![]() ![]() It might be obvious but have a conversation on which appraisal is being used or be disappointed like when Coke switched your C&H sugar for corn syrup. Sometimes it might be worth it to pay the extra fees to get a real appraisal instead of the lazy man method. These desk reviews utilize the tax assessed value which usually lower than if you paid $500 for a real appraisal or a cheaper “drive-by” appraisal. This usually is more conservative figure and hurts you because you want your home to appraise for the most that it can in order to qualify for the biggest loan. In order to cut costs some banks will do a desk review to determine the value of your property. for this scenario, we estimate that all $1200 and would have to be paid (which $500 of that would be covered by the new lender). He intends to hold for 3 yrs, so he didn’t get much details on how much of the closing costs he would have to pay back…. Someone who just did this with a credit union… for a $200k loan, the closing cost was about $1200 (which were covered by the cu) and he paid $700 for an appraisal. I’m still confused… walk me through a real-life e xample Perhaps it makes your life so simpler that you free up time and mental bandwidth to invest in real assets such as rental real estate or passive syndications? This minimizes movement and makes your life simpler. ![]() Take the lowest of the 2-3 year HELOCs and just go with them. Option 2 (for the lazy): Although this is not optimizing the rates this method is a little simpler if your time is so valuable like you are coming up with the cure to some rare form of cancer. Yes, we thought this out like the Sunday arm chair quarterback strategies-out the running back rotation of the Denver Broncos. Notice CPB is put in the 2nd order because they will waive the cancellation fees from the host bank prior. A good way to do that is come to have a beer with other sophisticated investors at ReiAloha. These rates change and so do the fee structures so try to learn this stuff and connect with other investors. If you need to do a third time – a few years out, then go with whichever one you didn’t go with for the second HELOC. At the time of origination, can check rates to see if you go with another 1 yr (with ASB) or 2yr (with CPB). For ASB, as long as you have $2500/month in direct deposits then there are no other fees – setup an automatic transaction from another bank recurring every month to take care of that, extra credit if you send that same $2,000 right back a few days later (that’s almost like money laundering). They both will cover up to $500 for early termination with Aloha Pacific (which would be some of the closing costs that were waived) and no annual fee. Option 1: Initiate a HELOC with Aloha Pacific CU for 1yr 0.5%. ![]() I’m confused… this all sounds great but just tell me what to do So if your home is worth $100,000 and you have $50,000 left on your mortgage then your LTV is 50%. Its not the best way of using equity because you should just sell the asset and be deleveraging into more fixed debt (very counter-intuitive I know but most things are) There is a possibility of the bank calling a loan due or changing the terms as the economy changes Especially when starting a new investing strategy and need proof of concept. Low-interest rate because it is seen as a low risk loan from the banks perspectiveĪ good way to get access to liquidity in a pinch. It’s a line of credit where if you don’t use it there is no interest being accrued. Think of a credit card where your max limit is a portion of your equity in your home with some actually good rates. What is a HELOC (Home equity line of credit)?Ī line of credit where the collateral is the existing equity in your home. The following downloadable cheat sheet was made for Hawaii residents but the concepts discussed are typical as it is a confusing game. Warning – If you have been following the holistic wealth building strategies at SPC you understand that debt is a tool and you need to use said tool to acquire more and more assets that produce more income, more tax write offs, and build your net worth. ![]()
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