HELOC with the very first lien position HELOC what you'' re doing is you ' re completely.$ 10,000 into the checking account and then from our checking account we'' re. Comprehend the power of the speed banking method let'' s state on the. You literally get paid to do this strategy in fact I have a student.
https://www.youtube.com/embed/NaChRF5biPE speed banking can the speed
banking strategy actually assist you settle your home loan quicker? can you really
use a HELOC to pay off your mortgage within 5 to 7 years and can you
get results like this and this so in this video we'' d go break down what exactly is speed banking I'' ll provide you the action by action description as to how velocity banking works and how much cash in time you can conserve utilizing the speed banking strategy as well as stay to the end of the video since I'' m offering away our complimentary velocity banking calculator it''
s an excel file we can download it punch in your own numbers to see how much cash in time you can possibly save using the velocity banking strategy hey what'' s. going on this is Sam Kwak here among the Kwak Brothers and in this video you. can go unpack the complete details of the velocity banking technique and how can.
really assist you settle your mortgage quicker using a home equity line of.
credit and much like what I discussed earlier make sure to stay to the.
end of video due to the fact that I'' m handing out the free speed banking calculator and.
prior to we enter the video make sure to subscribe to our channel if you desire to.
discover more about the speed banking strategy how to settle your home loan.
faster utilizing a home equity line of credit and finding out how to purchase.
genuine estate we are the primary channel for home equity credit line.
so be sure to stick around and have a look at a few of the other videos that we have.
about this topic so to set the stage let'' s talk and go about what is a HELOC.
and how is it various from a home loan now with a HELOC it is frequently referred to as an.
open-ended line of credit so it'' s open-ended and what this generally suggests.
is that you can take the cash out of the HELOC and pay it back take it out.
pay it back and repeatedly and over and type of like a credit card with a.
home loan nevertheless a mortgage is closed-ended significance you can not take the.
Once you make a payment this is a considerable benefit with the, cash back out.
HELOC and this is very important throughout the whole entire strategy so.
do keep in mind the home equity credit line it'' s open-ended very essential.
for you to keep in mind that through the rest of this video now even with the.
heat long category there are 2 types of heat loss that we often speak about.
here in our youtube channel and that is the 2nd lien position HELOC and.
there'' s the first lien position HELOC and lot of times when individuals explain.
the speed banking technique they frequently go and talk about the second link.
HELOC of chunking down principle balances and we'' ll talk about that I ' ll. give you the full breakdown however I also want to talk about how the first lien.
position HELOC will deal with the speed banking method so throughout.
the rest of the video I'' ll offer you two circumstances what it would look like to utilize.
The speed banking method using a 2nd lien position HELOC in a.
lien position HELOC now you might be asking so what are the differences with.
the 2nd lien and the very first lien well a second lien position HELOC you have.
your existing home mortgage that you'' re looking to settle and
on top of the. existing mortgage you get a HELOC which is understood as a 2nd lien position.
HELOC with the first lien position HELOC what you'' re doing is you ' re completely. replacing your current home loan with a giant Gila so you know what I ' m gon na. have a mortgage so to speak in your house now you just have a HELOC
and that is. the only debt on your home so let ' s go and first talk about how does the 2nd. lien position HELOC deals with the velocity banking technique and this is.
the standard velocity banking that a lot of youtubers and different.
speakers speak about so the way that this works is you have a 2nd lien.
keylock fine and you have your monitoring account alright and preferably you want.
the bank account in the second lien HELOC in the very same bank it simply makes it.
much easier for you to move cash back and forth okay so traditionally you have.
your income can be found in to your examining account okay let'' s say for the for the. example of this video let ' s state your income is 5 thousand dollars a month.
now with the second lien position he lava Lassa to baking method what
. you ' re doing is you'' re taking a little chunk of your principal balance on your.
mortgage and you'' re simply moving it over to the 2nd lien HELOC so what.
that appears like is you'' re gon na write a let'' s state the second of all he locks at fifty.
thousand dollar limit okay and when I describe this to some of the customers as.
well as my customers in our YouTube channel I typically suggest that you.
$ 10,000 into the checking account and then from our examining account we'' re.
of moved it into our second lien position HELOC from there our income of.
five thousand dollars what we'' re doing is we ' re going as quickly as it hits your. inspecting account we ' re gon na go and take all of that into the 2nd lien.
position HELOC such so that we can lower the balance on the secondly he.
long this is where the magic of conserving your cash is due to the fact that now we reduced.
from tenth we went from 10 thousand dollar balance.
down to 5 thousand dollar balance the banks are going to say hey there'' s only. five thousand dollar balance of the HELOC so we ' re gon na go and charge you.
an interest as if you had a five thousand dollar balance so I'' m gon na
go. into reside in more information and I'' ll give you a little bit of a secret strategy. that no velocity banking presenter or other YouTube channel discuss so you.
certainly desire to listen to this really carefully now what we'' re gon na introduce. is a credit card on this side here okay alright and what you'' re gon na do is you. can do all of your costs on your credit card as much as you can I know. a few of the expenses energy expenses you won'' t have the ability to pay with the credit. card so you'' re gon na do your food your groceries right diapers you name it put. it all on the credit card now why we do this is with the charge card we put on'' t. typically pay any interest right away on those costs usually there'' s a hold-up.
of 21 to 30 days where the interest in fact crews all the expenses and.
expenses on the credit card so what we'' re doing is we ' re parking all of our. costs on the credit card and we'' re leaving the balance at$ 5,000 on the.
house equity credit line as long as possible so that the interest.
estimation on the second line HELOC is based upon this as long as possible so let.
me paint out another hypothetical and I believe this is where you people going to
. Comprehend the power of the speed banking technique let'' s state on the. day of the month all right your income comes in$ 5,000 just theoretical illustration.
I simply want to offer you men right which that earnings enters into settling.
the HELOC all right and after that you'' re utilizing your credit card to do all
of your. expenditures alright this is your charge card now back.
to the other example of having a 10,000 dollar balance on your house equity line.
for the charge card we'' re gon na completely settle the credit card.
leaving the no and we'' re gon na raise the expenses simply a bit let'' s say your. costs at $3,000 right now our balance went up to$ 8,000 fine however this is the. third this is on the 30th day right on the 30th day we have an
$ 8,000 balance. on the HELOC however guess what the next extremely day is another first day. when our earnings enters into the house equity line of credit right so type of
. refreshing here we have our 8,000 that we began with the $8,000 balance this. time we put in $5,000 balance in the next month this balance is now $3,000.
again for the next 30 days because all of our expenditures that we'' re doing is on a. credit card so the concept here is that we wish to put our expenditures on a limbo.
where all of our expenses are not crewing an interest and we'' re
not. Drawing any money out of the HELOC until the 30th day the day between the.
day and the 30th 30-day the balance was sitting at $3,000 right and the banks.
are gon na compute the interest based upon the $3,000 balance rather of 8,000.
or 10,000 dollars does that make good sense so that $5,000 worth of distinction there.
in terms of the keylock balance that'' s gon na save you amazing quantity
of. cash in regards to the interest and any interest that you ' re not paying because. of this result that money can now add to the primary balance of a.
HELOC even more so on a monthly basis you'' re gon na see a compounding impact all the
. cost savings you get since of this loop that we found regarding how the bank. determines the interest when it concerns the average daily interest so that'' s a. little bit of a secret variation of the strategy that I frequently wear'' t share
on. YouTube however there you go you men have it however I also want to show you this.
circumstance with the first lien position he'' ll on so just like with the second. lien position last circumstance this time we have actually a.
mortgage fine home mortgage and we have our bank account okay.
rather of getting a HELOC on top of the existing home mortgage we'' re gon na go and. entirely change the home mortgage with a HELOC so you no longer have a home mortgage.
so to speak a standard 30-year repaired or a 15-year repaired you now have a HELOC.
and what you'' re doing is you ' re dumping all the cash into the HELOC you ' re. putting all of your cost savings into the HELOC and I understand some of you guys are. looking at me and saying Sam that'' s crazy I am NOT gon na put all my cost savings.
into the HELOC but my argument there is well what is your cost savings account truly.
paying you like point no to 5 percent right point one percent I suggest.
the inflation is at 2 percent right now so technically you'' re losing and.
your money is deteriorating away on inflation so instead of attempting to conserve money with.
it saves account ideal why not throw that extra cash into the house equity.
line of credit where you can potentially conserve anywhere between three to 6.
percent Interest because now you'' re not having to pay the interest on the quantity. of savings so if you ' re taking twenty thousand dollars and I ' ll
usage a. various color for this let'' s say you have a cost savings account that was once. making you possibly like point 2 5 percent APY right you'' re
taking let ' s. say twenty thousand dollars of your cost savings and you ' re moving and.
making a primary decrease on the home equity line of credit therefore now you'' re. not having to pay whatever 3 or three to six percent on that twenty.
thousand dollars does that does that make good sense so instead of focusing on.
okay I would I want to make point 2 five percent on my savings account where.
literally it'' s registering your way by inflation now you move it over to.
the house equity credit line where once again keep in mind the whole open-ended.
conversation we had earlier you can still take the cash out of the house.
equity line of credit when you genuinely require it however right now it'' s just sitting. your cost savings account not doing anything for you right so instead take that.
amount the savings you have actually put it on a home equity line of credit where we can.
later still access it whenever you wish to right and get the cost savings you require.
with the house equity credit line so that'' s the very first lien HELOC method I. really love the very first lien heel off because as soon as you pay off your mortgage.
or in this case settle your he lock you will have an open first lien he lock.
where you can go and purchase all the rental properties you can buy companies you.
can purchase other things where it might yield more than three to 6 percent on.
If, the interest so the first thing he lock absolutely gives you more liquidity.
you see more safeguard during an economic downturn which I have an entirely.
separate video regarding how a first lien he lock can in fact secure you from a.
economic crisis and gives you liquidity for future financial investment and also offers the.
capability to smash the like button by the method and turn that like button listed below and.
even with the very first lien he lock you can introduce the charge card into the.
photo where you'' re doing all of your costs best gas groceries kids.
expands all the everyday expenses that you'' ll do you do it on the
credit'card. so you ' re gon na rack up balances on the credit card however keep in mind all the.
expenditures and expenditures that you do on the credit card won'' t accrue
interest. into the next billing cycle so for 21 to thirty days of a grace period with your.
charge card you'' re letting the he locks it at a much lower balance so that the.
interest calculation on the HELOC is on a lower balance rather of the higher.
If you have not put all of your income into the house equity line of, balance.
credit this is why I think that the speed baking method is in fact.
much better than doing additional payments since if you do extra payments of let'' s
say. 300 or 500 dollars it'' s just decreasing your principal quantity and it'' s. determining the interest based upon a 300 or 500 dollars decrease however with the.
speed banking the interest calculation is on the entire income that.
you put into the home equity credit line and you still get to use that.
cash once again and permitting your expenses to not accrue any interest while it'' s. being in your credit card so pals this is the very first lien and the second.
lien HELOC speed banking method and I also throw some golden nuggets in.
there with the entire credit card to the mix my clients and I call this the.
hybrid strategy where ideally you desire the charge card to offer you points.
and cash back so if your costs are 3 thousand dollars a month and you.
put that on a charge card that offers you points however now you'' re settling the. charge card with the HELOC so you don ' t owe any interest on the charge card so. you actually get paid to do this method in reality I have a student right.
now that'' s utilizing this very method as we. speak and what they'' re earning on the charge card the points and
the cashback. is overriding the interest that ' s happening on the HELOC so it'' s a net.
no result where the charge card is paying them enough points and enough.
money back to where the interest that they'' re paying on the HELOC it'' s getting. Since of the credit card which is unbelievable, paid for.
so that'' s the speed banking technique on a nutshell certainly have more.
videos and webinars where I go even deeper as to how the equation works in.
terms of mathematics behind the mathematics and also how you can utilize the HELOC as a.
defense against a few of the damages from the economic downturn and likewise I'' ll show.
you how to use a HELOC to then buy more rental residential or commercial properties increase your income.
expand your cash flow Empire I'' ll have those video links down in the video
. description down below now my doubters viewing this asking questions like this.
will never ever work this doesn'' t make any sense.
isn'' t the HELOC rate of interest variable aren'' t HELOC rate of interest higher how
. does that make sense ideal why are we utilizing a higher rates of interest HELOC to.
pay off a lower rate of interest home mortgage right well with a very first lien position.
HELOC a lot of times the rate of interest is really similar to a lot of the.
30-year repaired in truth I had one of my students simply close their first lien.
HELOC on a 3.75 percent and they fixed the rate for the next 5 years and.
it'' s also on LIBOR so it ' s substantially lower than the federal fund rate and.
If the bank shuts down my HELOC or what, another concern I often get is Sam what.
if they freeze it or I'' m not able to get my money out of the HELOC well that has.
more to do with what occurred back in 2008 through 2012 where banks were.
Offering out 100% funding for the purchase of residential or commercial property and.
banks were providing out crucial locks as a bonus for the house owners and house buyers.
Undoubtedly back in 2008 through 2012 a lot of individuals that had a HELOC were.
already tapped out they were over leveraged they had way too much debt so.
clearly it makes sense for the banks to shut them down along with liquidate.
their HELOC and shut them down but my overall tip in my viewpoint is that.
if you use this technique to pay off your home loan much faster as long as you'' re within.
seventy percent loan to value once again simply my opinion you'' re gon na be rather in a.
safer position than certainly the folks that had a hundred percent or 120.
Percent debt when compared to their house worth another thing is with the.
position HELOC I typically seen from my research that a first-in HELOC has less.
opportunity of a foreclosure the line of credit getting frozen or shut down.
since the first lien position HELOC is deemed to be less risky in the eyes of.
the bank I mean it'' s the only lien or a loan on the home and that'' s the only.
Payment that the debtor has to make so from the bank'' s viewpoint a.
thing HELOC is certainly less dangerous than a second lien HELOC although if you.
use a second lien HELOC effectively you can avoid some of the negative scenarios.
that I just described a minute ago all ideal so you stayed to the end so.
I do want to give you guys a free calculator and this is where you guys.
are gon na go and get the calculator so it'' s chop my mortgage.com so go to chop.
my home mortgage calm it'' s gon na actually forward you to another website called.
sped up banking calm we similar to chop my home mortgage calm since it sounds.
obviously simpler to keep in mind go to slice my home mortgage calm and download our Excel.
calculator for free to punch in your own numbers to see just how much money and time.
you could potentially save and the calculator does support both sucking.
lien position HELOC as well as the very first lien position HELOC also so you can.
sort of have fun with both numbers and see what develop better and after you.
download the calculator I'' ll go and invite you to a free 50 minute class.
where we go deeper into how does the velocity banking technique in fact works.
how does it protect you from a prospective economic crisis and next five or 10 years how.
can you utilize that method to purchase more rental homes as well as broadening.
your equity and your monetary empire so as a present for staying to the end.
go to slice my mortgage com download your totally free calculator and I'' m looking forward.
to seeing you in our totally free 15 minute class make certain to sign up for our.
channel as we are the top HELOC channel as of now and we share lots of.
ideas on how to settle your home mortgage much faster as well as buying rental.
residential or commercial properties and buying property so definitely go and inspect out those.
videos and I'' ll see you people in another videoAs discovered on YouTube – Creative Commons License.