Velocity Banking Strategy With A 1st Lien Heloc

Another person giving me most of their numbers or some things that are blank, I don't know. I'm assuming as it relates to their student loan that it is on deferred payments. Most people have them on deferred at the moment, so I'm not going to hold that against them. Don't know what the interest rate is, but that's okay. Also person does not have a debt tool at the moment. According to the spreadsheet. They did show this is another person that also has a bank account or a savings account with Hartford Federal Credit Union. So we could skip over the me showing you the bank again. We already, you know, kind of did that. But this is really cool. This is their numbers. Four major numbers. Cash flowing a thousand making just under four total debt just under 200k. Got these two credit cards here. Got a timeshare. This is a loan, student loan mortgage debt payment 3% rate value is 308,000. They got 26,000 plus cash on hand opportunity. I see here again potentially considering a first Lien heloc.

Right.

They could go with that bank I gave you guys last week. Another service, a bank called First Savings Bank. I dropped the link last time. I can do it again on this call for you all but it's on my website. It's on every video in the description of every video I put out. So it's there very accessible. What I do like about that bank in particular and I'm actually going to drop a video where I interviewed an individual that works at that particular bank and how they're helping good amount of my clients get a first Lien heloc. I'm just going to blow this up just so you guys can see this particular video. It's like two, two hours 20 minutes long. We went very, very deep into it. Name of the name of the bank is First Savings Bank. For those are like okay, I don't bank with Hartford.

Where do I go?

Denzel I this could be an option. This bank services everywhere except for Texas, Maryland, Alaska and Hawaii as you see on the top right there. And I just kind of broke down the HELOCs cost, the fees requirements, things like that. So this is a great, great resource, great video to watch to really fully understand, comprehend first lien HELOCs and this one in particular. So I'm going to put that in the chat for you guys. Let me just do that real quick so I don't forget first lean ELOC resource boom. That video is not public on my YouTube channel just yet. And editing that one and I've been trying to coordinate with their entire team. I'm actually trying to interview pretty much everybody on their entire team. And then I was going to drop a little series on my YouTube channel regarding that specific tool. But again, that's one of many different helocs in the marketplace. It's all a matter of, like I said, reading between the lines, doing the homework, all that good stuff. For this particular case study, let's just say that they, because they already bank already have a relationship, they've got 20 plus thousand sitting in that bank. I'm assuming they've been building that for a period of time. If I'm only making $3,800 a month, pretty sure they've been banking at this bank for quite some time. So if that's true, we got Hartford Federal Credit Union, First Lien, HELOC. We know that that particular bank does up to 80% LTV. So 308, 300 grand, call it around 240 is the max that they would lend this person according to their value of the home. So let's just say they got approved for the max.

Cool.

First thing that happens, I'll owe 137 34, move 3 to 5.5%. We know 3 is actually higher than 5. 5 is lower than 3. As it relates to what we actually pay. I can get that rate much lower.

Right, Right.

We look at cash flow Times that by 12, we look at the 240 times 2/3. This would be the say, generally speaking, the highest. I go anywhere from 12 to 158 chunk range.

Okay, cool.

Now typically when I see people with lower income numbers, I do get a little. I pay very close attention to leverage. When there's higher income, there's more volume coming in and out of the line, which means better manipulation on the rate itself. The lower the income I have, the harder it is to actually offset a big balance.

Right.

As it relates to their income. If I had a smaller line, say a 20,000, what a 15, 25, then it would be easier with a lower income. So when I'm looking at people's income in the twos and the threes and the fours.

Right.

I do pay close attention to that. Now there is an opportunity just like the last case study, with the cash on hand, if they come to the conclusion, yes, my money isn't doing anything in the savings account, isn't earning me anything, is devaluating according to inflation and taxation.

Right.

Money's worthless anyway. I could reposition this money in here to dramatically affect what I actually pay in interest.

Right.

Also understanding that this 13, 12, 87, once it gets refinanced, becomes cash flow, becomes an amount that stays in the line itself. So again, that 28, 44, 34.

Right.

1312 of it was coming out versus with a first lien heloc. It's no longer coming out. It just stays. Right. Every time the paycheck lands, it just stays low as a rate. So what's actually coming out is whatever the person's expenses are, these other debt payments and whatever other living expenses that they have. Again won't even factor that in overestimating. Just to show how, how powerful it is even when you don't factor in everything.

Right.

I'm being quick here. So let's say we did that minus the cash on hand that they have. It's at the same bank, right? What's the difference?

Right?

This money is at hfcu. Get a first lien, same bank, nothing changed. That's what I like too. So minus now we're at 111, 070 and 34 cent max chunk. 158. Let's look at that. So this is say the max I'll go of what I will chunk at in addition to getting rid of that whole entire first lien mortgage. Again, no cost. If this person.

Right.

According to that bank, no application fees, no penalty, no origination, no appraisal fee says no application fees.

Right.

Even when they say that, still read the lines. Right? So still read the terms and agreements. Don't overlook it. Just keep, keep looking at that. Because these banks, they try to, they try to finesse and finagle. I don't trust them as far as I can throw them.

Right?

You've heard that line. So I have that same attitude. I'm cool with you. But I'm. I see what they're doing. I see the plans. Not buying it. I want to be my own bank one day. And that's very possible within the breaking chains community. Imagine if there's a bce. BCE Credit Union. Oh come on. BCE Credit Union. Only way to get in. You gotta break your chains. We only accept free folk in here. Or people who want and seek to be free, who want and need to be helped. Like they, they need financial freedom. They walk into that bank. Hey, how you doing King? How you doing Queen? Welcome to BCE Credit Union where we help people become financially free. That's a slogan. I don't know. Let me, let me come back to numbers. I get all excited because I Start thinking, thinking big, right? And that's what we need to do in this house. Start thinking big, folks.

Big.

It's exciting. Anyways, looking at this case study. Coming back, coming back, come back. 11107034 is what the balance went down to. Max chunk amount being 47 and some change. What could we get rid of? I'm looking, I don't know what the interest rate is. They didn't put that on there. So I will ignore that. It's such a low payment. But I am very interested in, interested in this credit card, that credit. So 10.4, 24.4 and this 14%. What could I get with that? So 28, 3068 plus 533473 and 13,973 95. Say we just stopped there. Just chunk that until we get more data. We probably could throw that in there if the rate is, you know, pretty high. If it's at zero, we to ignore it. This is at zero. No payments, no payments at zero. More than likely we ignore it till it kicks back in. Then we'll address it with the debt tool. Until then we're going to maximize what we've chunked.

Right?

We always, we want to make sure. Yeah, it's a, it's a great rate. We know we're going to manipulate that. We also want to make sure we're actually paying off what we move.

Right.

That's, that's key. So let's say that's the chunk and the cash flow gain would be the 57 bucks, the 156 and the 236, 97. So not bad for 49.97. So nearly $1,500 in total cash flow. So we add the balance that it went down to add that chunk. 22,139, 36. Here's where I will likely be at. And we know good and well that because this person doesn't actually have a debt tool yet, it might take 30, 60 plus days just to get, get the HELOC, right. There's an application process, there's a screening process, there's a evaluation process, there's a pregame process. The client needs to know what they're doing. So they need to study. Just like Pearl said, a lot of discipline, a lot of, you know, watch Denzel's videos. Any one of my clients will tell you, just watch his videos, watch his videos, Watch the scenarios, right? Commit the time, study. Get to know your bank. Build a relationship with the loan officer who handles that department of home equity line of credit. Get to the source, right. And extract as much as you can. That helps us move forward very effectively. So 133, 209.70 is the, is say the highest balance that it'll be. But we know good and well that we just start doing debt snowball. In two months this gets wiped out nearly right. So that number we're down and then you're paying the monthly payments for say 2 months, 3 months, 4 months, however long it takes to obtain the debt tool. So we already in overestimated numbers here. 133, 20970 is what it goes to. Take that 284434 minus 449. So new expense number. So income goes in, expenses come out and we know we didn't factor that in.

Right.

So this would be an interest only payment. Let's take that 133 number. 209 times that by 5.5%. This is what we would pay in a year if we just made interest only payments.

Right.

But that's not what we're doing. I'm just showing you this is what would only be required. So that means we would go from 131287 minus $610.54. So technically you need a minus 70233 because that's no longer coming out of the line of credit. This is what the line of credit is charging. So that does get pulled from the balance itself. So it'll just add to your balance. That's the cool thing about HELOCs is when it says hey on the due date, first of the month, fifth of the month, whatever it is, says you owe 610.

Right.

Let's just say that was the interest for one month, 600 bucks that will come from the balance of the HELOC. So it's not like I have to pay $610. Why I already paid it each and every. I already paid it in advance.

So.

So when the due date hits, whatever interest was owed for the time that I was doing velocity banking, it simply just, it just pull it from the balance of the equity in the line of credit itself. That's what's really cool here.

Right.

So technically, and we didn't do this in the last case study, but I figured I'd try to do it here. It may not be as accurate because I'm not sure if taxes, insurance and other stuff is included in here.

Right.

So just do the 239437 minus 702 33. So technically this is what their expenses are, somewhere around that number. So you see how this becomes all principal now, whereas before it was principal, interest, taxes, insurance.

Right?

Whereas now it all becomes principal. Because when I pay into a first lien heloc, right? When I pay into it, it's an interest only payment. So therefore interest should only get charged like on the due date. It'll add it up, boom, on the due date, that's what you owe. But before that, when money goes in, it's principal each and every time going into it. Now, not all HELOCs are treated equal. So this is where you'll ask these very critique questions when you're talking to the bank before you get your heloc. You see with first Lien heloc, that service and that video that I dropped earlier and you'll see the link their particular first lien heloc. We mentioned this last week that anytime money goes in before the due date, it's principal first, which affects the actual interest on the due date when it's owed.

Right?

So the due date is out there, Right? Way out there. Meanwhile, upon obtaining the HELOC, your first payment is what, usually 30 days later, right? 25, 30 days later. Well, in that time, what are we doing? We're dumping all our income in. So it's principal first. Some HELOCs are principal and interest. So when you make a payment, boom, it charges the interest right then and there, which is fine. It's basically the same thing because they're both calculated simple interest. It's just one is requiring only interest only payments on the due date, while the other is requiring a principal and interest payment on the due date. That is the only difference. But they're both being calculated the same interest, doing the same concept. Money goes in first, right? Income goes in, expenses come out. In this case, since we went from a first lien mortgage amortized monthly payment to now a variable rate first lien heloc, that's the difference, right? So what's actually coming out of the HELOC would be these other expenses, right? Well now we know that if we just did those three. Well, those are gone. Those three are gone. We didn't have all the data here. We could probably throw it in if it's, you know, a high enough rate and just get that 81, 91 and what's a couple extra grand? Not a killer. And then we'll leave that alone. Leave that student loan until it comes in. If this is at 0%, leave it alone until the interest Rate comes right before it kicks in, we move it into the line, right? And just keep it going. Then I would tell this person, hey, what can we do to get this up?

Right?

You got the strategy down, great. This is basically on automatic. All you need to know is money goes into the HELOC and expenses come out when they are due. You pick one of these credit cards or if you have another credit card, your favorite one, highest cash back rewards, and use that to run all your bills. To help offset this number, we're reducing that number as close to zero as possible.

Right?

At that point, it's fully automated. Money goes in, money comes out. Money goes in, money comes out. You can set up direct deposits with a first lien heloc. They give you checks, they give you the ability transfer money in and out between different accounts. You may receive a debit card, credit card where you can, you know, swipe, pay any type of expense, right? What I tell my clients is, okay, you, you list out all the bills that can be paid with a credit card and you would set up autopay on that credit card, write it out, switch my marker here because I think it was dying. All right, so bills with credit card, line them up, lay it all out on the spreadsheet that I sent you. All you put a Y or an N. Y means yes, can be paid with a credit card. No means no, can't be paid with a credit card. List it all out, you'll see that final total number. You say, okay, great, it's from this 1692. Let's just lowball it. Say a good 900 bucks this person can run through a credit card, get 2% cash back rewards, let's say $18. Okay, cool. Then on the credit card itself, you set up autopay, right? Set up auto pay from the HELOC this way, that's automated. This way you only pull money out at the exact point point in time that money needs to be pulled out, which means you're keeping your income in the HELOC for as long as humanly possible. That's the goal. You want to keep money in for as long as possible, manipulating that rate below what they told you they gave it to you at. So autopay from the heloc. The statement balance, not the monthly minimum payment. We don't want to pay any interest here, right? But the statement balance, not the total balance because because of this $900 on the due date, the statement balance might say, hey, you only owe us 450 for the month of August or September. Okay? So you only pay the 450 because the other 3, 4, $500 or whatever it is is not charging you any interest. So let that bill or bills float an extra 30 days or so, and you just keep doing it over and over again month to month. The only money that's coming out of the HELOC at this point in time would be any expense that can't be paid with a credit card, right? Anything that cannot be paid with a credit card. Taxes and insurance, Right. Water bill, gas bill, maybe whatever cannot be paid with a credit card, pull it out of the HELOC to the checking account. Checking account pays the bill, right? Some first HELOCs allow you to pay your bills right from the HELOC. So, you know, never really are taking money out. It's like on auto. And so you're killing it at this point, right? All money is being used very effectively. So if we were to use that number, income goes in 3868. Actual net money expense coming out is 1692. 04. We can see how we can absolutely bring that 5.5 to like 4. 3. Less than 3. And then I would say, hey, how do we get this money up? How many, how many people can we talk to to bring them to BCE to receive the affiliate commissions, right?

Why.

Why are we playing games? There's a lot of money to be made, right? So let's. Let's not play games. Let's not play with our time. Let's talk about how awesome BCE is. Get people enrolled, right? Do the presentation. Show the presentation. Show the presentation. You know, it's the discipleship. Just keep doing over and over again. Go out two by two, keep doing it, and then figure out what are my skills, gifts and talents. What. What is God's will for my life and how can I move forward? What is God's will for my life and how do I monetize that into a business? To go from, you know, 3,800amonth and just add a zero, move the debt, move the comma to the right. Is that such a problem? That's not impossible to do, right? And even if you fail miserably and only double up, well, now you're making double, right? Plus six grand. Not bad. Not bad. This case is done. That's the strategy. Go. Do the work. Make it happen. Talk to the bank, make the relationship. I want to see people moving in this community. I want to see people moving. They're like Denzel, I want to see the emails coming in. Denzel I did what you said. Da, da, da.

Mhm. Mm.

Yep. Like, I feel taller, Denzel. Yep. Wife. Wife said it. It must be true. It must be true, right? You showed her the title to the car is done, right? Or wife. You talk to husband. He says, hey, did you lose some weight? What's going on? I don't know. Like, it's exciting. Stuff starts getting paid off. You feel lighter, right? Shoulders come out, better posture, right? I don't know. You start walking, different things just seem different. Why? You just broke some chains. Oh, my goodness. You just broke some chains, right? This stuff. This stuff is powerful, man.

We.

We go into this. My goodness.