EP187: How to Use a HELOC to Build Wealth

Book a call with our team: https://goo.gl/dezwHT

Since we published our book, How to Pay off Your Mortgage in 5 Years, we’ve received a lot of questions about how to put the payoff strategy into action. Because finances are not one-size-fits-all, we wanted to take the opportunity to answer some reader questions about paying a mortgage with a HELOC.

This episode of Investing in Real Estate is a live Q&A we recorded on our YouTube channel on Saturday, July 22, 2017. We answered questions about evaluating financial products, trading simple interest for amortized interest, and more! Don’t miss episode 187!

More About This Show
The underlying theme and motive in our book is to empower people to better understand their financial products. If you understand how to evaluate financial products, you can in turn make more informed decisions in both your personal finances and investing strategy.

The strategy outlined in the book teaches you how to choose a home equity line of credit. Then you treat the HELOC like a mortgage in order to pay off your primary mortgage. This method works because you’re essentially trading simple interest for amortized interest.

One of the most frequent questions we have received is whether this strategy works for investment properties instead of primary mortgages. The answer to that question is yes, but it becomes slightly more complicated. A HELOC is a personal banking product, and most investors run their business in a business entity.  

In that case, you can’t just use your rent to pay down your HELOC. Since the rent comes into the business entity’s account, if you take it out for personal use it will be taxed as a draw. For more about using your business bank accounts appropriately, listen to episode 184 of Investing in Real Estate.

In this special live stream, we’ll answer more questions live about using a HELOC to pay down a mortgage. We’ll talk about evaluating deals, using a HELOC as a private lending source, and more! If you’ve ever wondered about using a HELOC as a tool to grow your portfolio, this show is for you.  

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.

On this episode you’ll learn:

  • Can you get a HELOC in your LLC?
  • Under what circumstances is it appropriate to refinance your home?
  • Can you use this payoff strategy for investments?
  • How do you choose a HELOC?
  • How long after purchase can you apply for a HELOC?
  • And much more!

Episode Resources
View the Live Stream on YouTube
How to Pay off Your Mortgage in 5 Years by Clayton and Natali Morris
EP103: Behind the Scenes of Our Next Real Estate Purchase
EP184: How to Choose and Use Business Bank Accounts
BRRRR Real Estate Strategy
Loopholes of Real Estate by Garrett Sutton
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel

Like Morris Invest on Facebook

 

 

 The strategy outlined teaches you how to choose a home equity line of credit. Then you treat the HELOC like a mortgage in order to pay off your primary mortgage. This method works because you’re essentially trading simple interest for amortized interest.

EP181: How to Pay Off Your Mortgage in 5 Years or Less

Book a call with our team: https://goo.gl/dezwHT

What would your life be like if you had no mortgage? Would you accelerate your investing strategy, pay off debt, or take more family vacations? A few years ago, Natali and I discovered an incredible means to pay off our primary residence. Now we utilize this strategy consistently in order to meet our ultimate goal: purchasing more buy and hold real estate.

On today’s episode of Investing in Real Estate, we’re sharing the proven system you can use to pay off your mortgage in just a few short years. We’ll discuss the step-by-step system that can help you save hundreds of thousands of dollars in interest payments. We’ll share the importance of dedication, and why banks don’t want you to know about this strategy!

More About This Show
Have you ever thought about using a HELOC to pay off your primary mortgage? When I first discovered this strategy, I was fascinated, and decided to put it to the test. With enough discipline, I discovered how quickly and effectively it works.

Using a HELOC, or home equity line of credit, to pay off your mortgage is a way to create equity in your primary home. Doing so allows you to pay down your balance quickly. More importantly, it allows us to leverage our funds in order to purchase cash flowing real estate.

The reason this works is because the loan on your house is amortized, meaning the value of the home is gradually paid off. Typically on a mortgage, you’re paying off the interest for the first years of the loan. Principle is not paid off until later.

But if you’re able to put a large amount of funds from a HELOC toward your mortgage, you can designate that money to go specifically toward your principle balance. Then going forward, a larger percentage of your monthly payment can be applied toward principle, instead of primarily interest.

So instead of paying off your mortgage in 15 or 30 years, you’re able to do so in less than five! On today’s show, we’ll map our all the details of this strategy. We’ll talk about utilizing your HELOC as a checking account, and running the numbers of your amortization schedule. Please join us for episode 181 of Investing in Real Estate!

If you want to learn more about this payoff strategy, we’d love to share our new book with you! It just launched on Amazon, and you can pick up either the Kindle or paperback version. We wanted to share this to help you free yourself from the dead weight of your mortgage so that you can enjoy your monthly income however the heck you want to! 

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.

On this episode you'll learn:

  • How does an amortization schedule work?
  • How can you use your HELOC as a checking account?
  • Why is it important to designate your payments toward principle?
  • Typically, how much can you take out of a HELOC?
  • And much more!

Episode Resources
How to Pay Off Your Mortgage in 5 Years by Clayton and Natali Morris
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel

Like Morris Invest on Facebook 

 What would your life be like if you had no mortgage? Would you accelerate your investing strategy, pay off debt, or take more family vacations? We discovered an incredible means to pay off our primary residence. Now we utilize this strategy consistently in order to meet our ultimate goal: purchasing more buy and hold real estate.

EP174: Home Equity Loan or HELOC?

Book a call with our team: https://goo.gl/dezwHT

This episode of Investing in Real Estate is brought to you by RealtyShares. With Realty Shares, hundreds of people invest fractionally, reducing the cost of the initial investment.  If you have $5000 and qualify, you can begin group investing. Visit realtyshares.com/IIRE to receive $100 toward your first investment!

One of the best ways to rapidly build your real estate portfolio is to use the power of leverage. And if you own your primary residence, taking a loan based off of the equity can be immensely useful. There are a few ways to utilize this strategy, and many of you have asked whether a home equity loan or a HELOC is a better strategy.

On this episode of Investing in Real Estate, I’m sharing my personal experience with HELOCs and home equity loans. I’ll discuss which financial product I prefer, and how to shop around for the best deal. Don’t miss episode 174 of Investing in Real Estate!


More About This Show
Home equity loans and home equity lines of credit are similar in that they both allow you to borrow against the amount of equity in your home. However, the two financial products have some main differences you’ll want to consider.

A home equity loan gives you access to one lump sum of money. This is a fairly traditional loan. The bank looks at the value of the home and gives you a loan in one amount.

A home equity line of credit, or HELOC, works a little differently. A HELOC is a revolving line of credit, meaning it works similarly to a credit card. A HELOC can typically be used for around ten years. It has a low introductory rate, and uses simple interest.

Personally, I like to employ the strategy of using a HELOC because it is repeatable and reusable! It can be used like a traditional checking account; you will even be issued a check card and a checkbook.

On today’s show, I’ll discuss more of the intricacies of home equity loans and home equity lines of credit. I’ll share how to get the most bang for your buck at the bank, and when each financial vehicle might be appropriate. It’s all here on the Investing in Real Estate Podcast!

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family. 

On this episode you’ll learn:

  • How can you find a business checking account without fees?
  • What are the benefits of working with a local bank?
  • What is a typical introductory rate on a home equity line of credit?
  • How does simple interest work?
  • And much more!

Episode Resources
RealtyShares
Morrisinvest.com/funding
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel

Like Morris Invest on Facebook

 Real estate investing: Home equity loan or HELOC?