Home Equity Line of Credit - Dave Ramsey Rant

Explore More Shows from Ramsey Network:

Ramsey Solutions Privacy Policy

[JamesWilliam]

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.

[tahirisaid]

HELOAN, HELOCs and cash-out refis should ONLY be used as leverage for investing in rental real estate. If you have sufficient equity in your primary residence and you’ve done your due diligence and the numbers work out on a great deal, a HELOC is preferable as you can pay it off when your ARV (After Rehab Value) on the new acquisition is enough to refinance the total debt. Service that debt from the rental revenue and enjoy the residual net cash flow. Then use it again on future acquisitions. This is what I’m doing.

[LisaSimplified]

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!

[TheMechanicj]

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

[CommercialFree]

"Stupid looks smart when times are good." True!

[jaredrice]

2018: this is the time to sell
Me in 2021: hahahahahahahaha

[benking]

2018 was a good time to sell. Until 2021 came along.

[blakebuol]

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.

[tinas]

“Now you’ve financed a freakin’ steak over 30 years.!” 😂😂

[awallacereviews]

I watched this when I contemplated getting a HELOC loan. Dave always motivates me to push forward and keep my head down

[nilgiridreaming]

I 'ate' my house twice: went from owning it to now owing $51k - I am fighting my way out of this self-created issue ... thank God I was born with the optimism gene! All will be well, I am sure. And I hope God just heard me say that! 😅PS: I have a chronic generosity problem! AND I undervalue myself. Darn it... it's taken finding Dave Ramsey in my senior years to be able to admit all that!

[dorothy]

"I want a new kitchen, princess...shut up!" 😂😂😂

[gregtaylor]

i did a HELOC in 1997( 60% of value)...it closed in 2012. paid it off within 10 years. intrest rate never went above 4.25%
this worked for me, as my house went up 150% in that 10 years! i now have 100% equity in a house that double in value

[redrubberball]

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, !!!

[isettech]

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.

[Andrew-epkw]

Dave is absolutely right. The equity in your home (the value minus the amount owed, for those of you who never listened to Dave) is NOT A BANK That's part of the way we got burned in 2008. Your house is worth a certain monetary value as a property, but is priceless to you as a home. Don't do anything to jeopardize the second fact.

[christianh]

No Dave. No 7th grade Econ class. That’s why I’m sitting here listening to you.

[bbfreetube]

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.

[LifeCoach]

Unless the 10+ banks I inquired about HELOCs are outliers, they tend to be tied to the Prime Rate, not just the "lender's mood".

[jorgeortega]

I don’t know what we would do without your advice Mr. David, You always strike the heart of the issue without the glaze.