HELOC Strategy | The Kwak Brothers

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Pay Off Your Loan Or Invest? Know What’s Better For You

Time and time again, I see people choosing to focus either a mortgage or an investment but not both at the same time. But which option is better to start with? In this article, I will show you how you can invest AND pay off your mortgage without the diminishing effects of either process. I want to show you that it’s possible to pay off your mortgage and invest simultaneously. More often than not, such a decision often depends on your financial situation. While many people believe that paying off money is best since it saves on your interest payments, others may want to invest their extra

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BREAKING! The Eviction Problem Just Got WORSE 😧

The eviction moratorium has completely expired and the US Supreme Court ruled against the CDC wanting to extend the moratorium. In addition to this, recently the Federal Unemployment Benefit also expired this week and the Biden Administration has no intention of bringing the unemployment benefit back as the economy is starting to open up.  https://www.youtube.com/watch?v=uaTUQruQjKQ In this video, I’m going to unpack what this all means and how real estate investors could potentially benefit from the eviction

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February 16, 2021

HELOC: Sam Kwak Reacts to Money Magazine Article

Money Magazine Article: https://money.com/youtube-mortgage-payoff-velocity-banking/ HELOC Strategy Explained: https://youtu.be/eGVn9iq1e6c So a few months ago, I was interviewed by Money Magazine writer, Samantha Sharf, about our strategy of using a HELOC to paying down your mortgage. She was certainly intrigued as many of you were and she asked me some really intelligent question. She did inform me that the article was put on hold and recently, she let me know that the article will be published. And it did! I really appreciated Samantha’s professionalism and she certainly had many good points. However, there are parts where I do disagree and I would like to provide my response and reaction! Feel free to read the article yourself and other articles that Samantha wrote! Now originally, this video was close to 45 minutes! (YIKES) So I did edited it down to 23 minutes. So unfortunately, I wasn’t able to include ALL of my reactions. But much of the points that were made by the article isn’t really new to me and I’ve heard many of these arguments before. First and foremost, the article never mentions the existence of a 1st lien position HELOC. For the entire article, it presents the strategy through the lense of a 2nd lien HELOC strategy. Therefore, the article fails to mention the full story of the strategy. The article also never mentions the fact that a 1st lien HELOC can be used as a “safety net” for individuals that undergo an emergency or even worse, loss of income for a period of time. So for the sake of making a valid reaction to this article, we’re going to stick to the 2nd lien position HELOC strategy and we’ll make a case for it. Now, on the positive note, the article does a good job articulating the general idea of using a 2nd lien HELOC and does a good job explaining the effects of the lowered average daily balane which ultimately has the effect of saving money on the interest side… But when the article begins make a comparison of using a $10,000 bonus to make a principal payment against the mortgage, it fails to understand the benefit of using a HELOC that ultimately lowers the average daily balance WITHOUT any excess cash/bonus introduced to the numbers.
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September 29, 2020

HELOC Strategy: Is it Still Worth It? (SERIOUS UPDATE)

We’re back with the HELOC Strategy content! (Velocity Banking, Accelerated Banking, Pill Method, Mortgage Acceleration). As you know, we’re a huge fan of using a HELOC to pay off your mortgage. But with the changing financial climate in the mortgage and refinance realm of banking, banks like Chase, Wells Fargo, and Navy Federal Credit Union, tightened up their lending of the HELOC or even canceled the HELOC completely. But other HELOC Banks continued lending out HELOC products to consumers. We have been getting many questions lately about whether to refinance or to continue to try and get approved for a Home Equity Line of Credit (HELOC). (HELOC vs Refinance) Is it still worth it to get a HELOC to pay off the mortgage early? Can you still use a velocity banking model to pay off the mortgage early? In this video, I am going to unpack the latest update on the HELOC and if they are still lending out the Home Equity Line of Credit (HELOC)! With the interest rates on mortgages being historically low, is using a HELOC to pay off the mortgage early worth it? Why not just refinance at a lower rate? Refinance mortgage rates are super low! And is the home equity line of credit (HELOC) still available from banks? Well, 3 banks that we know are currently not approving HELOCS; Chase Bank, Wells Fargo, and Navy Federal Credit Union, while banks like Citi Bank are still lending the home equity line of credit. But the approval times have skyrocketed for the underwriting process and this applies for the home equity line of credit (HELOC) & when refinancing. Why is that? Well, this really all has to do with the market. Banks sell mortgage products and continue to try and get you to refinance every 7 years. This is because mortgage-backed securities are sold on Wall St. And right now, major investment funds have NOT been buying these MBS because of the current economic situation, so banks are hesitant to sell mortgages to consumers. Is a HELOC still worth trying to secure or should you refinance? YES, the home equity line of credit (HELOC) is still the best option when velocity banking to pay off the mortgage early & you can use the HELOC for an investment property. HELOC(s) can also provide financial safety nets. HELOC vs Refinance (Refinance vs HELOC) So is it still worth getting the HELOC to pay off your mortgage? The answer is Yes and No… Now, remember, HELOC interests also ride on the WSJ Prime Rate. In fact, some HELOCs are based on LIBOR but next year, it’ll be phased out to SOFR (Secured Overnight Financing Rate) The current SOFR is at 0.10% which is ridiculous low. So if your argument is, well Sam… I just want to refinance because the rates are low… Why not get a HELOC that also has a low interest rate. Some of my clients in our private membership got a 2.99% HELOC or 3.75% 1st lien HELOC. But using a HELOC to paying off your mortgage transcends playing the interest rate game because you’re driving the principal balance down so low that even at a higher rate, the effective interest amount on the HELOC is lower at the end of the day. PLUS… you can use the same HELOC to acquire investment opportunities such as buying rental properties and cash cow businesses that have higher return than the HELOC interest rate.
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September 1, 2020

How To Pay Off Your Mortgage FAST | SECRET Bank Loophole

How to pay off your mortgage fast without making an extra payment or cutting down your expenses! This is the LATEST version of how I show you, paying off your mortgage, we always are improving our method of paying off mortgages early and in today’s video, I will show you our most up-to-date strategy! Ever wonder how you may be able to pay off your mortgage less than the designated terms of the mortgage (typically 30 years)? Well, depending on your situation, you may be able to pay it off if your serious within 5-8 years without sending double payments to the bank, changing your current level of income, or refinancing? If you want to learn how to pay off your mortgage fast or earlier, I am going to show you a strategy in how you can use a different method/instrument to pay off your mortgage quicker! This strategy is called the “Accelerated Banking” Strategy. This strategy has many other names such as “Velocity Banking”, “Mortgage Acceleration”, “Accelerated Debt Reduction”, “HELOC Strategy”, and more! Download Our FREE HELOC Calculator: Visit https://acceleratedbanking.com When it comes to paying off your mortgage faster, We first need to understand how mortgages work. In this strategy, we are using a Home Equity Line of Credit (HELOC) as a leverage to pay off the mortgage quicker and still maintaining our income and expenses as how they are. You can also use other instruments such as Business Line of Credit, Personal Line of Credit, or Credit Cards for the purpose of this strategy. The beautiful thing about this strategy is that it allows us to take an inefficient debt and convert it over to a much efficient debt. So yes, you CAN use a HELOC to pay off your mortgage faster if you use it the smart way. The emphasis on this strategy is mainly on cash flow and principal balance reduction. The adage strategy of taking the hard-earned money you earn and paying extra toward the principle is an old school strategy. While it works, the Accelerated Banking Strategy is a much more efficient way of paying off an amortized debt because it takes advantage of the maximum income utilization. This strategy will also work on Student loans, car loans, personal loans, and so forth! Don’t let the banks trick you with their amortized products!!! Paying Off Your Mortgage Faster could mean that you can retire faster, invest more, or just create the time freedom to spend your precious time with your family. While there are arguments as to why you shouldn’t pay off your mortgage faster, I ultimately believe it’s up to the persons’ overall financial goals and what they want to achieve. I encourage all homeowners to use this strategy to pay off the mortgage faster so you can enjoy more freedom and build personal wealth.
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September 1, 2020

HELOC: SECRET To 0% Interest To Pay Off Mortgage!

HELOC: SECRET STRATEGY To Get 0% Interest To Pay Off Mortgage! 0% HELOC! In this video, I’m going to show you how to take any HELOC and turn it into a 0% if not, close to 0% interest when using it to pay off your mortgage. If you’re looking into using a HELOC to pay off your mortgage faster, well.. I’m going to show you how to turn your HELOC into 0% interest throughout this video. And if you didn’t know that you can use a HELOC to pay off your mortgage faster, well… You should check out a video where I explained the entire strategy where not only can you pay off your mortgage faster and potentially save a boatload of interest… but it can actually help you protect your income during the recession. I’ll leave that video link right here: https://youtu.be/3f-ebCjeH8o Okay so! I’m going to show you how to turn a HELOC into 0% interest. This is something that many of our clients of the Kwak Brothers are using and I want to give you a little taste of the action. For the premise of this tactic, we’re working with a 2nd lien HELOC for paying off your mortgage. The downside to doing this tactic is that it takes an incredible amount of work and energy to pay attention to what’s going on. Secondly, 2nd lien HELOCs are harder to get approved these days due to the pandemic that we’re dealing with but as the economy draws back to being somewhat normal, it should get easier. You can actually do the same tactic with a 1st lien HELOC where your HELOC is essentially the only loan on the property. Of course, for that… you need to be our client 😉 Btw, if you want to download our FREE Calculator on what it’s like to use a HELOC to pay off your mortgage faster – how much money and time you can potentially save using this method. Link: www.chopmymortgage.com
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June 29, 2020

Velocity Banking: HELOC to Pay off Your Mortgage FASTER (Step-By-Step)

Velocity Bank! Does it ACTUALLY help you pay off your mortgage faster using a HELOC? Can you use a HELOC to pay off your mortgage? In this video, we’re going to explain the Velocity Banking Strategy Step by Step. We’ll illustrate how does the Velocity Banking concept work, how it ACTUALLY saves you money and time, and at the end of the video, I’ll leave you with a FREE Velocity Banking Calculator to download: FREE VELOCITY BANKING HELOC CALCULATOR: http://chopmymortgage.com So how does the Velocity Banking Strategy actually works? Here in the Kwak Brothers, we call it the Accelerated Banking Strategy. To start off, this strategy does rely on having a line of credit – like a Home Equity Line of Credit (HELOC) This strategy WILL work with a 1st lien HELOC, 2nd lien HELOC, Personal Line of Credit (PLOC), and even some cases – credit cards. A HELOC has features that mortgages don’t and the BIG feature is the “Open-Ended” feature. So here’s the “traditional” version of the velocity banking strategy: (2nd Lien HELOC Version) You take a chunk of a HELOC and do a principal payment against the mortgage. Essentially, you did a balance transfer from the mortgage to the HELOC. From there, you’re going to put ALL of your income and savings into the HELOC. Remember, you can ALWAYS draw the money back out from the HELOC anytime you want. Think of the HELOC as your new savings account. This effect allows for the average daily balance to go down – thus you pay less interest. With the money you DIDN’T pay for interest – now goes to principal which pays down the HELOC faster than the mortgage. The next version of the Velocity Banking Strategy is using a 1st lien HELOC instead. With this version of the Velocity Banking strategy, you’re completely replacing your mortgage with a 1st lien HELOC. Once you replace your mortgage with a HELOC, you do a similar pattern with the 2nd lien HELOC Velocity Banking. You’ll dump all of your income into the HELOC to lower the average daily balance. Here’s a bit of a bonus tip that I DON’T regularly share on YouTube… I only share this with my students and coaching clients… You can also use a credit card to hold all expenses and operating expenses for 30 days while your income stays parked in the HELOC. This allows for the HELOC balance to stay low for a long time which means you’ll end up paying less interest. After the 30 day period, you’ll use the HELOC to completely pay off the credit card so that you don’t end up paying any interest on the credit.
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