HELOC or All in One Loan + Whole Life or IUL Discussion

We are trying to get an all in one loan, but it's hard. Seems the fact we bought a business about two years ago, we don't have exactly two years self employed history makes it difficult. Should we go for a heloc? It will be first position as we don't have a mortgage. Do you and mom live together? If I'm saying your name, Charles. Okay. All right, so five total and it's a paid off house. You're, you're the homeowner un wife. It's in a trust. Okay. Yeah. So instead of the all in one, because the difficulty with all in one is you're, you're getting a massive line of credit. So you actually have to qualify your ability to pay as if you had the whole thing owed. I think that's how they look at it. And then obviously the whole two years tax returns, you don't really have too much to show for, but you got all this equity available. You'd be much better off getting a standard home equity line of credit, which technically is in the first lien, but it's not a home equity line of credit on the majority of that equity. So if we're trying to do accomplish velocity banking because we have other debts, is that what we're looking at? Yeah, I think getting a simple 150, 200, $250,000 HELOC with no closing costs, I'm gonna have a much easier time getting approved for that than an all in one where it's kind of like especially on a, on a home that's paid off, it's kind of like purchasing again almost in a way like you had to go through all that closing costs and all that, it could be too much, especially if we don't have the capital and income to show for it. So whereas a second lien traditionally like HELOC at a credit union bank, they're going to see all that equity there and as long as we've got income to show for and decent credit, then getting approved is going to be a lot easier than the all in one. So that's where I would personally start looking at and we can have a conversation, can look at the entire situation, what you're going through so that we can evaluate the best bank that we would want to work with. But yeah, that would. So then it's velocity banking to invest with a slight amount of debt elimination going on. Doesn't sound like a whole lot, but it's mostly being used to, to invest, acquire another rental and then you basically do velocity banking on what you leveraged to, you know, pay it down and then do it again however many times you want to do it over, over 10 year period. Because most HELOCs are 10 year draws. So you have a nice time frame to acquire properties. Do velocity banking, all that stuff. Go ahead. You were going to say something. Okay, I see. Yeah, let's definitely have a conversation about all those, putting all those pieces together, see what makes the most sense and also knowing that when it comes to the whole life side, there's a capitalization period, there's a building period depending on how much we want to fund through there versus what we're going to have available to invest. I want to set a really good foundation on that so that we don't set too high of an expectation with these whole life policies. I think that's what happens with a lot of people that look at combining velocity and infinite together. It's great when there's more money to work with. If there's not a whole lot of money to work with and we're leveraging a lot of debt to make it happen, you have to give the actual policy time to build and get a higher net internal rate of return inside of there so that when you are borrowing and leveraging that you're able to pay back the loans in a very short, reasonable time frame so that the policy doesn't blow up on yourself or you get to a point where, oh no, I'm not able to fund as much as I wanted into the policy as I initially intended. So when we have a much stronger foundation, such as how much do we want to save into whole life first, let that be your minimum. How much do we want to leverage to invest? And that'll be your gap for invest. So let's just say you want to save 10, 15, 20,000 a year. Okay, that's our, that's our baseline. But I want to be able to put in 50k because I want to borrow 30 maybe the first year along with other capital to acquire that rental property. That cash flow is going to come back. I'm going to continue velocity funding. Paying down loans sounds a little more complicated as you get into thick of it, but I think I do believe in a staged approach where we can first figure out what are you saving on top of what are you investing. How are we going to use whole life to actually protect your investment and not rely on whatever we think velocity infinite might, might do, may or may not do. So let's just keep that in mind. So what we. Yeah, so what we want to do is actually do an audit on the Iuls that you do have, looking back at how you've funded them versus the max amount that you can pay in, and then also looking at the performance of these Iuls. And let's see what are the likelihoods of these Iuls staying in force as we get older and older. Right. So we want to really, really pay close attention. I got. I have a lot of clients that also have IIULs, and there's three important numbers. You've got what's called your minimum lapse. It's one number or we can say minimum premium. Most Iuls I see are flexible adjusted index universal life insurance policies. So you can kind of go up and down in funding, and that's the whole. You can call that a benefit, but it ends up being a detriment to the policy. So minimum lapse premium, that's the lowest amount you can pay in. Then there's something called target premium or guideline. That's a dollar amount for, I would say, minimal optimal performance, depending on how your agent issued the policy. You've got, hey, this is the minimum you need to pay into your premium every year, or else it'll lapse over time. This is the ideal number that the insurance company, not the agent, that the insurance company is saying you should pay in. That's the target, ideally. And then there's the illustration number, which most of the time is like in between minimum and target. And then there's your MEC limit max number. What I want to look at is how long have you been funding these policies? How have you been funding them each and every year? Did you do the minimum? Did you the target? Did you max? And then I want to look at performance. And then I can give you a audit to say, look, instead of funding the whole life, as you mentioned, depending on how these are performing, you may want to direct whatever new dollars you have and continue funding in here. Or depending on what we discover of your two policies, if they're underperforming and I look at the guarantees, I look at the midpoint assumptions. I look at the original illustration versus now. I'll look at, did they reduce caps? Did they increase charges? We look at all those different things inside the i1 and I can literally, I can not give an opinion. I can show you the facts inside of the policy and say, hey, if you keep funding it the way you are now, or even if you did it here, you have now increased your chances of this IUL creating a lapse later on in life. And to avoid that, two options. Fund it to the max. And I'll literally, I'll show you a paragraph where it says, you know, policy may terminate if more premiums are not paid into it. Right. So we have to look at, okay, how much more do I need to pay into this to make sure it doesn't blow up on me? How much cash value has built up in there? If we're not confident in the performance of these, long term, not just short term, but long term, because you're going to have your whole life. If we're not confident, then the other option, 1035, exchange into a whole life that has more guarantees, more protective measures, short term and long term, then that gets you the capital and then you're able to leverage more efficiently to create the desired returns that you would want. So those are two ways of looking at it, I think. Before we even throw in the whole life conversation, I would rather look at what you already have and see, okay, are there loans on there? What's the cash value? What's the loan interest rate? What's the performance? How are these things helping or hurting this family in order to make the best decision moving forward? So we want to take a really, really good deep dive. I don't know if you've ever done that before, but it is so worth it before even taking a look at.