hello and welcome back to my channel I am Christy van with fantastic Finances and on this channel I teach velocity banking today I wanted to talk about mortgages I am
getting clients coming to me about every week now saying hey we bought a home and we have a seven percent interest charge so when I hear that I want to get down in a fetal position on the floor and just cry out loud for you and I want to explain to you when they say to you oh go get you a little
four percent mortgage don’t pay a 12 line of Credit let’s go get a little four percent mortgage I wonder if you know what they’re saying a four percent mortgage what does that really equal well take four times two that equals eight right mm-hmm now add a zero to
that you are paying 80 percent interest on a mortgage when you are paying four percent now I’m going to show you the difference between a 12 line of Credit and a 7.35 percent mortgage interest Loan that they are giving you right now to buy your home so
I’m going to do a comparison this is a five hundred thousand dollar home at 7.35 percent now I’m doing this because I actually have a client that just did this a five hundred thousand dollar home at 7.35 percent like I said I wanted to sit and cry with him but he wasn’t even aware
because we haven’t been told we just don’t know any better but after this CashNews.co is over you’re going to know better you’re going to know why when I say a line of Credit at 12 percent is much healthier for your href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance
to put this down on the principal of my home how much interest would that save me if I put ten thousand dollars on the principal of my home so we take the ten thousand dollars we put it on the five hundred thousand dollar home and let’s just say that our payments begin July the 1st of 2023
okay so you take the ten thousand you’ve put it into the home and you’re at four hundred and ninety thousand dollars now now remember you’re still making your mortgage payments without Taxes and Insurance the mortgage payment on this
Loan is three thousand four hundred forty one dollars and forty six cents a month it’s just a baby payment but you’ve got this huge home right so you brought the ten thousand now your home balance is at four hundred and ninety thousand what if you just decided to go
ahead and make the payments on that mortgage and just see how long that took you to get to 490 000. well if you paid your payments for 23 months to June 1st 2025 you are going to be at four hundred and ninety thousand dollar balance approximately so it took you 23 months to get there making 3441 in
payments every month right but how much interest did you pay to pay that 23 months so if you take the 10 000 and you put it directly on the 500 000 home when is it four hundred and ninety thousand dollars today July the 1st 2023 win your first mortgage payment is due you took the ten thousand you
put it on your Loan you’re now at four hundred and ninety thousand dollars and it didn’t take you 23 months to do it but how much interest did you pay on this I mean this is a 12 line of Credit right let’s see so ten thousand times twelve percent
equals what twelve hundred dollars right now remember that’s a year this is simple interest so ten thousand times twelve percent is twelve hundred dollars a year now what if you said well I’m not even going to pay on this I’m just going to leave that sitting at 10 000. I’ll
just pay the interest every month and yeah it’s like a hundred dollars a month right so if you divide 1200 by 12 months you’re going to get a hundred dollars yeah I don’t even care I’ll just I’ll just leave it sitting there or you could take your
Income of ten thousand dollars this person makes ten thousand dollars in Income has eight thousand dollars in expenses he could say you know what I’m just going to use this line of Credit as my checking account and I’m gonna put my ten
thousand dollars in here well what did that do to your balance as soon as you put in your Income exactly what is the payment on this line of Credit exactly when you put in your Income into a line of Credit you have just satisfied
that payment and how much interest is on this Loan now that he has put in his ten thousand dollars zero right so yes his expenses could come out of that now he could pay his expenses which is eight thousand dollars a month use this account as his checking account his
Income goes in his expenses come out he has put ten thousand dollars on his mortgage and it did not cost him another payment to do so now let’s talk about what happened over here with the 23 months that you paid on the mortgage remember it took you 23 months just to get to
490 000. here you got there in one day and if you decided not to pay it you’ve paid twelve hundred dollars a year right in interest if you let this run through June of 2025 you are going to pay sixty nine thousand at two hundred and thirty dollars in interest alone think about that 23 months
of these three thousand four hundred forty one dollar payments three thousand of that is going to buy the bank a house it is not going to pay for your home your little four hundred dollars here that’s all that’s going into your home twenty nine thousand two hundred and thirty dollars oh
you paid 79 000 Plus in payments for 23 months but 69 of that plus went to the bank not to your home do you know that if you let this Loan run out for 30 years that you’re going to pay one million two hundred thirty eight thousand nine hundred and twenty four dollars in
payments do you know that you’re going to pay 738 924 dollars in interest alone how many homes did you just buy the bank exactly you paid for the bank’s home first you paid for the bank a home and almost a half just to get your five hundred thousand dollar home over here you saved
yourself 23 months you actually cut 23 months off of this mortgage you actually saved yourself sixty nine thousand two hundred and thirty dollars in interest in 23 months all in doing one ten thousand dollar chunk if you don’t believe me pull up a Carl’s mortgage calculator or any
mortgage calculator put in the numbers 500 000 at 7.35 percent and see if I’m wrong no payments here baby interest if you do velocity banking right you’ll pay very very little interest at making ten thousand dollars a month and let me tell you what’s even worse on top of this 69
000 for 23 months is when you get to about 48 months if that far you’re gonna start getting letters from your bank that holds your mortgage and they’re going to say hey you’ve done real good on making your payments for 48 months we want to give you twenty five thousand dollars of
Equity in your home why don’t you reFinance and if you retext-decoration: none;">Finance we’ll even take a percent we’ll knock you down to six percent we’re gonna do you a favor do you know what they just did if you renone;">Finance you are paying this all over again it’s a trick you already bought them a home in the first four years this is just 23 months 23 months of interest that could be in your pocket this hard-earned money for you need to support your family you just supported the bank
and their family this could have been in your pocket and they’ll do it to you again if you reFinance that home so you have to make a decision am I going to adult up and
decide hey wait a minute what there’s no excuses after seeing this CashNews.co I don’t even care if you got a 2.35 percent mortgage you are still getting hit with interest that you do not deserve this little trick right here I’ve taken at a 12 percent oh they’ll tell you all
day long I can’t tell you how many clients in a week I talk to that tell me they went into the bank to get a line of Credit and the line of Credits are usually like nine percent right now in the high nine percent and then when they asked for a line they will
try to throw them in a Loan every single time and what do they say you don’t want no nine percent line we can give you this Loan over here for five percent right because that’s amortized too just like the mortgage all of that interest is front loaded to
hit you so that you have to pay the bank first then as it trickles down you get to add a little bit more to pay for your motorcycle your car your home with a mortgage when you get to the 15-year Mark now if you’re in a 30-year and you get by the refi and you don’t do it and you keep
struggling on through in year 15 you’re going to start breaking even with your payments so if you’re paying a three thousand dollar payment on a mortgage in 15 years about 1500 of that is now going to your home and 1500 of that is still going to the bank I get angered when I hear that
our young people in America are getting long to seven percent mortgages right now seven percent literally highway robbery it’s been going on since 1929. and now you know how to fix the problem you have to go get you a line of Credit I don’t care if it’s at 18
you’re going to beat this because 7 times 2 is 14 add a 0 to that 140 percent this one’s paying over 140 percent because they’re at 7.35 that’s a lot of money just to throw out the window throw it over here to me if you’re just wanting to give away money I’ll
take it guys we need to get smarter than the paper that that dollar bill is printed on because it is worth nothing okay we have young American families that are going into this Debt not knowing there’s a better way and I want to spread the word to anybody and everybody that
will listen please know what you’re doing when you buy a mortgage please just have a line of Credit ready for you to take control of your Debt because it’s going to control you if you go into stuff like this and I don’t want to see that happen
thank you guys for joining me today I know you have questions and I know you have comments and I want you to leave them below I’m tickled for you to leave them below do it I want to hear what you have to say I also want to say that you do not need a financial advisor you don’t need your
mama and you certainly don’t need a bank to tell you if you should or shouldn’t do a mortgage now you know you know how to play the game you can play it to where you win oh you’re still going to pay some interest to the bank but if you were to chunk this 10 000 once a year can you
imagine the damage you would do to the interest and how much money you would put back in your pocket instead of paying that out to the bank think about it think about the mindset that they’ve got us in that we’ve been trained in you don’t need anybody to help you understand this
this is the CashNews.co that is teaching you what to do don’t hire me to look into your Finances go do it it’s easy I’ll be glad to help you I love money as
much as the next person but I’m saying don’t pay anybody to help you with your Finances look through these CashNews.cos and find the one that is right for your
scenario get smart with your money take control of your Debt don’t let it control you any longer okay I think you guys are awesome I have the best subscribers in the world my Tick Tock fans they are awesome I’m just so thankful that you have joined me today and I am
just so thankful that you’re a part of this you’re an elite group because you want to learn about your Finances and how to control it and that is excellence we
need to be great stewards of our money God blesses us with funds and we need to take care of them and do the best that we can do so don’t throw it away anymore make a decision you’re going to take control of your Debt it’s an easy decision and it’s one that
only you can make I hope you guys have a terrific week and I will see you in the next CashNews.co
CashNews, your go-to portal for financial news and insights.
This is not an apples to apples comparison. You need to compare the interest you will pay on the LOC for 23 months against the difference in interest between the $500,000 and the $490,000 loan starting points over the same 23 month period. You will find that using the LOC you end up paying more interest.
Case 1: $500,000 – interest paid over 24 months = $72,823.63
Case 2: $4900,000 – interest paid over 24 months = $71,315.77
Interest Difference between case 1 & 2 = you save $1,507.86 by making an initial $10,000 principal payment which is good 👍
Worst case interest on $10,000 LOC at 12% over 24 months = $2,400
By using the LOC you pay $892.14 more in interest compared to the difference between case 1 & 2 ($2,400 – $1,507.86) which is bad.
If your average daily balance remains railed at $10,000 you will lose money using this method.
You will have to keep your average daily balance below $6279.17 to break even with this method.
But it just makes more sense to make direct payments to the loan principal direct to your lender instead of using this LOC method.
Bankers are shrewd people, there are no easy outs. Unfortunately, this method will not save us money. I was hoping it would, lol 😆.
Why not just pay the $2k extra directly at the mortgage?
Does anyone have issues trying to take out a line of credit at a bank? Is there any pitfalls or things to watch out for?
AND WORKED A FULL TIME JOB AT THE SHIPYARD PLENTY OF OVERTIME
I KNOW I DID IT TOOK SHOWER AT THE GYM ATE GOOD CHILLED OUT WITH THE OTHER CAR CAMPERS
IN CALIFORNIA RENTS ARE HIGH YOU CAN SAVE 4K A MONTH SLEEPING IN YOUR CAR 4 X 24 EQUALS 96,000
My life changed too when I started doing this and putting money in stocks. The first few years it as really great, but this year I haven't felt like my portfolio is doing well. I have lost more than $40,000 from my portfolio the past four months, and it's now very worrisome.
I need this lady
Always wondered why someone chooses credit card interest at 12% Not only stupidity but also fooled by vids like this. There's no such thing as a free lunch and you cannot compare a 1y interest to the compounded interest of a 20 to 30 year mortgage loan where the bulk of the interest is in the beginning.
As a financial professional, velocity banking certainly caught my attention very quickly! Retired from a 42-year banking career which included testing and verifying that the bank's new loan calculators were correct, manually calculating and verifying that APR's were correct for regulatory compliance, and understanding the various interest calendars (360/360, 365/360, actual/365, etc.). One of my highest priorities was also correcting financial misinformation. So here I am. Unfortunately, 'velocity banking' is not the miracle it may seem.
The easiest way to think of it is that you have a certain amount of debt, and every dollar of that debt is accruing interest at some rate every day (either the mortgage rate or the line of credit rate (which is almost always higher!)). Velocity banking does not materially change that. Both principal and interest have to be repaid. The only way to accelerate debt reduction is to pay extra principal – and that comes out of income. That means that whatever your current payments, you have to use MORE money out of your income to pay debt down early, regardless of any shifting of money back and forth during the month, and you can do that by simply writing a bigger payment check any month(s) you choose. IF you can use a credit card account as the 'line of credit' and the card allows an interest-free period for balances paid in full within the usual 25 days from billing, you could potentially save a little money if you are willing to do all the work and take the risks that go along with that – but the benefit is relatively minimal – and that's IF nothing goes wrong (such as, you can't pay off the card).
Good idea, but in practice it is not the Pandora's box one would perceive from the hype.
Help me understand. If she pays off the 10k line of credit with her income she no longer has the line of credit to pay her monthly bills. How is she then paying for her monthly bills?
how can I get an appointment
As always she is the best
Does she meant a heloc? Where is the best way to get a line of credit?
We have just been paying as much as we can every chance we get. Extra $50 here $100 there several times a month. Date night at the house. What did we save, put it on the mortgage. We make a game of it. It’s like a gambling rush but you always win. I’ve done as low as $10 before.and as high as $6,000.
My site features a directory of all condition properties ready for purchase. Might be worth a look.
people people your mortgage is pre paid buy your self take it back its yours from the start there getting over on you then double dipping and selling your name from the promise to pay note that you got lead into you signing don't be stolen from any more put your foot down and stick together as one there out to keep you blind find who the trustee bank has your mortgage locked up tight find the global bank the bank the bank the bank is key for the trustee
I’m watching and I am not understanding how this system is supposed to work. I need you to do a couple of months of math to show what I am supposed to do. All I understand is that you get a LOC and put that on your mortgage ….then what I’m now paying an additional “$100”or whatever the interest is on 10K you don’t explain how to continue how does that get paid off with me still paying my bills out of my 10K salary (in the example) or is it a one and done? Can you please explain it further?
I really like the video on the older gentleman with dental bills. It was very thorough and easy to understand
Thank you
I was told not to get a Line when i applied for my 3rd LOC. She said sir dont get a 13% LOC when we offer a 6% loan. I said if you cant give me the LOC i dont want a LOAN. Lol. She then went on about a loan. I simply cut her off and said no thanks i will go elsewhere to get my LINE have a good day and hung up. Why she kept calling back and i didnt answer.
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
Wheres the part where you have to pay back the 10k the vid implies you only owe the interest back?
Can I see one with 60,000 cc debt, 1400 month income, 1000 month expenses?
She done LOST me at some point
*cries in $750,000 mortgage @ 8.25%* — just bought our home 6 months ago
How about you just save a deposit
Should i pull my home equity and pay into my principle ?
Okay I'm just going to have to save some of your videos to an outside source cuz you're really putting it down on here I really enjoy watching your videos right now I don't have a mortgage but I sent it to friends of mine that do thank you for what you're doing by the way it's good information to know wish they would teach this in high school
This is awesome information
God bless you and your family
1.07 to the tenth power = 1.96.
What thus means is that at 7% interest you will pay double in 10 years.
Mortgage rates are currently at an all time high since 2000(24 years) and based on statistics on inflation, we might see that number skyrocket further, a 30-year fixed rate was only 5% this time last year, so do I just keep waiting for a housing crash before buying or redirect my focus to the equity market
Finally a practical woman 👠 on YouTube
For those that truly need help with paying off debt, and just living a decent standard of living in today's world, this will make zero sense. Why, because most lack a true level of intelligence in understandimg the meaning of the numbers. Not trying to sound cruel, just sincerely honest. How about drop the numbers and explain the concept. Throwing a bunch of numbers at people without a simple basic context will not work.
GOD bless this woman! Remember, usury is a mortal sin. Christy gets it!
Could you technically do this every single month with your payment? Charge the 10k, put your paycheck on it each month, & pay the 10k each month?
The poor just need to start eating the rich…
i can't pay my mortgage or car payment with a credit card so how do i get around that?
I am living I canada, how can this benefit me. I love your show
We go to school for years and college and they never educate us about that 😢. We watched the tv all life and never educate us either. Pure evil
💪💪💪💪💪💪PAY IT FORWARD!!💞💞💞💞💞💞WELL DONE GAL!!
I am boggled at how bad average people are at simple math. They literally think you still have to pay all 30 years worth of payments if you pay the total principal off early. 🤦🏼♀️ dear Lord. The US education system has failed us. This speeds your amortization schedule up significantly each time you pay down principal. Financial advisors recommend paying extra on principal every month to reduce interest paid over the life of the loan. This is the SAME thing but you’re doing it in big chunks quickly.
I am 63yrs old retired refinanced my home 3times n have been paying my mortgage since 1998😫😫😫😫would luv to do this but I still do not understand where the line of credit comes from.. is that money from my home equity n how do I attach my pension to the line of credit to pay for my bills.. im drowning in debt n im about to withdraw money from my TDA n get hit with 20% tax🤦🏻♀️🤦🏻♀️🤦🏻♀️🤦🏻♀️🤦🏻♀️🤦🏻♀️🤦🏻♀️I’m sooo financially illiterate ☹️
My mom is trying to buy a house. What would you recommend. Should she purchase a home? How can she avoid this trap? And still buy a home.
Two questions, will the bank even give you a line of credit if you alrrady have a loan and why shouldn't you just pay of the principal with your salary. Lets say 5k every 3 months?