Home Equity Line of Credit - Dave Ramsey Rant

any of you old enough to remember when the real estate market crashed in 2008 you couldn't give a house away house prices dropped some of the markets the bubble burst there was some dramatic bubble bursting out there well I'm happy to report that almost every market has returned its value home prices are back to where they were and Beyond and most major cities in America today the real estate market is white-hot like 98% of them there's a few places that have problems that are not national economy problems their local economy problems and you know the micro issues within that city are screwing up the city but that's different most neighborhoods in most cities right now are white-hot you put a house on the market you get multiple bids by the weekend most of the time right now you've got that and that is driving prices up of course because any time you've got it's a simple supply demand economics lesson from the seventh grade if you had seventh grade econ if there's such a thing anymore but you know when there's a limited supply and a whole bunch of people chasing that limited supply that drives prices up when there's an oversupply and not as many people chasing is something as much as there is supply drives prices down it's called a glut in the market it's pretty simple we know that scarcity drives price up in other words and when a market is white hot like the residential real estate market is right now vices are generally going up and you know that is creating a couple of situations in the real estate world that we're running into out here and I'm talking to you about it one problem is this market watch came out this week and said 1.6 million homeowners are predicted to get new home equity lines of credit in 2018 now that people have equity what are they gonna do go borrow it well that's just stupid but there's 1.6 million people out there they're getting ready to do something stupid according to this report don't go party your equity out of your house especially on a freaking home equity loan it's the credit card of the mortgage world you don't a home equity loan is it's a good chance for you to lose your home let me tell you why most of them have an annual or biannual and every two two year call in them meaning the bank can just decide they want all their money and you have to go get another loan or have the cash to pay them off right then or they foreclose I mean it looks like something in an old 1930s movie or something but everybody just bee-bop's along and acts like it's nothing because usually they don't do that but they have the right in the paperwork to just decide they don't like you anymore and call the loan you know the second thing is you know what the interest rate on your home equity loans based on your bankers mood it's not tied to any index it's not tied to any national publishing it's somewhat controlled by competition but you know when they change they just change it it's completely variable and it's variable based on I think we can get a little more out of Georgia this week let's just raise it and they just raise them or they might lower them but not very often and so you're setting yourself up in a piece-of-crap loan with a call and a variable rate that it's based on the bankers whim that's just dumber than a rock that's just dumber you are asking for trouble and then when things turned down you're gonna go oh well I didn't think that was stupid cuz hey when things are going really good stupid gets covered up stupid can look smart when things are good but like Warren Buffett says when the tide goes out you can tell it was skinny-dipping when things go down there's a home equity loans gonna be yeah well where were you in 2008 I mean were you not born yet seriously how did you have no idea you didn't even look at all you cared about was I wanted a new kitchen princess come on shut up stupid butt stuff don't do that don't do that don't borrow this equity out you're supposed to be building wealth in the ownership of your home not constantly borrowing it out to buy crap and that's what your home equity I'm gonna move my credit card debt over there I paid off my credit card debt with a home equity loan see that statement right there's the dumbest thing I've ever heard here's why it's dumb you didn't pay off your credit card debt you moved it onto your mortgage so you go to the steak house and eat a steak talk about buying a depreciating asset on that put that on a credit card and then when you can't pay the credit card you roll it over to a home equity loan then when you can't pay the home equity loan you put it in your refinance on your new 30-year mortgage so now you've financed a freaking stake over 30 years this is stupid on steroids and this is what people do regularly this is a problem folks it's a problem every time things get good people get lazy financially fat sassy and undisciplined and not watching what you're doing one of the key elements of becoming millionaires not borrow on your houses get your stinking house paid off it's one of the key elements of becoming a millionaire all the data points show us that the citizens stuff I made up don't go bar on your home equity loan and oh by the way some of you they've been thinking about selling your house I don't know what you're waiting on I can't you know you're supposed to buy low and sell high it's high it's high if you were ever gonna sell a house right now is the time to sell it right now this minute jump on line at Dave Ramsey com click on the lp for real estate get you on these high-octane high protein real estate agents and get the sign in the yard I can do it myself because I'll just get multiple offers yeah there's a good way to lose an extra three percent and three percent of two hundred thousand dollars is known as six thousand dollars because you don't know what the flip you're doing and you're you know you hire a professional to work on your teeth you hire a professional to do your will you hire a professional to do your taxes and work on your car but you're gonna sell your largest asset by yourself that's stupid don't do that a monkey can sell a house in this market but that doesn't mean they did it right don't hire a monkey don't hire it real estate they just been in the business for twenty minutes because they're your my aunt Jessie just got her license that's a good way to screw stuff up right there stay away from aunt Jessie till she figures out how to you know like these doctors my practice that's cuz your practice and still yeah I mean don't get somebody still practicing get a professional that's getting it done that knows what they're doing somebody sells three houses a year and sold ten houses in their lifetime that may be selling you're the largest house your largest asset and this is time to do it baby so put it on the market max it out get the most you can get for it it's a really good time to sell a house if you're thinking about moving I've always wanted we'll do it what are you waiting on I mean don't wait a little things get bad this is the time white-hot on fire get you a white hot on fire real estate ELP at Dave Ramsey come get somebody knows what they're doing it sells 50 60 80 100 houses a year knows what the flip they're doing maximize the asset and for God's sakes don't go take out a home equity loan on a stupid thing hope that's helpful because I don't like to be unclear this is the Dave Ramsey show

Channel: The Ramsey Show - Highlights

Views: 1,034,949

Keywords: Home Equity Line of Credit - Dave Ramsey Rant, heloc, home equity line of credit, mortgage, replace your mortgage, truth in equity, real estate, real estate investing, home equity, credit, loan, heloc to pay off mortgage, heloc explained, heloc dave ramsey, heloc vs home equity loan, heloc mortgage payoff, heloc for investment property, dave, ramsey, show, dave ramsey, debt, money, the dave ramsey show

Id: kz8okb5rk-g

Length: 7min 46sec (466 seconds)

Published: Fri Jan 26 2018