and we have zero credit card debit. We have two credit cards with a total of $30,000 of available credit, but again we don't carry debt on those. Typically our rule has been never to put any more on the card than we can pay off in one to two months max. Our monthly income is just a little above $4000. As of this month September 2023, we will make the last payment on my wife's car; mine has been paid off for years. So other than normal monthly bills and the mortgage, our expenses are only about half of our income. We have savings, but I didn't want to tap heavily into that to aggressively pay off the mortgage especially since we just had to foot the bill for the new HVAC which ran our savings down considerably. We try to follow the rule of keep the equivalent of 6-months of expenses in savings for emergencies and such. So after all that... if you're still with me, I think the HELOC would be a good way to pay off the mortgage super fast and give us the fluid capital to complete the upgrades to the house, while allowing us to maintain our savings cushion. That said, I discovered the bank we do business with does not offer HELOC. So the question is, is a HELOC the best way to handle our situation to pay off the mortgage and do the other things, and IF so, where are the best places to shop for a HELOC? Thanks for your time and attention.

could you use a heloc in sfh to get a apartment(5plex) to fix up. Then, do a refi on the apartment to pay the heloc back and for your next property. Would that work?

Hey chandler, quick concern, I have a rental property out in Las Vegas that I’m trying to take some equity out of it. But my bank doesn’t do HELOC for rental property do you recommend any other banks that do HELOC for rental property. Or do you retro refinance? Plz help.

Super helpful thank you. I have 78k in savings and can get up to 80k in a HELOC. I'm planning on using a mixture of both, so that I keep cash ~$30k cash reserve in a high yield savings account (4.8% interest) and have enough for a 20% down payment on an investment property that cashflows enough to cover the investment property mortgage + expenses, HELOC monthly payment. I've secured a fixed rate HELOC at 7% from my credit union and I intend to pay that off in 5–10 years from the cash flow of the investment property (I can afford to and don't mind if I have to dip into my own pockets if some months I don't break even but the goal is to profit each month). What do you think of this investment strategy? I know you advised against using a HELOC to buy an investment property. But curious what you think given my situation.

Wait can you clarify when you say “only pay interest” on the heloc. Are you saying if I get a line of credit for 50k and use all that to pay off debt then I only pay interest on that 50k which let’s say is 10% so it’s only paying 5k instead of 55k?