HELOC Explained in 56 seconds!

HELOC's Explained! I've received a lot of questions lately on how the fundamentals of the HELOC work. The HELOC is a great tool, but if you aren't familiar with how they operate and all the considerations that go into using them, then you could find yourself in a bad situation!

I hope this was helpful and if you know someone who has a HELOC or would benefit from understanding how they work, I would appreciate a share! If you have other thoughts or we missed something, let us know in the comments below.
#shorts #heloc #realestate #realestateinvesting
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[John-prsw]

How stupid are people to say, I’m in a financial crunch. Let me take out a loan against my house. Ofcourse banks love this idea. It’s how they take your house stupid. But if you buy into this idea, you probably deserve to lose your house.

[drexelspivey]

Can you explain how to ensure cash flow? I think this is where I am a bit lost. And what I mean is that during the draw period are payments so low they ensure cash flow? How long do those last? Then when the draw period / only interest payment period is up do you assume that the reasonable rent will be high enough to cover that in the future or do you sell at that point and pocket the difference between what you get for the house and the principal loan balance?

[eltonlumban-gaol]

How is the payback structure look like? Also if you take Heloc against your home and your home value goes up after reappraisal, would that lock your equity ownership since you have principal tied up on the loan?

[Lisasims]

Hi thank you so much. What if the 80% equity is now more than you owe... couldn't i pay off my house?

[ADStudiosOfficial]

It would be 80% of the equity, not the total home value. Meaning, in this example, 80% of $90K, not $200K as you showed.

[PadroPadro]

I own my home outright no mortage and want to do this loan to improve the home. Is this the right path for me?

[cbrooks]

I’m confused. Is it a line of credit or a loan? Do you get a credit card or a check?

[makarands]

I have a fixed rate mortgage. Can i keep that old rate for original mortgage balance and get a new variable rate for a line of credit

[Hohmies]

But your amortization schedule resets, mortgage note goes up

[chrisstephens]

Can you do a more realistic scenario when someone owes more on their mortgage instead of just $15K

[SaltyNuts-slto]

Can you pay off credit card debt with a heloc ? Or will the banks think that’s a big no no