Latest / Earn Your Leisure / Refinancing Your Home: Understanding HELOCs and Making Smart Financial Decisions

Transcript

Refinancing Your Home: Understanding HELOCs and Making Smart Financial Decisions · Earn Your Leisure

• 0:01
  Speaker 1: This episode is brought to you by P and C Bank.
• 0:04
  Speaker 1: A lot of people think podcasts about work are boring,
• 0:07
  Speaker 1: and sure they definitely can be, but understanding a professionals
• 0:10
  Speaker 1: routine shows us how they achieve their success little by little,
• 0:14
  Speaker 1: day after day. It's like banking with P and C Bank.
• 0:18
  Speaker 1: It might seem boring to safe plan and make calculated
• 0:21
  Speaker 1: decisions with your bank, but keeping your money boring is
• 0:24
  Speaker 1: what helps you live or more happily fulfilled life. P
• 0:28
  Speaker 1: and C Bank Brilliantly Boring since eighteen sixty five. Brilliantly
• 0:32
  Speaker 1: Boring since eighteen sixty five is a service mark of
• 0:35
  Speaker 1: the PNC Financial Service Group, Inc. P and C Bank
• 0:39
  Speaker 1: National Association Member FDIC erness What's Up? You ever walk
• 0:45
  Speaker 1: into a small business and everything just works like the
• 0:49
  Speaker 1: checkout is fast, the receipts are digital, tipping is a breeze,
• 0:53
  Speaker 1: and you're out the door before the line even builds.
• 0:55
  Speaker 1: Odds are they're using Square? We love supporting business that
• 1:00
  Speaker 1: run on Square because it just feels seamless. Whether it's
• 1:03
  Speaker 1: a local coffee shop, a vendor at a pop up market,
• 1:06
  Speaker 1: or even one of our merch partners. Square makes it
• 1:09
  Speaker 1: easy for them to take payments, manage inventory, and run
• 1:12
  Speaker 1: their business with confidence, all from one simple system. If
• 1:16
  Speaker 1: you're a business owner or even just thinking about launching
• 1:19
  Speaker 1: something soon, Square is hands down one of the best
• 1:22
  Speaker 1: tools out there to help you start, run and grow.
• 1:25
  Speaker 1: It's not just about payments, it's about giving you time
• 1:29
  Speaker 1: back so you can focus on what matters most ready.
• 1:32
  Speaker 1: To see how Square can transform your business, visit Square
• 1:35
  Speaker 1: dot com backslash go backslash eyl to learn more. That's
• 1:40
  Speaker 1: Square dot com backslash, go backslash eyl. Don't wait, don't hesitate.
• 1:45
  Speaker 1: Let's Square handle the back end so you can keep
• 1:48
  Speaker 1: pushing your vision forward.
• 1:51
  Speaker 2: Matt for you.
• 1:52
  Speaker 3: For the person who may be watching and they're afraid,
• 1:55
  Speaker 3: what advice do you have for them? And then is
• 1:57
  Speaker 3: there anything to just You've adjusted in your home buyers
• 2:00
  Speaker 3: blueprint to give them a little bit of confidence that
• 2:02
  Speaker 3: it's okay to buy now over the next year.
• 2:05
  Speaker 2: So the more you learn, the more you earn. Right,
• 2:09
  Speaker 2: the more you learn, the more you earn. And when
• 2:12
  Speaker 2: I speak to people about buying real estate, they're more
• 2:14
  Speaker 2: fearful in because they don't know nothing or they have
• 2:18
  Speaker 2: lack of knowledge. In a couple particular areas. So whoever
• 2:22
  Speaker 2: has fear, you got to really do a deep dive
• 2:24
  Speaker 2: in yourself and say, why am I scared to buy property?
• 2:27
  Speaker 2: Why am I scared to invest? And kind of work
• 2:29
  Speaker 2: your way back from there. But I find it the
• 2:31
  Speaker 2: more you're putting into your education about home buying, about credit,
• 2:36
  Speaker 2: about if you want to do rehabs, if you want
• 2:38
  Speaker 2: to do new construction, whatever it is, the more knowledge
• 2:41
  Speaker 2: you have, the easier it's going to be for you.
• 2:44
  Speaker 2: It's not going to be a better Roses or something
• 2:47
  Speaker 2: like that, right, but they'll be a little bit more
• 2:48
  Speaker 2: easier for you. But also managing your expectations and try
• 2:51
  Speaker 2: to take your emotions out of this. I think Rashad
• 2:54
  Speaker 2: had a famous quote. He told me want is no
• 2:57
  Speaker 2: emotions in anything basically, right, I'm paraphrasing he says something different.
• 3:01
  Speaker 2: I can't remember word for word, but basically, you got
• 3:03
  Speaker 2: to take your emotions out of the real estate game
• 3:07
  Speaker 2: or anything investing.
• 3:08
  Speaker 3: Right.
• 3:08
  Speaker 2: You got to look at you got to look at
• 3:10
  Speaker 2: even if you're buy your first home, looking at this
• 3:13
  Speaker 2: as an investment for you in the future, and buying
• 3:16
  Speaker 2: the property as if you're an investor, and making sure
• 3:18
  Speaker 2: you buy and right, So as long as you do that,
• 3:20
  Speaker 2: then you shouldn't have fair.
• 3:23
  Speaker 4: So Mo and then Matt, you can chime in it
• 3:26
  Speaker 4: on this if you can well home refinancing, right, can
• 3:30
  Speaker 4: you just let's give an overview of refinancing. And for
• 3:35
  Speaker 4: the person that might be thinking about refinancing, they might
• 3:38
  Speaker 4: have heard it on television, but they kind of a
• 3:41
  Speaker 4: little nervous. What advice could we give somebody that's out
• 3:45
  Speaker 4: there that might have a home and is considering taking
• 3:50
  Speaker 4: the refinance route.
• 3:52
  Speaker 5: I've actually been having a lot of people want to
• 3:54
  Speaker 5: refinance because of that record equity, even before the rates
• 3:58
  Speaker 5: started going down a little bit. I think it really
• 4:01
  Speaker 5: takes you to analyze what's good for you. If you
• 4:06
  Speaker 5: have a two point seventy five rate, we got to
• 4:08
  Speaker 5: figure out why do you want to refinance? Like if
• 4:11
  Speaker 5: Matt said, its owner occupied and what have you? In
• 4:13
  Speaker 5: the rate is just over six percent, you're going to
• 4:16
  Speaker 5: take your current balance up a notch to the current rate.
• 4:20
  Speaker 5: So what does that actually look like? What are your
• 4:21
  Speaker 5: reasons for refinancing, what will you benefit from and does
• 4:25
  Speaker 5: it financially make sense? I think that's probably the biggest
• 4:30
  Speaker 5: assessment we're making. We're doing assessments for people to see
• 4:33
  Speaker 5: what makes sense. Does it make sense to take the
• 4:35
  Speaker 5: equity out with the heat locker, Does it really make
• 4:37
  Speaker 5: sense to do that? Refine and making sure that they
• 4:40
  Speaker 5: don't make a decision that isn't good for that long game.
• 4:43
  Speaker 4: So the home equity lot of credit for people that
• 4:46
  Speaker 4: aren't familiar, that is okay. So you buy a home
• 4:48
  Speaker 4: and it's worth you buy a home for three hundred thousand, right,
• 4:50
  Speaker 4: and then five years at home is worth six hundred thousand,
• 4:53
  Speaker 4: So you effectively have three hundred thousand dollars of profit
• 4:57
  Speaker 4: inside the home baked in, right, But you can't do
• 4:59
  Speaker 4: anything with that unless you tap into it. So if
• 5:02
  Speaker 4: you refinance it, right, you effectively get a new mortgage
• 5:06
  Speaker 4: in a sense you're at it either a higher or
• 5:10
  Speaker 4: a lower interest rate, depending on where the interest rates are.
• 5:12
  Speaker 4: But you can take out that three hundred thousand dollars
• 5:15
  Speaker 4: and use it for whatever you want, right and then,
• 5:17
  Speaker 4: But if you get a he lock then that's just
• 5:19
  Speaker 4: a line of credit where if you need to take
• 5:23
  Speaker 4: fifty thousand, you could you have three hundred thousand dollars
• 5:26
  Speaker 4: available or like two fifty because I don't think they
• 5:28
  Speaker 4: give you one hundred percent, right, and you can use
• 5:30
  Speaker 4: up to like, let's say, two hundred and fifty thousand dollars,
• 5:33
  Speaker 4: as you choose. But if you don't need to use it,
• 5:38
  Speaker 4: or if you don't need to use the whole thing,
• 5:40
  Speaker 4: then it's like a lot of credit that you can
• 5:44
  Speaker 4: use at any point in time, right, correct? But does
• 5:48
  Speaker 4: your interest rate change with the he lock?
• 5:50
  Speaker 5: Also not the rate on the mortgage you already have.
• 5:53
  Speaker 5: So that's why I said it's more of an analysis,
• 5:55
  Speaker 5: because if I'll give you an example, my interest rate
• 5:58
  Speaker 5: on my mortgage is three percent. Did take out a
• 6:00
  Speaker 5: helock right after I did my refinance for two hundred
• 6:05
  Speaker 5: thousand because I wanted to have my equity on tap
• 6:07
  Speaker 5: when I needed it, So it's sitting there. I haven't
• 6:10
  Speaker 5: used that helock yet, but I can use it as
• 6:13
  Speaker 5: I need. But I'm going to keep that three percent
• 6:15
  Speaker 5: interest rate. If rates or when rates renormalize, it might
• 6:20
  Speaker 5: make sense if I use that money to add them
• 6:22
  Speaker 5: together and refinance for me personally, But because of where
• 6:25
  Speaker 5: my balance is at, it doesn't make sense for me
• 6:28
  Speaker 5: to refinance at a higher rate right now because I
• 6:30
  Speaker 5: don't have anything to pay off as far as debts
• 6:32
  Speaker 5: and things like that. Sometimes if you're refinancing and you're
• 6:35
  Speaker 5: going to consolidate long term smart debts, maybe increasing your
• 6:40
  Speaker 5: rate works. But we analyze that to make sure we're
• 6:43
  Speaker 5: not just refinancing for a sport, is what I like
• 6:46
  Speaker 5: to call it, Like what are we doing this for?
• 6:48
  Speaker 5: You know, So tapping that equity if that's what you
• 6:50
  Speaker 5: want to do to do home improvements, looking at it
• 6:53
  Speaker 5: both ways is probably smart from a mathematical standpoint. I've
• 6:57
  Speaker 5: looked at some people and I could end up increasing
• 6:59
  Speaker 5: their payments by thirteen hundred a month just to get
• 7:01
  Speaker 5: them fifteen to twenty thousand dollars. That wouldn't be a
• 7:04
  Speaker 5: smart refinance. So I give them alternative options to maybe
• 7:08
  Speaker 5: accomplish what they want to accomplish.
• 7:11
  Speaker 2: Yeah, So I'll add on to the helock conversation is
• 7:14
  Speaker 2: anytime you're doing the home akulina credit, understand it's a
• 7:17
  Speaker 2: second lean and you have to be very careful with
• 7:22
  Speaker 2: you know helocks in general, right, member, this is the
• 7:25
  Speaker 2: church's money, this is your house money. So if you're
• 7:28
  Speaker 2: taking out money and you're going to use it, make
• 7:32
  Speaker 2: sure you have a plan either investment into a business,
• 7:34
  Speaker 2: more real estate, stocks, options, whatever, but understand the risk
• 7:38
  Speaker 2: that comes with any type of investment. If you're using
• 7:40
  Speaker 2: a helock, it's not guaranteed, especially if you're doing real estate.
• 7:43
  Speaker 2: Tennis are not guaranteed to pay you. But I love
• 7:46
  Speaker 2: helocks and the amount of equity tappable equity that's out
• 7:49
  Speaker 2: there right now is absolutely I mean, it's insane. It's
• 7:53
  Speaker 2: record breaking right now. So I would advise anybody right
• 7:55
  Speaker 2: now just look into, like Mo said, tap into the equity.
• 8:00
  Speaker 2: Even if you don't use it right now, you can
• 8:01
  Speaker 2: have it sit on the sideline because right now you
• 8:04
  Speaker 2: can't go to your mailbox and put your ATM card
• 8:06
  Speaker 2: and get equity out of your home. You have to
• 8:08
  Speaker 2: apply for it, and the banks have to be willing
• 8:11
  Speaker 2: to do on it. Right they have to have an
• 8:12
  Speaker 2: appetite for helocks. Right now, in the current market that
• 8:15
  Speaker 2: we're in, banks lenders have an appetite for helocks. So
• 8:19
  Speaker 2: everyone who has home and has equity and you can
• 8:22
  Speaker 2: qualify for a helock, you should look into taking out
• 8:26
  Speaker 2: a helock. Just proceedable caution, make sure you know exactly
• 8:29
  Speaker 2: what you're doing, because if the market does go the
• 8:33
  Speaker 2: wrong direction, if the banks start seeing there is a recession,
• 8:37
  Speaker 2: they might start cutting back on some of these products.
• 8:39
  Speaker 2: This happens all the time in the industry with godlines changed.
• 8:43
  Speaker 2: So just because something a product is available today at scale,
• 8:47
  Speaker 2: it might not be available when you really need it.
• 8:49
  Speaker 2: So the best thing you could do is tap into
• 8:52
  Speaker 2: that equity so you can reinvest and make more money.
• 8:55
  Speaker 2: In my opinion, but everybody.
• 8:57
  Speaker 6: An illegal alien from Guatemala charged with repel being a
• 9:00
  Speaker 6: child in Massachusetts. An MS thirteen gang member from Al
• 9:03
  Speaker 6: Salvador accused of murdering a Texas man of Venezuelan charged
• 9:08
  Speaker 6: with filming and selling child pornography in Michigan. These are
• 9:12
  Speaker 6: just some of the heinous migrant criminals caught because of
• 9:16
  Speaker 6: President Donald J. Trump's leadership. I'm Christy Noman, the United
• 9:19
  Speaker 6: States Secretary of Homeland Security. Under President Trump, attempted illegal
• 9:24
  Speaker 6: border crossings are at the lowest levels ever recorded, and
• 9:28
  Speaker 6: over one hundred thousand illegal aliens have been arrested. If
• 9:31
  Speaker 6: you are here illegally, your next you will be fined
• 9:35
  Speaker 6: nearly one thousand dollars a day, imprisoned, and deported. You
• 9:39
  Speaker 6: will never return. But if you register using our CBP
• 9:43
  Speaker 6: home app and leave now, you could be allowed to
• 9:46
  Speaker 6: return legally. Do what's right. Leave now. Under President Trump,
• 9:51
  Speaker 6: America's laws, border and families will be protected.
• 9:54
  Speaker 3: Sponsored by the United States Department of Homeland Security,