WEBVTT - Refinancing Your Home: Understanding HELOCs and Making Smart Financial Decisions

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<v Speaker 2>Matt for you.

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<v Speaker 3>For the person who may be watching and they're afraid,

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<v Speaker 3>what advice do you have for them? And then is

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<v Speaker 3>there anything to just You've adjusted in your home buyers

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<v Speaker 3>blueprint to give them a little bit of confidence that

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<v Speaker 3>it's okay to buy now over the next year.

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<v Speaker 2>So the more you learn, the more you earn. Right,

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<v Speaker 2>the more you learn, the more you earn. And when

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<v Speaker 2>I speak to people about buying real estate, they're more

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<v Speaker 2>fearful in because they don't know nothing or they have

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<v Speaker 2>lack of knowledge. In a couple particular areas. So whoever

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<v Speaker 2>has fear, you got to really do a deep dive

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<v Speaker 2>in yourself and say, why am I scared to buy property?

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<v Speaker 2>Why am I scared to invest? And kind of work

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<v Speaker 2>your way back from there. But I find it the

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<v Speaker 2>more you're putting into your education about home buying, about credit,

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<v Speaker 2>about if you want to do rehabs, if you want

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<v Speaker 2>to do new construction, whatever it is, the more knowledge

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<v Speaker 2>you have, the easier it's going to be for you.

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<v Speaker 2>It's not going to be a better Roses or something

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<v Speaker 2>like that, right, but they'll be a little bit more

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<v Speaker 2>easier for you. But also managing your expectations and try

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<v Speaker 2>to take your emotions out of this. I think Rashad

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<v Speaker 2>had a famous quote. He told me want is no

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<v Speaker 2>emotions in anything basically, right, I'm paraphrasing he says something different.

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<v Speaker 2>I can't remember word for word, but basically, you got

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<v Speaker 2>to take your emotions out of the real estate game

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<v Speaker 2>or anything investing.

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<v Speaker 3>Right.

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<v Speaker 2>You got to look at you got to look at

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<v Speaker 2>even if you're buy your first home, looking at this

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<v Speaker 2>as an investment for you in the future, and buying

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<v Speaker 2>the property as if you're an investor, and making sure

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<v Speaker 2>you buy and right, So as long as you do that,

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<v Speaker 2>then you shouldn't have fair.

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<v Speaker 4>So Mo and then Matt, you can chime in it

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<v Speaker 4>on this if you can well home refinancing, right, can

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<v Speaker 4>you just let's give an overview of refinancing. And for

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<v Speaker 4>the person that might be thinking about refinancing, they might

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<v Speaker 4>have heard it on television, but they kind of a

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<v Speaker 4>little nervous. What advice could we give somebody that's out

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<v Speaker 4>there that might have a home and is considering taking

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<v Speaker 4>the refinance route.

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<v Speaker 5>I've actually been having a lot of people want to

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<v Speaker 5>refinance because of that record equity, even before the rates

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<v Speaker 5>started going down a little bit. I think it really

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<v Speaker 5>takes you to analyze what's good for you. If you

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<v Speaker 5>have a two point seventy five rate, we got to

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<v Speaker 5>figure out why do you want to refinance? Like if

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<v Speaker 5>Matt said, its owner occupied and what have you? In

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<v Speaker 5>the rate is just over six percent, you're going to

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<v Speaker 5>take your current balance up a notch to the current rate.

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<v Speaker 5>So what does that actually look like? What are your

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<v Speaker 5>reasons for refinancing, what will you benefit from and does

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<v Speaker 5>it financially make sense? I think that's probably the biggest

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<v Speaker 5>assessment we're making. We're doing assessments for people to see

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<v Speaker 5>what makes sense. Does it make sense to take the

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<v Speaker 5>equity out with the heat locker, Does it really make

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<v Speaker 5>sense to do that? Refine and making sure that they

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<v Speaker 5>don't make a decision that isn't good for that long game.

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<v Speaker 4>So the home equity lot of credit for people that

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<v Speaker 4>aren't familiar, that is okay. So you buy a home

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<v Speaker 4>and it's worth you buy a home for three hundred thousand, right,

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<v Speaker 4>and then five years at home is worth six hundred thousand,

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<v Speaker 4>So you effectively have three hundred thousand dollars of profit

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<v Speaker 4>inside the home baked in, right, But you can't do

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<v Speaker 4>anything with that unless you tap into it. So if

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<v Speaker 4>you refinance it, right, you effectively get a new mortgage

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<v Speaker 4>in a sense you're at it either a higher or

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<v Speaker 4>a lower interest rate, depending on where the interest rates are.

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<v Speaker 4>But you can take out that three hundred thousand dollars

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<v Speaker 4>and use it for whatever you want, right and then,

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<v Speaker 4>But if you get a he lock then that's just

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<v Speaker 4>a line of credit where if you need to take

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<v Speaker 4>fifty thousand, you could you have three hundred thousand dollars

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<v Speaker 4>available or like two fifty because I don't think they

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<v Speaker 4>give you one hundred percent, right, and you can use

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<v Speaker 4>up to like, let's say, two hundred and fifty thousand dollars,

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<v Speaker 4>as you choose. But if you don't need to use it,

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<v Speaker 4>or if you don't need to use the whole thing,

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<v Speaker 4>then it's like a lot of credit that you can

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<v Speaker 4>use at any point in time, right, correct? But does

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<v Speaker 4>your interest rate change with the he lock?

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<v Speaker 5>Also not the rate on the mortgage you already have.

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<v Speaker 5>So that's why I said it's more of an analysis,

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<v Speaker 5>because if I'll give you an example, my interest rate

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<v Speaker 5>on my mortgage is three percent. Did take out a

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<v Speaker 5>helock right after I did my refinance for two hundred

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<v Speaker 5>thousand because I wanted to have my equity on tap

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<v Speaker 5>when I needed it, So it's sitting there. I haven't

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<v Speaker 5>used that helock yet, but I can use it as

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<v Speaker 5>I need. But I'm going to keep that three percent

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<v Speaker 5>interest rate. If rates or when rates renormalize, it might

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<v Speaker 5>make sense if I use that money to add them

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<v Speaker 5>together and refinance for me personally, But because of where

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<v Speaker 5>my balance is at, it doesn't make sense for me

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<v Speaker 5>to refinance at a higher rate right now because I

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<v Speaker 5>don't have anything to pay off as far as debts

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<v Speaker 5>and things like that. Sometimes if you're refinancing and you're

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<v Speaker 5>going to consolidate long term smart debts, maybe increasing your

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<v Speaker 5>rate works. But we analyze that to make sure we're

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<v Speaker 5>not just refinancing for a sport, is what I like

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<v Speaker 5>to call it, Like what are we doing this for?

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<v Speaker 5>You know, So tapping that equity if that's what you

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<v Speaker 5>want to do to do home improvements, looking at it

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<v Speaker 5>both ways is probably smart from a mathematical standpoint. I've

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<v Speaker 5>looked at some people and I could end up increasing

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<v Speaker 5>their payments by thirteen hundred a month just to get

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<v Speaker 5>them fifteen to twenty thousand dollars. That wouldn't be a

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<v Speaker 5>smart refinance. So I give them alternative options to maybe

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<v Speaker 5>accomplish what they want to accomplish.

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<v Speaker 2>Yeah, So I'll add on to the helock conversation is

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<v Speaker 2>anytime you're doing the home akulina credit, understand it's a

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<v Speaker 2>second lean and you have to be very careful with

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<v Speaker 2>you know helocks in general, right, member, this is the

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<v Speaker 2>church's money, this is your house money. So if you're

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<v Speaker 2>taking out money and you're going to use it, make

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<v Speaker 2>sure you have a plan either investment into a business,

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<v Speaker 2>more real estate, stocks, options, whatever, but understand the risk

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<v Speaker 2>that comes with any type of investment. If you're using

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<v Speaker 2>a helock, it's not guaranteed, especially if you're doing real estate.

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<v Speaker 2>Tennis are not guaranteed to pay you. But I love

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<v Speaker 2>helocks and the amount of equity tappable equity that's out

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<v Speaker 2>there right now is absolutely I mean, it's insane. It's

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<v Speaker 2>record breaking right now. So I would advise anybody right

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<v Speaker 2>now just look into, like Mo said, tap into the equity.

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<v Speaker 2>Even if you don't use it right now, you can

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<v Speaker 2>have it sit on the sideline because right now you

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<v Speaker 2>can't go to your mailbox and put your ATM card

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<v Speaker 2>and get equity out of your home. You have to

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<v Speaker 2>apply for it, and the banks have to be willing

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<v Speaker 2>to do on it. Right they have to have an

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<v Speaker 2>appetite for helocks. Right now, in the current market that

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<v Speaker 2>we're in, banks lenders have an appetite for helocks. So

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<v Speaker 2>everyone who has home and has equity and you can

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<v Speaker 2>qualify for a helock, you should look into taking out

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<v Speaker 2>a helock. Just proceedable caution, make sure you know exactly

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<v Speaker 2>what you're doing, because if the market does go the

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<v Speaker 2>wrong direction, if the banks start seeing there is a recession,

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<v Speaker 2>they might start cutting back on some of these products.

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<v Speaker 2>This happens all the time in the industry with godlines changed.

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<v Speaker 2>So just because something a product is available today at scale,

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<v Speaker 2>it might not be available when you really need it.

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<v Speaker 2>So the best thing you could do is tap into

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<v Speaker 2>that equity so you can reinvest and make more money.

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<v Speaker 2>In my opinion, but everybody.

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<v Speaker 6>An illegal alien from Guatemala charged with repel being a

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<v Speaker 6>child in Massachusetts. An MS thirteen gang member from Al

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<v Speaker 6>just some of the heinous migrant criminals caught because of

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<v Speaker 6>President Donald J. Trump's leadership. I'm Christy Noman, the United

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<v Speaker 6>States Secretary of Homeland Security. Under President Trump, attempted illegal

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<v Speaker 3>Sponsored by the United States Department of Homeland Security,