1st VS 2nd Position HELOC: Which One Is Better?

You're probably wondering by now... "Do I go with a 1st position HELOC or a 2nd Position HELOC? Which one is better? Which one works for me?" So... in this video, we're going to talk about the Pros and Cons of each types of HELOCs and break down which one might be a better fit for you to help you pay off your mortgage FASTER using a HELOC. Enjoy!

📊 GET OUR FREE HELOC STRATEGY CALCULATOR & EBOOK:
https://bit.ly/2WZUPpm

How to Pay off your Mortgage in 5-7 Years: https://youtu.be/3f-ebCjeH8o (Original Video)

By now, you already watched our original video, "How to Pay off Your Mortgage in 5-7 Years" or "How to Pay off Your Mortgage with a HELOC". In either video, I talk about how you can use a HELOC to pay off your mortgage very quickly. You've probably done some research and you're learning about the fact that there are two main types of HELOCs... First lien position HELOC versus the second lien position HELOC which tends to be more common.

Here are the main differences...

1.) 1st Position HELOC
- Less Risk to the Bank
- Lower Interest Rate
- Able to consolidate other loans into one account
- Can be used to purchase homes without having to get an installment loan mortgage first
- BUT... Slower payoff period and you pay a little more interest than the 2nd position HELOC.

2.) 2nd Position HELOC
- Higher Risk for the bank
- Slightly Higher Interest Rate
- Smaller Exposure to Risk for you
- Faster Payoff Time
- Lower Interest Paid Overall

Now, when it comes to the Lien Positions of the HELOC, it has to do with which bank gets paid first in case of a bankruptcy or a foreclosure. In an event that you get into a foreclosure or a bankruptcy, your asset (home) has to be sold through the means of an auction. Once sold, the proceeds are used to pay off creditors and any government entities that are still owed taxes. The 1st Position Mortgage or a HELOC gets paid first. If there are any leftovers, the 2nd Position Mortgage or HELOC gets paid. Subsequently, any other junior lien holders get paid off.

However, if there aren't enough proceeds, then the 2nd position HELOC holding bank may not get paid which means that they lost money lending the money to you. Therefore, you can expect a higher degree of risk for the banks and may charge you more interest.

Overall, we believe that neither 1st positon or 2nd position HELOCs are good or bad. It depends on your situation and how you use it. We do believe, however, that if you have a smaller principal balance of $100,000 to $250,000 ; the 1st position HELOC might actually work out better for you. If you have a larger balance such as $250,000 to $1,000,000 principal balance, then the 2nd position HELOC might actually work better in most (not all) cases. This is due to the fact that your allowing the HELOC to be exposed to smaller balance at a time!

😃 Thanks for Subscribing & Liking our Video!

The Kwak Brothers are millennial real estate investors who have acquired over 82 Units of Rental Units and have raised over $20,000,000 of capital for their real estate deals. They are based out of the Chicago-land area and they are dedicated to helping hard-working people become financially free real estate investor! They specialize in owner financing acquisition and raising capital. They are the creator of the FORCE Strategy (Find the deal, Owner Finance It, Raise the Capital, Cashflow It, and Expand your Financial Freedom)

OUR FREE ALL-IN-ONE SOFTWARE: https://www.cashflowcolony.com

⌨️ FREE 7 Day Trial To PropStream Real Estate Investing Software:
http://reisoftware.thekwakbrothers.com

📊 GET OUR FREE HELOC STRATEGY CALCULATOR & EBOOK:
https://bit.ly/2WZUPpm

📋 SIGN UP FOR OUR FREE OWNER FINANCING COURSE:
https://freeownerfinancingcourse.com

💻 JOIN OUR FREE FACEBOOK MASTERMIND GROUP:
https://www.facebook.com/groups/bestreigroup

GET SOCIAL WITH US:
📣Facebook: https://www.facebook.com/thekwakbrothers/
📣Instagram: https://www.instagram.com/thekwakbrothers/

🔊 📧 Hire the Kwak Brothers to Speak: info@thekwakbrothers.com

#HELOC #VelocityBanking #HELOCStrategy

========================

---DISCLAIMER--- The suggestions, advice, and/or opinions that are given by Sam Kwak (The Kwak Brothers) are simply opinions. There are no guarantees of set outcomes. Listeners, guests, and attendees are advised to always consult with attorneys, accountants, and other licensed professionals when doing a real estate investment transaction. Listeners, guests, and attendees are to hold Sam Kwak, Novo Elite, Inc. and the Kwak Brothers brand harmless from any liabilities and claims. Not all deals will guarantee any profit or benefits. Listeners, guests, and attendees are to view and listen to all materials and contents furnished by the Kwak Brothers as a perspective based upon experience.

Видео 1st VS 2nd Position HELOC: Which One Is Better? канала The Kwak Brothers