Hazeltine LLC offers traditional financial solutions outside of the banking / Wall Street matrix. We educate our clients on time-honored, traditional strategies that give them back control of their capital using the Infinite Banking Concept, a process for becoming your own banker.
Пікірлер
I can't get approved of HELOC because of my low Uber driver income
First lien HELOCs can be difficult to quality for. Hopefully, you'll find a way to increase your income to the point that you do qualify.
If you'd like to learn more, schedule time with us: www.calendly.com/tradfinance
I was wondering why are financial Institutions more willing to close a 2nd lien HELOC. I don't understand why a 2nd lien is more risky than a 1st.
Great question! I wish I knew, but my speculation is: force of habit, mostly. I imagine many banks don't know how to source the right customer to make the 1st lien HELOC a valuable product, and they don't understand velocity banking. For the way a HELOC is typically sold and utilized, a 2nd position HELOC makes more sense. It's typically a smaller line of credit and used like a credit card. That use case wouldn't make sense with velocity banking. Technically, being in 1st position is less risk for the bank because they are the first creditor in line to get paid if something goes wrong. You can imagine a scenario where a customer has a first position mortgage and a 2nd position HELOC; they get foreclosed on, and the mortgage lender gets paid back first, but the HELOC lender doesn't get paid back if the collateral doesn't cover the shortfall.
@@HazeltineLLC Wow, thanks for the knowledge. As the saying goes, if you ain't first, your last. Makes complete sense.
To learn more, schedule time with us: www.calendly.com/tradfinance
Great explanation like always. I put all my bills and expenses on a credit card and pay before the interest and stack up on flyer miles for free. Then pay off cards at the end of the month.
Excellent - that's how you do it! Have you ever looked at Ask Sebby's content on maximizing credit card rewards?
@HazeltineLLC i will check it out. Thanks again
Great information like always. Can't wait for part 2
Awesome, glad you enjoyed it, and thanks for commenting!
If you'd like to learn more, schedule time with us: www.calendly.com/tradfinance
Thanks for using my comment to start this video. Unfortunately I could only watch 13 minutes. There is so much wrong with the conversation up to that point it’s not even worth the time to detail it. I wish you and your guest good luck in the future. Even more, I wish the best luck to any clients you have….they are truly going to need it.
I appreciate your engagement anyway. It's ok for us to disagree on financial strategies. Best of luck to you as well, and thanks again for commenting!
If you'd like to learn more, schedule time with us here: www.calendly.com/tradfinance
Would 1st lien HELOCs be frozen if/when stock or housing market crashes? If so, one could not use their line of credit but would still be required to make monthly interest payment. Scary times.
Quite the contrary - if you watch my interview with Andy Brown, he had the All-in-one loan (very similar to the first lien heloc) during the 2008 housing crash. Not only was his HELOC not frozen, it provided him very important liquidity and helped him to weather the financial storm. In fact, he said it saved him financially during a very difficult time. Even if the line were frozen as you suggest, then it would work exactly like a mortgage. You'd have a required payment but wouldn't be able to pull anything out. It's interesting that people are quick to jump to worst case scenarios when presented with unconventional strategies. Yet when presented with conventional strategies, nobody ever seems worried about these same worst case scenarios. It seems to me people are just looking for an excuse to adopt the conventional wisdom.
If you'd like to learn more, please schedule time with us: www.calendly.com/tradfinance
Thank You!
Thanks for watching and commenting!
Fantastic show Logan!
Thanks for having me, Brian!
To learn more, schedule time with us: www.calendly.com/tradfinance
So how do you make chunk payments with 1st lien
The same as with any other HELOC. Unless you're talking about making chunk payments on your mortgage - the first lien HELOC takes the strategy of making "chunk" payments from a 2nd position HELOC to pay down your mortgage to its logical conclusion. The first lien HELOC replaces your mortgage, so there would be no mortgage payments to make. Is that your question?
To learn more, please schedule time with us: www.calendly.com/tradfinance
Do you have a video on first lien heloc being used in conjunction with infinity banking strategies? Thanks
Thanks for your reply! That is one I definitely plan on doing but don't have posted yet. Stay tuned . . .
Thank You!
Of course, thanks for your engagement!
To learn more, schedule time with us: www.calendly.com/tradfinance
Props for doing your due diligence in reaching out and trying to set up a public discussion with the guy. Keep calling out the nonsense, that's all we can do. It's never a good look when someone deletes your comments on an article posted in a public space. That's equivalent to censorship in my opinion (as long as the comments weren't abusive, which I highly doubt they were considering how you guys are quite respectful in your disagreement.)
Thanks for your reply and support, Ian!
Great video. How many people do you know that have successfully done this? Also, what if you figure paying that same extra $3k on the amortized model?
Thanks for your reply! I know quite a few people who have or are successfully using this. The person who introduced me to First Lien HELOC paid off her house in less than 3 years. In another video, D'Andre and I compare making extra payments on a mortgage to using velocity banking. There are several problems with paying extra on the mortgage: first, you will still have your required mortgage payment, which includes a substantial amount of interest. Second, you can't pull that extra payment back if you need the money, hence why most people (correctly) wouldn't put large amounts of money toward the mortgage.
If you'd like to learn more, schedule time with us: www.calendly.com/tradfinance
2. Scenarios To enable a fair comparison, scenarios must be comparable. Hence what must be compared is A) Using a 7.5% HELOC to pay back 222K$ using all available cashflow as you suggest B) Using the 4% mortgage to pay back 222K$ using all available cashflow Just for reference, yes there could be the C) “do nothing” scenario where the person simply pays back the mortgage according to schedule (as you have done initially) Now B is the most cost efficient of these scenarios, as the person will end up paying less interest and pay his debt quicker than with A. To give a sense, in the first year alone the person would save over $5 000 in interest with scenario B compared to scenario A. You’ve agreed with that in this video, so that is fine With regards to scenario C, yes the person will pay more interest over the life of the mortgage if he keeps it for 22 more years. BUT it should also be noted that over the course of the 5.8 or so years (you have 5.83 in your vid) that it would take to pay back the HELOC loan using all available income, in scenario C he would accumulate some 190K$+ (that he would presumably invest to generate some income even if just in a deposit account with a fixed rate). At the end of the 5.8 years he will have an outstanding mortgage debt of about $175K (meaning he could basically pay back the debt if he wanted to and be left with 15K$ + whatever gain/interest he accumulated on his investments). This is because in scenario A he directs over $4100 to paying down the debt every month, while in scenario C he only directs about $1300 per month to the debt, leaving him with $2800 cash every month. Note that as per your own XL (initial video, 36:00) , the HELOC first month interest is 1387$ where as at that point in time (8 years into the mortgage) interest on the 222K$ remaining on the mortgage would only be $742. Even though the person is directing more money towards paying down their HELOC debt, the first ~3.5 years they will be paying more interest every month with the HELOC than with the mortgage In summary, with such a high interest rate difference between HELOC and mortgage, it is more financially advantageous to pay extra on the mortgage or even, alternatively, to set aside the money that otherwise would be paid into the HELOC and decide after 5 to 6 years whether you want to pay down the mortgage with these savings. Scenario A (HELOC): Loan paid off in 5.8 years, total interest paid ~ 50K$, no cash on hand Scenario B (extra payments): Loan paid off in 5 years, total interest paid ~24K$,no cash on hand at the 5 year point, ~40K$ cash on hand at the 5.8 year point Scenario C (no extra payments, no HELOC): After 5.8 years, mortgage debt of ~175K$, interest paid during 5.8 years ~ 48 K$ cash on hand ~190K$ + gains/interest earned Scenario A is worst, what to choose between B and C is debatable depending on priorities and preferences
6 Interest on mortgage You ask where I came up with the figure of $1687 in interest on the mortgage. This comes from your original video at 36:00 you show a spreadsheet where this number appears under the heading “interest payment”. You’ve corrected that in this video. It is a minor point
5 Risk You ask what is the extra risk. Well for starters, HELOC rates are subject to increase, a risk which is non existent with fixed rate mortgages. Yes rates could also decrease, but we are talking risks. Secondly other HELOC conditions (such as total amount) could be changed by the bank. Thirdly, to echo your psychology point, having a reserve of money handy can be risky for some people, as it will be hard for them to resist the temptation to use it and spend it on the latest gadgets or whatever.
4 Psychology HELOC works better for some people because of intangible psychological factors, for example it motivates them to act and address their debt. This is probably the strongest argument for VB. If people are willing to act even though it costs them more, it is their choice. If this is the way they want to manage their debt, even it is less cost efficient, yes I agree with you, it is still better than doing nothing
3 HELOC advantages You say that the advantage of HELOC is that it is a reserve of money that can be used in case of emergencies. Again fair enough. However the cost of this reserve is quite high (again over $5 000 just for the first year) IF the person needs such a reserve then there is nothing keeping them from having a HELOC, not using it (except for emergencies) and instead paying extra on the mortgage and thus saving the extra interest due on the HELOC Note if the person uses the “reserve” that increases his interest costs, his total debt and therefore delays the eventual repayment of his HELOC/mortgage Another advantage you cite for the HELOC is “automation”. Well it is possible to automate extra mortgage payments as well.. But in any case an extra mortgage payment is an operation to be done once a month which requires just a few minutes so it is not that complicated. And if you “miss a month” of extra payment, it is not a big deal, it would just cost you about $10 of interest for that month.
I see there is a response video to some of my comments here. It is much appreciated, but for some reason comments posted on the response video do not appear A short version of my comments is below. Longer version available This person has about $2 800 left over every month. Mortage payment of about $1 300 per month, 222K$ left on the mortgage with 22 years to go In summary, with such a high interest rate difference between HELOC and mortgage, it is more financially advantageous to pay extra on the mortgage or even, alternatively, to set aside the money that otherwise would be paid into the HELOC and decide after 5 to 6 years whether you want to pay down the mortgage with these savings. Scenario A (HELOC of 222K$ at 7.5%): HELOC paid off in 5.8 years, total interest paid ~ 53K$, no cash on hand at that point (as per this vid) Scenario B (extra payments of $2 800 per month to the mortgage at 4%): Mortgage paid off in 5 years, total interest paid ~24K$,no cash on hand at the 5 year point (as per bankrate mortgage calculator) , ~40K$ cash on hand at the 5.8 year point Scenario C (no extra payments, no HELOC): After 5.8 years, mortgage debt remaining of ~175K$, interest paid during 5.8 years ~ 48 K$; cash on hand ~190K$ + gains/interest earned on the money put aside Scenario A is worst, what to choose between B and C is debatable depending on priorities and preferences
1 Loan amount Your original video compared a 270K$ mortgage to a 222K$ Heloc. You say this is because the HELOC was considered after this particular person was 8 years into their 30y mortgage and only owed 222k$ at that point. Fair enough. But your original video SHOULD have compared a 22 year mortgage with debt of 222K$ vs a HELOC on $222K
Gentlemen First of all thank you for your response. It is much appreciated for you to put this time and effort to address objections and certainly is a good sign of your seriousness. This said, there are still points to be addressed. I’ll try to summarize though your video is quite long so apologies in advance if my text is also long. Hence I will break it down into parts For simplicity I will round numbers
Thanks for your reply and engagement! Way too much for me to respond to within the context of a comments section, so we'll probably do another video, but thanks again for commenting.
Gentlemen First of all thank you for your response. It is much appreciated for you to put this time and effort to address objections and certainly is a good sign of your seriousness. This said, there are still points to be addressed. I’ll try to summarize though your video is quite long so apologies in advance if my text is also long. Hence I will break it down into parts For simplicity I will round numbers
Great Video, where can I get that excel spreadsheet? thanks
Can't publicly share the spreadsheet with you; it's for ambassadors only. If you schedule time with me, we can run your numbers. Otherwise, you can do some simplified calculations using the firstlienheloc.com website. Thanks for your reply and engagement.
firstlienheloc.com/calculator/
If you'd like to learn more, schedule time with us: www.calendly.com/tradfinance
Can I see the video series you produced? Ohhhhh !!! You have none???? Ok. Then, I bashed him 15 years before I started selling. Leave the Kool aid cup at yhe front desk on your way out.
Thanks for your reply and engagement - I think this was meant as a reply to @theunit5939 below, correct? Looks like you added it there.
@@HazeltineLLC you got it. I have listened to 70% of your content, and recommended it to fellow industry members as “must listen” material. Love the deep dives. Thanks for your efforts they are much appreciated.
@@siulanainad Thanks so much for the kind words, and sharing my content with others, greatly appreciated!
And how did Dave make his millions? He made the money selling information about how to get out of debt. Not from investing but by teaching and courses. Then he started investing all those funds into several things. Then he made a return on those investments. The bulk of his networth is not from returns but his original money. No different than a chain supermarket owner or a toilet cleaner franchise owner. I have no respect for his investment advice. More respect for his marketing abilities. Lose your job and have a $1000 emergency fund? Good luck. Pay off debt in full and go on a high wire act with no net because you wannabe debt free? Ok good luck with that if you get disabled short term, go to the grocery store and scream I'm debt Free!!!! I don't have cash to pay but I did what Dave said. No groceries for you. Dave says he went bankrupt when he was an over leveraged real estate guy. I have a theory that an agent sold him a poorly dedigned $1Million whole policy that he couldn't pay or a universal flex market investment deal and that's why he hates the product. And his over leverage history shows he is highly emotional and extreme risk taker advising people he doesn't know after a 1 minute conversation on a radio show. Yeahhhhhh, that's not risky AT ALL ....right ...
Thanks for your reply and engagement! I agree that Dave Ramsey didn't get rich by buying mutual funds; he became wealthy by becoming an entrepreneur doing something he's passionate about (getting people out of toxic debt). I also agree that paying off debt, in some circumstances, can be more risky than not paying it off (debt freedom doesn't equal financial freedom). Like you, I respect Dave Ramsey's marketing ability and his verve and perseverance in succeeding as an entrepreneur. For those who are struggling with toxic debt, I think he gives some great advice. For those with financial discipline, I'd say you should probably look for advice elsewhere.
If you'd like to learn more, schedule time with us here: www.calendly.com/tradfinance
Velocity banking is a scam. It’s just complicated enough to lose the common person not willing to do the math. In some situations it may be slightly faster to pay off debt then just paying more each month but just barely. For example you may pay off a house or car 1 month faster. Some scenarios it’s actually slower. If you want to pay off debt just payoff your debts as fast as you can by putting ALL of your available cash towards the debts. That’s all you have to do. No need to do velocity banking.
Thanks for your comment and engagement, it's greatly appreciated! It's true that, if your only goal is to pay off debt, there are multiple ways you could potentially do it. I would say that velocity banking is a lot more than just paying off debt more efficiently. I would use velocity banking even if I had zero debt.
@@HazeltineLLC the only thing I’ve seen people use Velocity banking is for paying off debt. Do you talk about those other uses in this video?
@@redman2751 Not really - this video is answering specific objections, most of which center around misunderstandings of how interest is calculated. I primarily focus on Infinite Banking, not velocity banking, so I haven't done any videos on other uses of velocity banking. My clients have used velocity banking to fund Infinite Banking policies as well as real estate investments, as examples. There are some videos out there that cover strategies like these.
@@redman2751 Here's an example of using a HELOC to fund a whole life policy: kzread.info/dash/bejne/h5ptldaiptfbeMo.html
@@HazeltineLLC You would use Velocity Banking to accomplish what? Show an example with numbers.
If you'd like to learn more, please schedule time with us: www.calendly.com/tradfinance
If one has a HELOC and the housing market crashes and bank freezes your line then what. You can't draw from it And you still must pay the monthly payment. Thoughts.
Thanks for your reply and engagement, very much appreciated! I will be posting an interview with Andy Brown, one of the loan officers for the all-in-one loan, very similar to the first lien HELOC. He took out his line in 2007; pretty much the worst possible timing. The solution worked beautifully for him through the crash, and provided him with extra liquidity to help him through it. So historically, banks haven't frozen first lien HELOCs, even in the worst case scenario. I believe it is theoretically possible, however, that if there were a major housing crash, the bank could freeze your HELOC. It's interesting though, that people only bring up these worst case scenarios when being presented with alternate solutions; they never seem to have any of these questions when it comes to the standard approach. It makes me think they're just looking for a reason to reject it, in order to avoid seriously considering it. All of the standard Wall Street approved solutions would be greatly damaged by a crash, yet no one seems bothered by this obvious risk. I would say this scenario is much less likely with a first lien HELOC though, because there's less risk to the bank than a standard 2nd position HELOC. I would also say, if the market were to crash, you could always draw your HELOC, and if the bank were to freeze it, you still got your money out. The question as always is "as compared to what?" I think in almost every situation, doing velocity banking with a first lien HELOC will put you in a better position than the standard approach; that doesn't mean there are no drawbacks, though.
In a traditional loan your house just lost half it's value and your contracted to continue to pay regardless of its value because u signed on the dotted line. With heloc yes your loan will be adjusted but you will still be able to have access ro your equity and pay the house off in record time. The question is a valid question but the truth is what difference does make? You have no control. You still need to pay exactly the same either way. I had a 15 year @1.75% interest which is the lowest interest rate in history that I know. I closed on a first lien with 7.75%. Not only will I pay my house off in 5 year's I also save 75% in interest without changing any of my spending habits. The man that came over with the papers for me to sign to close on my house had a weird look on his face as he was giving me papers to sign. In his 15 year's he has never closed on a first lien heloc. He was hired by the bank I used that only does first lien helocs. That confirmed that many people have no idea about this type of loan. The truth is we have been programmed and told only about a traditional loan. Why? Because banks make 100% on a 3% loan why would they ever want you to learn about a first lien that can help speed up your financial freedom.
@@icon5892 Wow that's interesting - congratulations on starting your first lien HELOC! If you had gone through the first lien HELOC program, that's really all they do, and it automates the whole velocity banking program. So it sounds like the bank you're working with doesn't really specialize in first lien HELOCs, certainly not velocity banking.
@HazeltineLLC The bank I used was first saving bank. They only do first lien helocs. I was first skeptical like most people. I did a zoom call with D'Andre and went over the number's. I ask all the questions the good and the bad and said this loan is for me. I have tried to convince many people about this loan and for some odd reason it doesn't resonate with them. Most people say well why isn't everyone doing this? I believe most don't know about or they don't understand it.
@@icon5892 My thoughts exactly - why isn't everyone doing this? There are many answers to that question, of course. Glad to hear you're working with D'Andre!
Great breakdown! You guys are awesome. Look forward to working with you guys one day soon.
Thanks - I look forward to that day as well!
IS LIKE GETTING CASH VALUE LIFE INSURANCE .IS NOT A SCAM.
@@passivebusinessmoneyinvest8810 Not sure if this is a real comment or a bot? But appreciate the input.
Great job from Tallahassee Fl🎉
Thanks so much for the kind words, it's greatly appreciated!
If you'd like to learn more, please schedule time with us: www.calendly.com/tradfinance
I wonder why there is NOT an apples to apples comparison... So you are comparing a $270K mortgage (at 4%) to $222K Heloc (at 7.5%) ..... For starters who pays for the remaining 48K$ ????? It is being claimed that the HELOC replaces the mortgage. Which bank allows you to replace a 270K$ mortgage loan with a 222K$ HELOC loan ???? What universe is this from ? Second in the spreadsheet for the mortgage , a payment of less than $ 2 000 is made monthly vs a payment of over $4 000 monthly for the Heloc Why did you not compare the SAME payments in both cases , hmmm ??? As if this were not enough, the spreadsheet claims for month 1 of the 270K$ mortgage the interest payment is 1687$. This is wildly incorrect. The correct interest is about $900 (much lower than the HELOC interest at some $1400 even though the amount of the HELOC is only $222K).... Obviously the HELOC interest rate of 7.5% has been used to calculate interest for the 4% mortgage. At best this is an error. So basically, as is to be expected , the HELOC costs much more in interest and is not cost efficient The reason that the debt is paid more quickly in the stacked up HELOC case is that the debt is (magically) not only lower to start with, but also that the monthly payments are much higher. It is not rocket science, paying more each month will eliminate debt quicker Paying more each month on the mortgage will eliminate the debt even quicker and cheaper than using an expensive and risky HELOC
Thanks for your reply and engagement. I have another video on the way with D'Andre Clayton which shows how making extra payments on the mortgage is not as efficient as using a first lien HELOC. If you make an extra principal payment on the mortgage, you still have the required monthly payment to make, which includes a large percentage of interest.
A total non starter Replacing low interest (mortgage) by a higher interest debt (HELOC) that is not even fixed rate (meaning the interest is likely to climb and generate even more costs) is a terrible idea Claiming that you will pay your debt back in seven years instead of 30 by using a HELOC is at best disingenuous, at worst a terrible lie What accelerates debt payment is making extra payments (above the regular monthly payments).. That is what is being done with that HELOC... The same can be done more cheaply and with less risk with the mortgage Re interest, that 3% mortage is going to cost about $9000 the first year (if making no extra payments) whilst the 4.75 HELOC (taking into account the monthly deposit of $10 000 income) it is going to cost over $13 500 (again if making no extra payments)... A net loss of about $4500 that year alone .... that loss is going to slowly go down each year (as principal is reduced) but the HELOC will cost more in interest right up to the last year of debt If you do make extra payments, the mortgage will STILL cost less in interest than the HELOC. What does the HELOC provide? The only thing it does provide is saving of interest on part of the $10 000 deposited each month (depending on when the bills are paid)... In the very best case scenario that is still less than $500 per year ($10 000 at 4.75% HELOC rate) ... But the 1.75% difference in interest rates between mortgage and HELOC generates a cost of over $5 000 for the first year (so over 10 times more)... It makes no financial sense to pay $5 000 to then save less than $500... Would you exchange a $10 bill for a $1 bill ? And somehow the over $1000 monthly interest to be paid for the HELOC seems to have been forgotten in this video as we are told that expenses are $7000 before the HELOC and those $1000+ are never added in
Thanks for commenting and engaging. D'Andre and I have another video coming out where we'll show that making extra payments on the mortgage is still less efficient than using a first lien HELOC. When you pay extra principal on the mortgage, you still have the required mortgage payment to make, which includes a large amount of interest. Also, when you make extra principal payments on the mortgage, you lose access to that money. Whereas, when you pay down your HELOC, you still have access to that money if you need or want it. Hence why you can run your cashflow through your first lien HELOC, but obviously this strategy wouldn't work with a mortgage because you couldn't pull the money back out. Velocity banking is not just about paying off your house faster, although it can do that.
So if I understand this correctly, once I hit year five I can borrow money, still get interest on my full balance and use the borrowed money to make other investments? Wouldn’t I just put the borrowed money back into my account, increasing the base, then borrow more, repeat the cycle and bankrupt the company?
Actually you can take out a policy loan and do what you described in year 1 - you just won't have access to as much cash value. If you repay the policy loan ("put the borrowed money back into the account"), and then pull it right back out again, that would be a zero sum game. It'd be like paying down your HELOC, then pulling the money out again, etc. When you repay a policy loan, it doesn't "increase your base". If you make a premium payment, on the other hand, that does increase both cash value and death benefit. The amount of premium you can pay, however, is always limited by the policy structure. Please read "Becoming your own Banker" by Nelson Nash before commenting any further. If after gaining a basic understanding of banking and whole life, you have some questions, then we can talk. But answering these sort of comments is not the best use of my time.
@@HazeltineLLC thanks for the explanation. Ah, right, Nelson Nash. I came across his book when I saw a video about using Infinite Banking to borrow money at 5% to then re-invest it at 4%. Since that is abject nonsense, I decided I would not waste money on Nelson's book if that is what he was teaching. I would gladly read the book, I am just not going to pay for it.
If you'd like to learn more, please schedule time with us: www.calendly.com/tradfinance
What about using a Reverse Mortgage instead of a HELC?
You could absolutely do velocity banking with a reverse mortgage rather than a HELOC, and that's a great point!
If you'd like to learn more, schedule time with us: www.calendly.com/tradfinance
I have a rewards credit card that I pay all my bills with and then use my heloc to pay off the credit card every month.
Yes! Exactly what you should be doing! Are you familiar with this site? www.doctorofcredit.com I net about $300 per month in extra cashflow by strategically signing up for credit cards and bank accounts and collecting the bonuses on a regular basis. If you can stay organized with your finances, it's a total no-brainer; everyone should be doing it.
If you'd like to learn more, schedule time with us here: www.calendly.com/tradfinance