HELOC Explained (and when NOT to use it!)

In this video, Chandler David Smith breaks down everything that you need to know about a HELOC (home equity line of credit), and shares how you can use one to fund a real estate investment.

He shares what they are, how you can use them, and when you may want to consider other options. There are several big benefits to HELOCs, as it allows you to take out money with close to no fees, and the interest rates are much more affordable than a traditional loan. If your house has gone up in value (like everyone’s in 2021) then you can take out up to your entire value of the home, minus the amount left on your loan. As a simplified example you can take out $300,000, when you bought the home for $400,000, but have paid off $200,000, and if the home is currently worth $500,000.

The chance you have to immediately access this money to buy more growing investment assets should definitely be considered. Many people feel like they need to sell their properties in order to keep growing, but with resources like this, you can grow your portfolio extremely quickly. The advantages to using a HELOC to buy real estate is the low cost, and flexible payback terms. The con’s are not nearly as strong as the pros in most situations, but HELOCs usually have flexible rates, and the rules are always changing, so it can be difficult to plan for financing costs. HELOCs are a great way to fund your initial approach into real estate investing, and is a fantastic option for those who have already built equity into their home. The money acquired can be used for anything, from remodels, renovations, downpayment, and more.

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Many people ask questions such as:

Are Heloc Rates Fixed?
Are Heloc Loans Tax Deductible?
Are Heloc Rates Variable?
Are Heloc Loans Good?
Are Heloc Rates Variable Or Fixed?
Are Heloc Rates Going Up?
Are Heloc Payments Interest Only?
Are Heloc Loans Easy To Get?
Can Heloc Be Increased?
Can Heloc Be Called?
How Heloc Works?
How Heloc Interest Works?
How Heloc Works Canada?
How Heloc Is Calculated?
How Heloc Rates Work?
Heloc How Do They Work?
What'S Heloc Loan?
What Heloc Interest Is Deductible?
Heloc What You Need To Know?
What Is Heloc Mortgage?
What Are Heloc Rates?
What Is Heloc In Real Estate?
When Is Heloc Interest Deductible?
When Do Heloc Payments Start?
Heloc Where To Apply?
When To Use Heloc?
Who Is Accepting Heloc Applications?
Is Now A Good Time To Apply For A Heloc?
Which Is Better Heloc Or Home Equity Loan?
Which Is Better Heloc Or Cash Out Refinance?
Which Banks Offer Heloc?
Which Is Better Heloc Or Second Mortgage?
Which Banks Do Heloc On Investment Property?
Which Is Better Heloc Or Reverse Mortgage?
Which Is Better Heloc Or Personal Loan?
Heloc Who Is Offering?
Who Offers Heloc On Investment Property?
Who Does Heloc On Investment Properties?
Who Does Heloc?
Who Gives Heloc Loans?
Who Offers Heloc On Rental Property?
Who Does Heloc On Manufactured Homes?
Who Offers Heloc Mortgage?
Why Heloc Is Bad?
Why Heloc Is Better Than Mortgage?
Why Are Heloc Rates So High?
Why Use Heloc?
Why Get Heloc?
Why Choose Heloc?
Why Do Heloc?
Why Do A Heloc Loan?
Will Heloc Rates Go Up?
Will Heloc Rates Go Down?
When Will Heloc Be Available Again?
When Will Heloc Rates Rise?
Heloc Can Be Used For?
Can Heloc Be Used For Down Payment?
Can Heloc Be Fixed Rate?
Can Heloc Be Used For Investment?
Can Heloc Be Used To Pay Off Mortgage?
Can Heloc Interest Be Tax Deductible?
Heloc For Dummies?
Heloc For Down Payment On Second Home?
Heloc To Pay Off Debt?
Heloc To Invest?
Heloc Without Refinancing?
Heloc And Capital Gains?
Heloc And Then Refinance?
Heloc Like A Credit Card?
Use Heloc Like Checking Account?
Heloc Or Second Mortgage?
Heloc No Income Verification?
Heloc On Investment Property?
Heloc On Rental Property?
Heloc Or Cash Out Refinance?
Heloc Or Home Equity Loan?
Heloc Or Refinance?
Heloc Pros And Cons?
Heloc Qualification Guidelines?
Heloc Rates?
Heloc To Pay Off Mortgage?
Heloc Tax Deduction?
Heloc To Buy Investment Property?

[gideonwilson]

Chandler, you forgot to mention that after taking a HELOC and borrowing some money out of it, you can lock in a low rate for just $100 to $150. That way, you rate doesn't go up. Also, you can write off the HELOC interest rate in your taxes. HELOC is awesome and it has done big things for me.

[RafetMert-qskw]

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?

[skoopqueen]

I didn’t achieve financial freedom until I turned 40. As a US citizen, I raised capital by taking out a home equity loan. The interest rate was much lower than other loans, which made it a smart choice. With patience and discipline, I reinvested my earnings and avoided impulsive decisions. This strategy helped me grow my wealth, eventually allowing me to buy a new home and a car. If you’re looking to raise capital and achieve financial freedom, consider this approach..😊

[Martinturbo]

Good points - I'd use a HELOC for emergencies and renovations to increase the property value of your current home. I recommend using a fixed loan for a rental properties for budgeting purposes but hey, at the end of the day everything is a gamble and it's whatever you're comfortable with.

[alwaysTTG]

Great video! Only feedback is that if you have a HELOC, you can still refinance. The new lender will have to subordinate the HELOC’s lien position, and you can choose to either keep or close the HELOC at that point.

I’m a loan officer 😉

[thNYSV]

I just opened a $135k heloc through my credit union. Closing costs were only $400.
Going to use it as a down payment for a new home so I can keep my old home as rental property.

[Shultz]

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

[GeorgiaMoore.]

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.

[taylorsessions]

Man, I've been looking for a video like this months. Thank you!

[forrestswims]

Wow, this video couldn’t have come at a better time! I just closed on a $80k HELOC yesterday!

[michaelstewart]

Yo, nice content. I got a line of credit on my home which I used to purchase 3 more rentals. At time of withdrawal of my line, the bank actually offered me a fixed rate of 3.15 for 25 year pay off period. Awesome, no adjustable rate for me

[renairving]

Good morning and Happy Friday! This content is right on time for me, I’m in the process of getting a HELOC or a Home Equity Loan and I’m trying to see which one would work best for me. I’m paying a few bills off, minor home remodeling and getting my car fixed.

[jrlllife]

Got a new subscriber here. Appreciate you thinking ahead of the types of questions we are thinking about. 👏🏽

[andriyatomick]

thanks for education for people who come from other countries and have no clue how to survive in this country..talking about myself..learn a good lesson today..thanks again and wish you a good luck in your business project.

[livingthedream]

Great video, thank you for your educational video, I’m about to use HELOC and I’ve been very anxious, this video helps a lot

[Abhay_REtainment]

This is video is perfectly timed for me ! And as always you did fantastic job in explaining it in simplest way

[dougf]

One thing to remember on a HELOC is that if property values fall, the bank can cut you off from using it. Had that happen to me once.

[pinoylyfeinlasvegas]

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

[mytsoo]

Hey Chandler! Love your content...so helpful!

[IAmVik]

Even if you open a home equity line of credit and never use it,  you won't have to pay anything back. Keep in mind that whether you use your line of credit or not, you may be charged an annual fee, which is the cost you pay for having the line of credit available for when you need it.