WEBVTT - The Mortgage Mistake That Could Cost You Everything 0:00:00.600 --> 0:00:05.720 And that's right. Watch market mondays every Monday. You gotta 0:00:05.760 --> 0:00:08.240 put Look, guys, if you first of all, if you're 0:00:08.240 --> 0:00:10.600 in chat right now, how many of you guys got 0:00:10.840 --> 0:00:13.480 ten thousand dollars right now? Type in chat? If you 0:00:13.560 --> 0:00:16.640 got ten thousand and fifteen thousand dollars right now, type 0:00:16.640 --> 0:00:19.400 and chat? And if that's like all your money right 0:00:20.000 --> 0:00:22.400 Not that you folks out here who got green jackets 0:00:22.400 --> 0:00:25.520 on you're part of red Panda, right, because you guys 0:00:25.520 --> 0:00:28.080 are just killing it out here. But there's a big 0:00:28.640 --> 0:00:32.080 market of us of people out here and our followers 0:00:32.080 --> 0:00:34.360 who watch the show that got ten to fifteen thousand 0:00:34.400 --> 0:00:36.760 dollars and all. Honestly, I don't think you should even 0:00:36.800 --> 0:00:39.600 be thinking about home ownership. You can't afford it right now. 0:00:40.360 --> 0:00:42.600 You need to really think about how do I flip 0:00:42.640 --> 0:00:45.320 this money? How do I turn this ten to fifteen 0:00:45.360 --> 0:00:49.320 thousand dollars into thirty thousand and forty thousand, and then 0:00:49.360 --> 0:00:52.640 how can I offset that capital gains? You do that 0:00:52.720 --> 0:00:55.360 by buying real estate, and you do it smart, right. 0:00:55.400 --> 0:00:58.320 You just don't go out here and buy a single family. 0:00:58.360 --> 0:01:01.000 You gotta buy a multifamily because that's going to give 0:01:01.000 --> 0:01:03.600 you more tax benefits and more tax breaks, and that 0:01:03.600 --> 0:01:07.479 can offset that capital gains that you'll get from you know, 0:01:07.600 --> 0:01:09.960 investing and taking from your broker's account to put it 0:01:10.040 --> 0:01:14.039 into the real estate. Right. So I just feel like 0:01:14.080 --> 0:01:15.960 there's a lot of people out there that want to 0:01:15.959 --> 0:01:17.960 buy real estate, that want to get into the game, 0:01:18.080 --> 0:01:22.080 but that that entry barrier is just too high for them. 0:01:22.440 --> 0:01:25.160 So why not Why sit on the money? Why put 0:01:25.200 --> 0:01:28.520 it into your savings account or even the high yield 0:01:28.520 --> 0:01:31.400 savings for that matter, Right, you know, we want safety. Hey, 0:01:31.440 --> 0:01:34.200 I want to get three percent, four percent, and that's great, 0:01:34.360 --> 0:01:36.000 but you got to be a little bit more aggressive 0:01:36.040 --> 0:01:38.160 scale money. Don't make no money at the end of 0:01:38.200 --> 0:01:40.280 the day. And like you said, Magic said, last year 0:01:40.280 --> 0:01:42.319 you got three years. We on year two now one 0:01:42.400 --> 0:01:45.080 years down, two years going to fair enough, right, and 0:01:45.120 --> 0:01:48.880 it's going by fast. So we have to now accelerate that, 0:01:48.920 --> 0:01:53.360 take calculated risk and learn the game to you know, 0:01:53.600 --> 0:01:55.920 kind of increase our our network so that way you 0:01:55.960 --> 0:01:58.280 can really go out here and buy real estate. Try. 0:01:59.560 --> 0:02:01.720 I've been looking that the House of Marketing here in 0:02:01.760 --> 0:02:03.520 Houston like the last year, and then like in the 0:02:03.600 --> 0:02:06.800 last two or three months, a couple of people have 0:02:06.920 --> 0:02:08.640 asked me about all in one loan. 0:02:09.160 --> 0:02:11.160 Can you walk us through what that is? 0:02:11.200 --> 0:02:14.600 And also, can you tell everyone who's hoping for a 0:02:14.760 --> 0:02:17.880 housing market crash that one is never going to come. 0:02:19.160 --> 0:02:23.519 Bro. I've been saying that for fucking eight years, nine years, bro, 0:02:23.720 --> 0:02:27.320 Like everybody. Everybody was killing me in the comments back 0:02:27.360 --> 0:02:30.440 in twenty twenty when I was like, yo, go out 0:02:30.480 --> 0:02:32.680 here and buy real estate. This is the best time 0:02:32.720 --> 0:02:35.400 to buy, and everybody was telling me I was crazy, 0:02:35.440 --> 0:02:38.280 the market's going to crash. But they just don't understand, 0:02:38.800 --> 0:02:41.040 you know, they don't understand the history of this. Right 0:02:41.840 --> 0:02:44.720 right now, there's not enough supply. This is why you 0:02:44.919 --> 0:02:48.600 have a new law that just came out to help 0:02:48.720 --> 0:02:52.919 increase supply, because there's a housing shortage. So no matter, look, 0:02:52.960 --> 0:02:56.640 and I'm not going to take away from you know, 0:02:56.720 --> 0:03:00.120 the debt that folks have right now, consumers spending, the 0:03:00.200 --> 0:03:04.280 rise in housing, courses of insurance, and property taxes. But ultimately, 0:03:04.919 --> 0:03:08.320 there's not enough supply on the market right now. And 0:03:08.400 --> 0:03:11.120 at some point, the Feds, even if they raise them 0:03:11.160 --> 0:03:14.200 a little bit, that's okay. At some point, these mortgage 0:03:14.280 --> 0:03:16.040 rates are going to come down, and there's a lot 0:03:16.040 --> 0:03:18.400 of people on the waiting on the sidelines that's going 0:03:18.480 --> 0:03:20.960 to get back in the game once those rates start 0:03:21.040 --> 0:03:24.000 hitting the fives and the fours again. And we've had 0:03:24.040 --> 0:03:26.440 some trickles of fives over the past six to eight 0:03:26.480 --> 0:03:30.000 months too, So there's opportunities to get rates in the fives. 0:03:30.040 --> 0:03:32.919 You just have to be in position to capitalize on that. Now, 0:03:32.919 --> 0:03:36.680 when it comes to this all in one loan, I've 0:03:36.680 --> 0:03:39.440 been getting a lot of dms about this lately. A 0:03:39.440 --> 0:03:41.520 lot of people been on the internet's kind of talking 0:03:41.560 --> 0:03:45.440 about this. So the all in one loan, I'm gonna 0:03:45.440 --> 0:03:47.400 try to make this as simple as I possibly can. 0:03:47.520 --> 0:03:52.920 It's basically a first lean position helock. He lock is 0:03:53.040 --> 0:03:56.119 a home equity line of credit. And what this does 0:03:56.240 --> 0:03:59.640 is there's some banks out there that's offering you know, 0:03:59.840 --> 0:04:02.920 you open up a checking account with them, and it 0:04:03.000 --> 0:04:05.760 combines like your he lock and your checking account, So 0:04:05.840 --> 0:04:10.040 you make all your deposits temporarily into your home equity 0:04:10.120 --> 0:04:13.160 line of credit to reduce that line of credit balance. 0:04:13.720 --> 0:04:17.080 And then as you're getting paid, you deposit into your 0:04:17.120 --> 0:04:20.600 helock and you're using a helock to pay your bills. See, 0:04:20.640 --> 0:04:23.360 your helock is not like a thirty year mortgage where 0:04:23.400 --> 0:04:27.599 it's ampturized over thirty years. A helock is more simple interest. 0:04:27.680 --> 0:04:30.719 So as you pay down your balance, your payment goes lower. 0:04:31.279 --> 0:04:34.479 So instead of having cash sitting in your checkings and 0:04:34.520 --> 0:04:37.479 your savings account, you have that cash sitting in your 0:04:37.560 --> 0:04:40.160 helock and you just use that he lock to go 0:04:40.600 --> 0:04:44.920 about your daily spending, paying your bills, et cetera, et cetera. Now, 0:04:45.000 --> 0:04:48.039 this can reduce total interest that's paid and can definitely 0:04:48.080 --> 0:04:51.080 shorten the life of the loan. And it's definitely going 0:04:51.160 --> 0:04:53.400 to give you an increase in your cash flow and 0:04:53.440 --> 0:05:00.320 your flexibility. But this is best fit for folks who 0:05:00.480 --> 0:05:01.800 have money. 0:05:02.520 --> 0:05:06.520 Right, explain, is it a helock or it's not a helock. 0:05:06.720 --> 0:05:09.159 It's a helock. It's a helock. So when people say 0:05:09.240 --> 0:05:11.200 all in one, this is just marketing. 0:05:11.720 --> 0:05:15.520 So it's a helock. It's a hey yeas another name 0:05:15.560 --> 0:05:16.040 for helock. 0:05:16.680 --> 0:05:20.200 It's another name for a helock. It's something that people 0:05:20.240 --> 0:05:23.320 are using as more marketing because they're saying, hey, you 0:05:23.360 --> 0:05:25.240 get a checking account that comes with it, and you 0:05:25.240 --> 0:05:28.640 can use a checking account with the helock. It's a helock, right, 0:05:29.000 --> 0:05:32.600 plain and simple. It's a first lane position helock that's 0:05:32.640 --> 0:05:34.880 all it is. And the helock for those of you 0:05:34.920 --> 0:05:37.520 who don't know, it's homemaker line of credit, like I said, 0:05:37.880 --> 0:05:40.400 you have in most cases, you'll have a ten year 0:05:40.480 --> 0:05:44.039 draw period. So in that ten year draw period, you 0:05:44.080 --> 0:05:46.360 can use it like a credit card. Right, you can 0:05:46.480 --> 0:05:48.640 use it paid off, use it paid off, use it paidoff, 0:05:48.640 --> 0:05:51.000 and you have that flexibility. And then after ten years 0:05:51.040 --> 0:05:54.280 it converts into like a twenty year principal interest mortgage. 0:05:54.400 --> 0:05:57.720 These rates are generally higher than what a thirty year 0:05:58.600 --> 0:06:01.520 mortgage is going to be. These can range anywhere from 0:06:01.600 --> 0:06:05.040 eight to ten eleven percent, just depending on who's the 0:06:05.120 --> 0:06:09.000 lender who's given a he lock, and ultimately you're a profile. Right, 0:06:10.400 --> 0:06:14.160 but this is again this is this strategy has been 0:06:14.240 --> 0:06:18.560 around for decades. Right, First, lean position he locked, use that, 0:06:18.760 --> 0:06:20.880 put all your money into the helock, and use that 0:06:20.920 --> 0:06:23.040 he locked to pay your bills, and then you'll have 0:06:23.120 --> 0:06:26.400 surplus or instead of it sitting in your checking account, 0:06:26.760 --> 0:06:30.240 you are paying less interest. And it's essentially you can 0:06:30.279 --> 0:06:34.560 technically technically pay you off your mortgage much faster this way. 0:06:35.240 --> 0:06:39.800 But again, you have to have surplus of income to 0:06:39.920 --> 0:06:42.520 do this. If you are someone who's kind of living 0:06:42.640 --> 0:06:44.599 check to check. This is probably not going to work 0:06:44.640 --> 0:06:47.040 for you, right. This is going to work for people 0:06:47.080 --> 0:06:49.920 who have good income, high income earners, people who got 0:06:50.000 --> 0:06:52.880 strong monthly cash flow who don't need to continue to 0:06:52.920 --> 0:06:56.360 dip into that he lock every single month to live 0:06:56.400 --> 0:07:00.280 their life. Right. Borrowers who keep larger cash balance, is 0:07:00.600 --> 0:07:03.200 this is perfect for them. Now, when you go out 0:07:03.200 --> 0:07:06.000 here and you purchase a home, this is not like 0:07:06.000 --> 0:07:08.400 an FHA loan guys or conventional where you can do 0:07:08.440 --> 0:07:11.200 three percent, three and a half percent, five percent. At 0:07:11.200 --> 0:07:14.600 a very minimum, you have to put down ten percent, 0:07:14.720 --> 0:07:17.200 and some banks that offer this you're going to have 0:07:17.240 --> 0:07:19.760 to probably put down more fifteen to twenty percent. So 0:07:20.200 --> 0:07:22.840 first things first, you have to have that down payment 0:07:23.280 --> 0:07:25.920 to even do this. Second thing is you need to 0:07:26.000 --> 0:07:29.000 have a low debt to income ratio because it gets 0:07:29.680 --> 0:07:32.560 That is extremely important, and I think that's the part 0:07:32.560 --> 0:07:35.160 that people are not speaking about. You can't you can't 0:07:35.200 --> 0:07:36.800 really go out here and get a he lock if 0:07:36.840 --> 0:07:39.040 you got a fifty five percent debt to income ratio. 0:07:39.520 --> 0:07:41.240 Tell them what debt to income ratio is for those 0:07:41.240 --> 0:07:42.440 if they knew it or don't. 0:07:42.280 --> 0:07:46.320 Know, debt to income ratio is exactly what it says 0:07:46.360 --> 0:07:48.720 your debt towards your income and what that ratio is. So, 0:07:48.800 --> 0:07:51.840 for example, if you have ten thousand dollars gross of 0:07:51.920 --> 0:07:56.400 monthly income and your mortgage payment, plus all your bills 0:07:56.440 --> 0:07:59.000 that are on your credit report, like your car loan, 0:07:59.080 --> 0:08:02.280 your student loans, your credit card bills, if everything comes 0:08:02.360 --> 0:08:05.440 up to fifty five hundred dollars a month, you're out 0:08:05.440 --> 0:08:09.040 of fifty five percent DTI or DT or debt to 0:08:09.120 --> 0:08:12.600 income ratio. Right, so that could probably good, be good 0:08:12.640 --> 0:08:16.720 for faha borrower. But if you're talking about a he lock, 0:08:16.840 --> 0:08:18.840 you need to be out of forty two percent or 0:08:18.920 --> 0:08:23.920 lower debt to income ratio. And again, remember one important 0:08:23.960 --> 0:08:26.440 key that folks when they when I hear people speak 0:08:26.440 --> 0:08:28.920 about this and they speak about helocks in general, in 0:08:29.000 --> 0:08:32.959 first position, you have to understand the he lock can 0:08:33.000 --> 0:08:37.880 be cut off at any given time, botty lender. It's 0:08:37.960 --> 0:08:39.040 just like it's how. 0:08:39.000 --> 0:08:42.520 Much notice can be cut off. Like if if I 0:08:42.600 --> 0:08:45.839 have a he lock nicked, they could just cancel it 0:08:46.040 --> 0:08:47.040 even though I already have it. 0:08:47.720 --> 0:08:50.760 Absolutely, they can cut your balance. It's the same thing 0:08:50.800 --> 0:08:52.880 like a credit card. Right, if they feel like you're 0:08:52.880 --> 0:08:56.960 spending is not up there, they'll cut your balances. They'll say, Okay, 0:08:57.200 --> 0:08:59.200 you used to spend one hundred thousand dollars a month, 0:08:59.240 --> 0:09:01.360 but you now spend twenty, So why am I gonna 0:09:01.440 --> 0:09:04.160 keep giving you one hundred thousand dollars when you're not 0:09:04.240 --> 0:09:06.640 showing that you're spending this money. So I'm gonna cut 0:09:06.640 --> 0:09:08.560 that balance. It's the same thing with a he lock. 0:09:08.920 --> 0:09:12.079 If if you live in the decline in market, if 0:09:12.080 --> 0:09:14.800 we start seeing these foreclosures continuing to rise, and that 0:09:14.880 --> 0:09:18.040 of impacts. Remember real estate is local guys, so and 0:09:18.080 --> 0:09:20.560 the banks are monitored this. There's so much technology and 0:09:20.559 --> 0:09:22.680 the banks are using all of this and it's all 0:09:22.760 --> 0:09:25.240 based off of algorithms too. So if you live in 0:09:25.280 --> 0:09:27.640 a zip code that has the it's a decline in 0:09:27.720 --> 0:09:30.280 market and you have a helock that's out, guess what's 0:09:30.320 --> 0:09:32.640 gonna happen. You're gonna wake up one morning and you're 0:09:32.679 --> 0:09:36.360 gonna think you have, you know, fifty thousand available, and 0:09:36.400 --> 0:09:38.000 then you're gonna wake up to see that your line 0:09:38.040 --> 0:09:40.920 was frozen and there's nothing you can do about that 0:09:40.960 --> 0:09:44.280 because they've deserved the right to freeze your line to 0:09:44.400 --> 0:09:45.480 protect their interests.