The Financial Trend That Could Leave You Houseless

Рет қаралды 40,713

Күн бұрын

💵 Create a free Budget - Sign up for EveryDollar today! ter.li/ubldyt
The Financial Trend That Could Leave You Houseless
There's a disturbing financial trend that is growing, and it could leave people houseless. It's called a Home Equity Line of Credit, also known as a HELOC. Today, we're going to talk about the HELOC-ness monster and why it's not the easy solution for quick cash people are hoping for.
Links:
Ramsey Real Estate Hub: www.ramseysolutions.com/real-...
George Kamel is a personal finance expert and co-host of The Ramsey Show. Following Ramsey’s proven money plan, George went from negative net worth to a millionaire in under 10 years. His goal is to help people spend less, save more, and avoid money traps so they can live a life with more margin, options and freedom.
This channel will simplify complex money topics, bust money myths with actual facts, and debunk the stupid financial advice you're seeing in your social media feed. All with a healthy dose of pop culture, humor, and snark.

Пікірлер: 133

@vintagecrazyjay4970 Жыл бұрын

Paid off our house on 8/4. Tech World had massive layoff on Monday, 8/7 - lost job. That was close! Be Aggressive, B - E - Aggressive...in paying off your debt! Never know what's around the corner.

@KP-uz3nk 11 ай бұрын

Knowing what you know now, do you regret paying off your house early?

@chadd587 11 ай бұрын

@@KP-uz3nkIf they followed baby steps, hes got 3-6 months of expenses saved up, including enough to cover the mortgage he no longer has, zero debt and retirement accounts accruing. He just has to keep the lights on and food on the table. He's on auto pilot while he hunts a job. Imagine if he had a mortgage to contend with.

@thehospitalguy1657 11 ай бұрын

My parents told me decades ago to not ever pull a loan on your primary home ever. My parents did exactly that and ended up loosing the home when the aerospace industry died in our area. The only good thing was that the person that bought the home rented it out to my parents. That guy also made a bunch of repairs, put on a new roof, stuff my parents couldn't afford to do. Then after 5 or 6 years when my parents were in a much better place the guy that bought the home thought the housing market was about to fall apart so he told my parents he was going to sell the house. My dad and mom bought the home back again in 1999 and watched as prices jumped to where the home had nearly $200,000 in equity when they sold it in 2003 and moved to a lower cost area paying cash for a brand new home and paying off all their debt. Lucky them.

@user-li2vl4yd1x 11 ай бұрын

They earned their luck. Great job. ❤❤❤❤

@AvalonMisty 10 ай бұрын

Wow! what a story thanks for sharing

@derekcox6531 Жыл бұрын

Borrowing against your home is just such a terribly bad idea. Truly 1 step forward and 2 steps back and eventually you will see yourself behind where you started when you bought your home. Just don’t do it.

@matthewmorris7320 11 ай бұрын

We learned the hard way with HELOC as well. We won’t make that mistake again! Sure we got a new roof, HVAC, and windows, but we could only afford to make interest only payments, so we were going nowhere with the principal! Ultimately, we refinanced our mortgage (for 15 years) when the rates were low and rolled the HELOC into the new loan, STUPID TAX paid!

@Leftists_are_Losers Жыл бұрын

HELOC is a funny game. The only winning move is not to play. You CANNOT borrow your way out of debt …

@heathervenkat1414 Жыл бұрын

I used to hate listening to financial stuff, but not anymore. You make it fun and break things down in an easy to understand manner. Thank you!

@sinisterhug1394 11 ай бұрын

Man, I was a loan officer before, and if I had $1 for every person that I came across, who screwed themselves with a HELOC/HELP, I think I could buy a nice car 😂 (The only thing worse than a Home Equity product, is a reverse mortgage. You can marginally get by on a HELOC, but man is a reverse mortgage the worst lending product out there) yeah, I said what I said 👀

@kacheek9101 11 ай бұрын

While I admittedly have not looked much into reverse mortgages, I think it's been a good thing for my grandmother (as do my parents and the one aunt and uncle I know who know about it). But that's because we all viewed it as grandma selling back the house to the bank. Now she's comfortable financially speaking in her last years while living in the same house she's been in for decades, when she otherwise would have been pretty much in poverty; the house was really her only asset. Admittedly there's gonna be no inheritance, but whatever, she's given enough to the family, she doesn't need to give in death too

@drewthetechy Жыл бұрын

Shoutout George’s editing team for always delivering epic content !!

@itsgoingtobeokay. Жыл бұрын

A HELOC is a scary money grabbing scam to me

@ABasedTohan Жыл бұрын

3:34 beat part of the vid, the camera switch, the head turn, the commitment to the it 👏🏾👏🏾👏🏾

@jaywalk6628 Жыл бұрын

At some point, you need to grow up and quit taking out loans. Your future will thank you.

@angievol09 Жыл бұрын

Man, say it louder for the people in the back!

@christopheraquino4711 Жыл бұрын

Don't do HELOC or get any money from your house, that will just add up to your balance, reason why you need emergency funds.

@hardlife507 10 ай бұрын

So thats how people afford all these crazy toys and nice house remodels. Here Im thinking I was broke for paying for all these expenses cash.

@magicbucks56 Жыл бұрын

George Kamel is the best Ramsey personality!

@thisoldbelair Жыл бұрын

HELOC’s were a big player in the economic crash of 2008. Its simply flabbergasting to me that people still use them.

@joelmoore3804 Жыл бұрын

+1 for home is where the heloc isn't

@mrsm482 Жыл бұрын

I can't believe this is available. The definition of future homeless. Don't do that, people!

@ronaldcampbell17 Жыл бұрын

I got a HELOC to buy an airplane. No regrets at all… nah, just kidding. Just wanted to say something crazy. Great video!

@phantom193 Жыл бұрын

just closed on our first house the week leading up to it our loan officer sent us 2 emails offering a heloc already, even saying we could pay off other debts with it😂. just nuts. and the way she words it makes it sound so innocent. i bet alot of people fall for it

@BenjaminKraehemann 11 ай бұрын

Absolutely love the video clips and culture references sprinkled throughout these videos. Makes learning about valuable financial principles very entertaining.

@leahwolber7082 11 ай бұрын

Our basement flooded last winter and I was so tempted to do a HELOC, but decided to save up for it. We’ll be renovating this winter (and get the bonus feeling of achievement from saving!). We couldn’t use our basement for a full year, but we didn’t really use it anyway.

@raf5.13 Жыл бұрын

Hell lock?

@kendrapratt2098 11 ай бұрын

George, my man, the Oregon Trail ref brought joy to my heart! Lol

@bigcahuna42366 Жыл бұрын

I'd lose sleep if I ever did a HELOC, especially with a shady company who offers a variable interest rate on those stupid loans

@moneywithross Жыл бұрын

Awesome video! I’ve never considered a HELOC, now I never will!

@eli-bt4he Жыл бұрын

Came to the comments section to find all the people saying this is bad advice and taking out a heloc was the best financial decision they ever made. I was not disappointed.

@codygarcia7370 Жыл бұрын

Awesome advice and hilarious way to give it! George is gettin after it!

@carolannstevens5814 10 ай бұрын

We put down $500k on a house 7 years ago. Builder wanted $300 construction loan. The builder did not finish within the time frame he agreed and they were in the process in foreclosed. We had the money to pay what we borrowed thank God.

@elpasoerickp 11 ай бұрын

Saving seems like such an unreachable goal, until ya actually get a plan. Ramsey every dollar app is a great tool to help ya catch yourself slipping.

@briemann4124 Жыл бұрын

I know I say it on about every video, but I really appreciate your videos, your information, and your editors. The videos are great!

@AbbyJo451 Жыл бұрын

First, I would buy tickets to that Broadway show. Second, I'd love if you could share some money tips for renters! I'm moving to my first place of my own (aside from a college dorm) soon.

@sarahshealthyrecipes 11 ай бұрын

I always wondered what that acronym was 🤦‍♂️Wont be doing that! 🙅‍♀️We're debt free aside from our home and while we'd love to remodel, its not a NEED so itll just have to wait. Thanks for the great info!

@Shiggysho Жыл бұрын

thanks george for explaining this!

@timkopp2204 10 ай бұрын

Oh gosh. Every video reminds me of how bad i was with money. Ugh.

@RickImus 11 ай бұрын

On point content and an engaging use of the video format. Not just an audio recording in front of a camera.

@DrDoke Жыл бұрын

HELOC to pay for a wedding? That has to be the among the worst possible financial decisions.

@stop08it 8 ай бұрын

why does such a dangerous loan even exist?!!

@joshhoward1289 Жыл бұрын

Love your sense of humor. Always entertaining.

@IvanPerez-pd9tz 10 ай бұрын

Waiting on the broadway production!

@mrs.tiffanygayles4138 10 ай бұрын

Great video and very funny. Loved it !

@ToOpen6seven Жыл бұрын

This was soooooo goood!! Thank you so much!!

@rangequeen Жыл бұрын

Very informative, thank you.

@debbiebarber5640 Жыл бұрын

Great advice.

@ehderguyyashootadeerorno2313 Жыл бұрын

HELOC..... Paying off your house once sucks, imagine doing it multiple times. I also see a credit card that is a HELOC which is dumb dumb dumb. Why would you risk your house?

@gm2407 11 ай бұрын

You spend so long clearing a mortgage, why would you take out a worse mortgage on it again?

@bige6876 Жыл бұрын

There's no way you actually play that ukulele. I don't believe it george. Also I would fly to go see your show in Broadway

@GeorgeKamel Жыл бұрын

Last track of my album The Great Coward. Ukulele based song called Home (I Am). Search for it wherever you listen to music.

@seankirchner2378 Жыл бұрын

You have died of dysentery on the Oregon Trail. Same. I currently have an unused HELOC through the same bank as my mortgage. Interest rate is over 11%! Not gonna do it, wouldn't be prudent.

@Cybertrucker1 11 ай бұрын

No heloc no ragrets!

@stop08it 8 ай бұрын

OMG the muffins video!!! what a throwback haha

@gio2062 Жыл бұрын

You set it up at the end, now waiting for a video on in-ground pools 😂

@goodguy1651 11 ай бұрын

My boss took a HELOC out for an in-ground. SMH I guess it's his life but wow 😳

@gio2062 11 ай бұрын

@@goodguy1651Oh wow! 😅

@muggins20 Жыл бұрын

Deja vu...I swear I saw this video a week ago. Weird

@stephenkellervideos 11 ай бұрын

My dad likes having a heloc, but he also pronounces chipotle chip-oat-ul 😂 so… trying to fix some old generational thinking

@MarcusRangel704 Жыл бұрын

Love the modern video style. It gives the newer generation of people like myself more confidence to be smarter about money. God bless you and your family.

@1LineAtATime Жыл бұрын

A family member told us about this..... sounded fishy then, and still does. Thankful for this video! Also: Home is Where the HELOC isn't🤣?! I'll be there with a bowl of air-popped (not microwave) popcorn 🤣.

@johnfijnvandraat Жыл бұрын

To put into perspective a HELOC is a line of credit with a higher interest rates, your home as collateral, and lacking in regulation. You are better off with a line of credit yet that's still a bad idea because it's still debt

@Joliejenni Жыл бұрын

The chipotle comment 😆😂

@joysilas4724 11 ай бұрын

Can you make a video on the TSP?

@antoniofigueroa5084 Жыл бұрын

Agree 100%!

@tylermillercoach Жыл бұрын

Love the Fleabag drop. That was so random

@elisemedina2237 11 ай бұрын

The best!!

@Beachgrl581 Жыл бұрын

HELOC-ness monster 😂

@Nursemidratz Жыл бұрын

That muffins video was a throwback!

@angievol09 Жыл бұрын

Pumpernickel 😊

@aylayang2532 6 күн бұрын

So we want to buy a house with a little land, but keep our current home so my father can live here as he gets older. The HELCO is what was suggested to us by the bank we go to the most. We are paying debt off currently so we will only be down to our home so the HELCO won’t be impossible while I also look for a better paying teaching job in my area. It’s not debt free but it keeps the house in our family while we move to a space that fits our needs and is in between our jobs. Is there a better way to keep the house without having to sell it to get a new home???

@insanedrummer89 Жыл бұрын

turning Equity into Debt.....why oh why oh why~?!

@workandplay717 Жыл бұрын

I made a comment on this but that equity doesn't mean anything until you sell. You can utilize that equity to make more money to purchase smart investments.

@Cybertrucker1 11 ай бұрын

Take it to broadway

@punkbassandcovers Жыл бұрын

Waiting for the velocity banking crowd to arrive in the comments....🍿

@robinleavitt7919 Жыл бұрын

Never borrow money

@trainsandlocomotives 11 ай бұрын

The Mortgage Company are trying hard to get that 2.5 interest rate away from you.

@davisamills597 Жыл бұрын

Can you do a video on back-door ROTH IRAs (for our high income earners who are already maxing out the 401k)????

@CarolinaCoalition 11 ай бұрын

To complex for this audience. Go watch the money guys

@fraddstar Жыл бұрын

Home is where the HELOC isn't 😂 Get around it folks

@GabrielMartinez-sd8pc Жыл бұрын

To be honest with yourself, if you got a HELOC, you literally removed all benefits of your 10-20% down payment. You might as well have gotten a more expensive home instead of paying for the renos which what a lot of people use HELOCs for. It’s such a scam. Keep that equity it might save your life.

@TheStruggleistooReal 11 ай бұрын

Pub sub reference 💀

@azteca6695 Жыл бұрын

Ha! And i just a video where Dave Ramsey tells a caller. To borrow from their house to pay off the IRS. They owe $25,000.00 😊

@pagalhokya Жыл бұрын

I was looking for this comment :P

@eli-bt4he Жыл бұрын

I'm guessing that was an extremely bad situation. Just because he advised for someone in a desperate situation to do something doesn't mean that it is good advice for the other 99% of people.

@lionmangolf Жыл бұрын

It was to pay off the IRS

@lionmangolf Жыл бұрын

We did one to get rid of debt faster knowing the interest was a lot lower. I'd we had to sell the home it'd be ok due to being empty nesters. We've thought about downsizing anyway as a way to get out of debt once & for all.

@samanthaking3004 Жыл бұрын

Ok but what if it is to add a room and a bathroom? Like if you have two adults, three young children but just found out you’re having twins 😅 Debt free, just can’t save up fast enough before the twins come and our house is a 2/1. Love the area and not out building the neighborhood!

@motoryzen Жыл бұрын

Oh waaa get over it. Share a bathroom. Shit I had to growing up..mympthet worked two jobs toeven keep that4oof over our heads

@riceball777 Жыл бұрын

live with it untill you save the money above your emergency fund to do the remodel

@xxtoptankxx6873 11 ай бұрын

Imagine losing the whole house to have a room and bathroom. Sell the house and get a bigger one, or foot the bill yourself.

@sheryld1220 10 ай бұрын

Doesn't help that a bunch of "pros" were telling people to do this on tiktok....c'mon sheeple....wake up

@rossmcgreg6r642 Жыл бұрын

Funny, Dave Ramsey just told a woman to get a HELOC to pay back 25k in debt. She owed the IRS .

@humblekind4189 Жыл бұрын

Extreme example, IRS can garnish your wages otherwise

@tim_9562 11 ай бұрын

Hell-oc, He-locness monster, 🐉🐲

@samw7151 Жыл бұрын

Has Dave, or anyone else, commented on a scenario such as being short a large sum during an emergency? I know they've skirted around the question but have they ever addressed it out right?

@zixinnie9796 Жыл бұрын

Save up an emergency fund

@samw7151 Жыл бұрын

@@zixinnie9796 is this being said ironically?

@stevenruyf4044 Жыл бұрын

No it's not. Emergency fund is best, second best is an unsecured loan like a personal loan from your credit union. There's no scenario where betting against your house is smart.

@arh1234 11 ай бұрын

The Money Guy has. The problem (which happened to Brian) is that HELOCs can be frozen, and many were frozen in 2008 when people needed the money most.

@obie1coby Жыл бұрын

Used a heloc to buy an investment property way below its value. I then refinanced, paid off the heloc and now that how makes me $400 a month and is worth twice as much as the debt on it. I would say that is the correct way to use a heloc

@Mountainhippiedude Жыл бұрын

That can work out IF everything goes to plan. However, if an unseen variable enters the equation, and if you stay in the rental business long enough you are guaranteed to encounter unseen variables, the result can be quite the opposite. I had a rental property that I did not collect a single penny of rent from for an entire year during COVID. The eviction moratorium left me completely powerless to remedy the situation. If I had been relying on debt, it could have been financially disastrous for me.

@MikeCo32 Жыл бұрын

I absolutely used a HELOC to help get me out of CC debt. It’s much easier to pay off debt at

@joshmonus 10 ай бұрын

You took unsecured debt and backed it with your home. Leveraging your home is a real bad idea, especially when you are using it to cover other debts.

@MikeCo32 10 ай бұрын

@@joshmonus Yes, there is increased risk to consider. But for me, the risk was worth the >15% difference in interest rate.

@joshmonus 10 ай бұрын

@@MikeCo32 I never risk my home because I don't want to wind up living under a bridge. If you stop paying unsecured debt they can't take away your home anyway.

@MikeCo32 10 ай бұрын

@@joshmonus I respect your position. Since I paid off that debt I, haven't touched the HELOC, and don't plan to. But it did save me several thousand dollars and many months in the debt pay off process.

@Investing123 11 ай бұрын

What if used for buying a cash flowing property? Not all debt is bad debt.

@jack7240 Жыл бұрын

What are your thoughts on using it for a rental prop? i own one property in full that is currently rented. i could take a heloc out on that home to buy a second rental property to rent as well and have the tenets pay off the heloc and the second mortgage on the second rental property. I would also make sure i have the cash to cover the heloc in full if i needed to. Kamel is this scenario crazy or unsafe?

@GeorgeKamel Жыл бұрын

It’s stupid on steroids. I only advise buying rental properties in cash.

@user-ov4wr5yu4r Жыл бұрын

@@GeorgeKamelI like that you didn't sugar coat.

@SunFruitLife Жыл бұрын

7:50 to explain that a HELOC is a simple revolving credit line against your home equity and that you shouldn’t do it. LOL.

@DallinBunnell Жыл бұрын

A HELOC may be an excellent option given the mortgage rate environment. It makes more sense to take 50k to upgrade your house with a HELOC than to take on a new mortgage for a bigger house if your mortgage rate is under 4% right now. Just saying. And they can be a great way to accelerate your return when investing in real estate- but it must be used responsibly.

@danieljohnson4418 Жыл бұрын

Bingo!

@billyvazquez3212 Жыл бұрын

You should get a heloc only if you find a great deal on an investment property with cash flow on rent

@Mountainhippiedude Жыл бұрын

Still a bad idea. I’ve owned rentals for a number of years. Just because a property has shown great rental cash flow in the past doesn’t mean it will continue tomorrow. During COVID, I went a whole year without collecting a single penny in rent from one of my properties. The eviction moratorium left me powerless.

@billyvazquez3212 Жыл бұрын

@@Mountainhippiedude your wages will never out pace inflation

@Phate8263 Жыл бұрын

Yeah Helocs are scary, that's why I just do margin loans instead.

@anthonylozano8035 Жыл бұрын

debt can produce cash flow. That piece of information is false. Great video btw. I have an opinion the amount of HELOCs taken out will adversely effect the housing market in the near future causing a lot more foreclosures, (sprinkle in some higher unemployment numbers), thus leading to a major dip in the housing market. Patience!!