Home Owners Making THIS HUGE MISTAKE RIGHT NOW 

The SILENT Crisis - Home Buyers Are GETTING TOO OLD! ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-fV89zcSdBO0.html

It is difficult to make exact projections for the housing market as it is still unclear how quickly or to what degree the Federal Reserve will reduce inflation and borrowing costs without having a substantial negative impact on demand from consumers for anything from houses to cars.

I personally know people that have done cash out refi's or lines of credit because they have tapped out their credit cards. Listening to them brag how they paid them off. Yet sadly 99% of them will run the credit cards back up and eventually lose their house.

When I was a kid I remember my parents talking about having a party and burning the mortgage note when they made the last payment and the house was final theirs free and clear (yes I know, you never really own your home because of property taxes) The whole point was to own it, not have a loan on it -- it was called security for your family. Back in those days, no one, I mean no one, would have ever thought to take out a loan on your house that you so carefully and steadily tried to secure for a safety net for you and your family -- they would have looked at you like you were from another planet because that would have appeared as probably the most fool hearty thing you could do -- today -- common place.

The property tax on that ONE home that Michael showed was $96,000 a year. I realize this was an expensive home but still, that’s one home. What in the world is the local government doing with all this money?

You need to have cash because shit will happen. In the past two and a half years - my house had hail damage and I needed a new roof, 15 year old refrigerator died. Ten year old iMac Computer died. Garage door opener died, an uninsured motorist hit my wife’s car…. No matter how careful you are - things break and stuff happens. Thankfully - we had the cash for all these unplanned expenses. Both our house and one of two cars are almost paid for. We plan to never have debt again when they are paid off.

My mom asked me how I have been right on the economy and the real-estate market. She watches the news, and everything she sees is the opposite of what I tell her until she sees it happen with her own eyes. I told her I learned it from guys like Micheal. She said I thought inflation was supposed to be transitory. I laughed pretty hard on that one.

"A fool and his money soon go their separate ways." My home is PIF and so is my car. I don't live beyond my means. I do my own home and car maintenance and do most of the repairs. Get some skills, Hard times are right around the corner. Really hard times. Prep for it.

People are living beyond their means, buying things they can't afford on credit. Had a new neighbor who purchased land adjacent to mine. He had it all, big truck, fancy SUV, jet skis, boat, four wheeler. He lost his job a few weeks after the pandemic hit and all of his fancy vehicles and toys were gone in a flash.

I wish everyone the best,and I hope all of us survive this mess,on realistic note ,we need too get rid of our current government that is doing their best to destroy America.

Ten years ago I wanted to sell my paid for property to downsize. The market ( Denver area) was good. I found a place I wanted and took out a Heloc loan on my property to purchase before I sold. It all worked out fine at that time with the heloc loan being paid off quickly. However….in these times I would NEVER EVER do that again. Very risky.

I've done a refi with cash out 2x in my life. First in 2008 on my 1st home for a new kitchen and a trip to Mexico. I lost that home on short sale. Second time in 2020 to do my basement that I turned into a 2 bed 2 bath rental. Second time around I had learned a valuable lesson. Debt is only ok if it provides a much higher return on investment.

Don't ever buy a house with a family member they will eventually screw you over😅

Recently a guy joined our ride group he saw that we all had enduro bikes so he went out and bought one but he financed it then he liked our sport bikes so he bought one and financed it he also has a brand new corvette that that’s right it’s financed and his daily driver ram truck is financed and the best part he rents an apartment. Everyone knows that one guy. Never finance your toys rule #1

I took a heloc because I got talked into it as a widow in case I needed help with a cost of my then 16 year old daughter and 11 year old son…I feel preyed upon and the numbers were fudged using social security I was getting for my children. I would never do it again. Thanks, Chase! Expensive lesson learned I’m still paying for today since 2011…

We need to see cheaper Lays Potato Chips- $6.95 for a half filled bag is outrageous…

Hi Michael, I work for a major tech company with over 110K employees worldwide. The company just announced today that starting this April ALL employees worldwide, including North America must return to office. Each employee is required to work at a corporate office location a minimum of three days per week. There are of course some exceptions for those employees not currently living near a company office. However, all future new hires will be required to live and work near a corporate office location and any existing employee that moves in the future will be required to relocate near an office location and return to office. Our office locations I should mention are all located within or near major US and Canadian cities - meaning the influx we’ve seen of people moving away from the cities during the pandemic may slowly reverse over time. I share this post because I believe this is another example and variable which will affect the housing market into the future. If people are increasingly being called back into the office, many may have no choice to either relocate. Also, new and future home buyers may not have the luxury of being able to choose wherever they’d like to live, whether this be in a more rural or suburb area - but instead may be required to find housing in or near major cities.

Im updating my house slowly but surely with cash. Not going into debt for that.

HELOC..Just a fancy namr for : Pawning your home! No different than a title pawn .

I heat my home with firewood from my property, inflation proof energy for the rest of my life 😎👍 I even cook on the woodstove it's a double whammy

Debt is bad, don't overpay for things, don't buy things you don't need to impress others, don't overpay into this Housing bubble

In 2017, I had about $40 K remaining on my condo mortgage and slightly more than that in emergency reserves. I wanted to club the remaining mortgage without losing my liquidity. I simultaneously opened a Heloc for $50K, then killed the mortgage balance. With no mortgage to pay, I quickly reconstructed reserves, then killed the Heloc (never used $1 of it...poor bank, LOL!).

This may be the last time you can get AMS28D before it takes off 4,000%

Thank you Michael for making this important video. I purchased my 2nd house at the age of 32 & when I turned 40 my house is paid in full. I've seen people get home equity loans for cars & vacations ( totally nuts ). I never put my home up for collateral or any kind of risk. Love your videos sir. Stay well & be safe, TMP from N.J.

There are 2 houses and 2 condos for sale in a two block radius from us in Arlington TX. All of them have changed listing reps have been sitting for months. The market is truly in the deep freeze here.

I personally prepped like crazy and spent a lot of money the last 2 yrs. Now I only need food which isn’t much as I’m single. So now I’m saving again and storing nuts.

NEVER TIE ANYTHING TO YOUR HOUSE 🏠. NOTHING ❤❤❤NOTHING AND ALWAYS PAY YOUR HOA FEES AND DUES. ESPECIALLY IN FLORIDA. I'M SPEAKING FROM EXPERIENCE. 🔊 😮😮

I've always been one of the debt free people. I'd lose everything if i tried to make money on stocks or property so i just pay everything off. I'm a simple person with simple needs.

Just 6 months ago I never would have dreamed of it but now realizing how corrupt, literally, banks are if you're in a position where you're about to lose your home, having to file for bankruptcy etc I now won't hesitate or fell bad about taking out as many loans be it home equity, car loans, credit cards etc and do for you what you can. Banks suck. A few years ago I paid off my mortgage and car loan in the same month and my credit score went down, that should tell you a lot too.

I know a couple that bought a recreational vehicle as a tax deduction (second home) and not to really travel much. They used a second mortgage on their home to purchase the RV. As far as I know they would occasionally go from Lancaster, CA, to Lake Havasu, AZ. Well, they got divorced, house prices in Lancaster dropped and they couldn't sell their house, because of the second mortgage. Quite a mess, for a dumb reason.

Every time I get a little money saved, it disappears fast. For example, my car needed new tires, then my son hit 6 ft tall and needed a new bed and mattress - bunk bed no longer viable. Now my daughter needs braces… I just paid off my Sons braces! I don’t feel like I can ever get ahead. I’m a solo parent and live in a very expensive city (can’t move for multiple reasons). I wish my parents had been good with money. I’ve had to learn some very hard lessons as an adult. I love this channel but I admit, it does give me a lot of anxiety.

I think what you missed about using a heloc as an emergency fund is it assumes that the emergency situation doesn't include a housing market crash. If you want to rely on a heloc as your home equity crashes, you might be in hot water.

If you use a HELOC to pay off other balances and, "get yourself out of debt" you may, in fact, be getting yourself out of debt. More quickly, anyway, assuming responsible spending behavior. The problem is that most (more like "nearly all") people don't stop using revolving credit after paying it off. They just find themselves with a nice, fat HELOC balance AND revolving balances accrued not long after using the HELOC to pay them off.

I know your message isn’t meant to be humorous but “HELOC can’t fix stupid” took me right out. 💀

Your short walk down this neighborhood street is a great reminder of why I feel my hometown of South Florida is unquestionably the prettiest place in the country since we're basically in a perpetual springtime season. How people don't kill themselves up north dealing with naked trees every winter is beyond me.

I'm sorry to hear this. I visited Florida from NY a dozen times when my parents lived there. Everywhere we went, the people were wonderful. Hopefully your luck skyrockets and these issues get fixed.

Taking loan out of your home is definitely not a good idea.

I saw the same thing in 2007. People got HELOCs or second mortgages with their “equity” to pay off credit cards. They ended up with more credit card debt and a HELOC payment with negative equity when the housing crashed.

RE: The Air BnB comment. Is it possible that it's because all these ABNB people jacked their rates, provide less, the places are no where near as nice as they should be and hotel rooms are cheaper?

Wow! you are still talking good sense! Thats a rare thing these days. Thanks for speaking the straightforward truth

A home is not an asset it's a liability.

I think the sad thing is that the housing market in Florida is so overvalued and what's crazier about that is if the house pricing goes up more and more that's going to increase your taxes and that's going to cause a whole crap load of people to be listening their homes for sale since they cannot keep up with the taxes and then the county takes the house. So either way you're screwed because if the 30-year mortgage doesn't get you it's the ever-increasing taxes that will definitely get you in trouble because if the housing market keeps the prices going up people are just going to be forclossd

Never convert unsecured debt into secured debt. Treated differently in bankruptcy.

So what we learned now: Think twice before taking money out of your house and If its actually worth it taking the risk losing your home If Something go wrong!

Hey, I just wanted to possibly shed a light on your comment in this video about domestic airfare getting cheaper. It's because they're shuffling all of the migrants around. From what I understand the airlines were having trouble because less people were using them. The government starts buying people air plane tickets, the price is going to go down. I know nothing about how the GDP is really figured out now. But, I think those numbers may be linked to the immigrant numbers, airfare etc. Or I could be way off. Anyway have fun.

I tapped my home equity about 8 years ago to fund a home remodel. We updated the kitchen and made the house an open floorplan from the 1980's design it had, replaced carpet with tile throughout, and updated the master bath including replacing the tub with a walk-in shower. We still have a second bath with a tub. We invested in improving our home and I strongly believe these updates will make it easier to sell if we had to do so at a price that pays back the costs. We have a three bedroom, 2 bath 1600 sq foot home on the lower end of our subdivision so I am confident we will be able to sell. Since then, we have seen a very nice increase in the value of our home and equity as the market values went up substantially. Improving the value of your house is one of the few use cases for home equity loans that I would support. Not customizing it to your individual preference but aligning the remodel to match current mainstream market choices. We have no plans to leave and I am now retired. But you must be intentional on the planned use of the money when tapping your home's equity and understand the costs and clear benefits. And NEVER tap all your equity. It is a loan, not windfall cash!!! Get only the minimm you need for the specific purpose.

Wow! Those property tax rates are off the charts 😮 There's gotta be some serious back room effort to keep home prices so high. No way anything outside of a bona-fide castle could be "worth" the prices these aren't selling for. Major benefit for the tax collector though. Do not overpay! That's just the beginning of the pain.

Michael your information about the trucking industry was spot on. I drive for a major carrier, our peak season in 2023 (Nov- Dec) volume dropped by more than 80%.

When I get those calls from lenders that tried it Excite you about getting an equity line. I yell at them and tell him to quit doing that to people. It makes me angry.

Thanks, Michael! A heads-up, in case you missed it. The House Speaker was visiting the Texas border. He said that the only way to fix the border is to shutdown the Federal government so the States can fix it. I believe that comes up for a vote very soon. Hoping that you can get ahead of the news.

Correction: A HELOC is BAD when people don’t know how to use it properly. It is not bad to consolidate credit card debt. 25% vs 8% you are saving money a month. A lot of banks like the one I work at actually require you to close those cards out. ANYTHING that depreciates I would not put on a HELOC. People don’t realize how much credit card debt there is right now

I watch CNBC and they relentlessly pump that the economy is doing great! 🙃

Agreed! The bank kept asking me to do so (nudge, nudge). I kept saying I don’t need it! Thanks

Michael, while watching this video, an ad played from Rocket Mortgage promoting home equity lines of credit.

i used MY HELOC to pay off all my smaller bills , and put all my monthly income into the HELOC, and i had everything heloc included) paid off in a few years !! (car , medical, repairs, and have my mortgage. ( chunking in more into the heloc, when i have it paid off), i put more bills on it , and pay it off by putting all my income into it , and charging monthly expenses ( normal ). the interest is really low and all of my bills are paid , including most of my mortgage. BUT as Mike said it takes DISCIPLINE!!. it is a good tool and saves you lots of interest payments you pay the bank!

I’ve had family take out 2 and 3 cash out refi to pay off credit cards. I just learned the amortization schedule starts over. I’ve owned 3 homes and didn’t know that! I never refinanced and glad I didn’t!

12:39 I just want to watch how the owner of that Chevy Silverado parks that truck into that space with all those overhanging branches. LOL

HELOC's are AWESOME...as long as you use the money well. Whenever I use money from mine...which isn't very often...I earn much more than the (current 9%) interest rate...and I always pay the balance in full quickly (typically within 60 days).

Still no crash. Prices are still at record high levels.

My neighbor took out a heloc and paid cash for two vehicles... ...he just robbed Peter to pay paul......don't do it!!!!....M.T. from Tampa Fl🎉🎉🎉🎉

Home equity line of credit was part of the destruction of my neighborhood in Phoenix, AZ 2008. I can't believe anyone would do that after seeing what it did to families (homeless) 16 years ago. Some people just don't learn from history I guess.

Thank goodness for channels like these coz it really helps me from shopping unnecessary items. You saved me from spending $200+ lop The only debt I have is my mortgage but I'm constantly building my emergency fund by spending less and working overtime.

I had to make a decision last summer when my landlord wanted me out of the house that we had been renting for 11 years. I could have found a place to rent and paid all of the fees associated with renting (deposits, application, pet, cleaning, etc), as well as paying more per month in rent. A lot of times the application fees are non refundable and you have to fill out an application for each property. Some of these fees were upwards of $300 per person and I had me and my son. That's a lot of money to potentially lose and I didn't want to take the risk of losing hundreds if not thousands of dollars by applying at multiple properties. Plus the rent for a 2 bed, 2 bath apartment was near or over $2,000 a month which was way over my budget. I had been paying $1,600 at the rental house and was trying to stay under $1,700 at the most. I decided to buy a townhome and have a monthly payment around 1,550. I have HOA fees on top of that but it's not going to break the bank. It was a hard decision to make and I don't know if I made the right one. What would or should most people have done in a situation like this?

Mike that house that sat for 2 years without renters and is now selling, can you tell if thats an investor like blackrock? I mean who can absorb those kinds of losses, between the mortgage, the insurance, the property taxes and maintenance, we are probably talking about 65k a year. Not many individuals have those kinds of pockets.

Thanks for sharing the info on the trucking jobs. Someone needs to do a video on what's going on with the trucking business.

Bottom line: you cannot lose your home by defaulting credit card payments. You CAN lose your home by defaulting mortgage payments…Can it be more straightforward than that??

The rent is too damn high!

Food is still high. Utilities are still high. The basic needs are still high. Housing is not going to be what you think.

The people saying things aren't happening are the same people arguing Biden is doin a great job,

Michael, thank you for your insight on the economy. I believe you're right on the money, no pun intended. I have a friend who owns Airbnbs and he said 2023 was a huge drop to their bookings. Fortunately for him his property is paid off. Inflation has made people spend less money, that's just how it goes. People will buy necessities only, they'll leave splurges for special occasions. Anyone not adjusting their lifestyle and living off of CC or Helocs will be in big trouble. Taking loans against a home is a bad idea. We've done it and still made money after selling our house BUT we could have made even more if we had not borrowed against it!

I have a HELOC and it was a half a point below prime and when rates started going to 8% but back in 2020 when the money was sloshing around I picked it up and paid that thing down to almost done

Someone admitting they’re in serious debt teaching courses on getting rich these days with real estate is Robert Kyosoki. We have to watch out for even what Dave Ramsey teaches not to get to excited but do more to getting sound advice.

You are correct, transportation sector is way down, scary

Im thankful. I thift as my shopping sprees. I live in a camper and have my bills paid no problem. Have a savings and get to travel as I work. I have never felt so free.

I'm retired and the traffic around me is so bad, I don't go out a lot. I haven't travelled across the nation on the Interstates now since 2016. But, I'd like to know from other people, if it's true about not having as many semis on the road as some of these truckers claim. I remember particularly truck traffic being horrible on I-40, I-75 and I-69 coming out of Canada, into Michigan, where I lived most of my life. Has anyone seen any decrease in truck traffic along those interstates for the last four of five years. I swear, since 2012, it seemed to me three semis per car on the road. All you did when you travelled anywhere is pass one truck after another. I would welcome a lessening of truck traffic.

Dave Ramsey needs to teach people how much debt load they can carry instead of being debt free because there is a certain amount of stuf or things a person needs now not when they can pay cash for it.

Business tip for those wanting to start a business....start a commercial window wash business...

You do your viewers squarely Michael... Tough Love advice. 👍 Self control wins... And the opposite makes us our own worst enemy. Lenders see the borrower-addicts coming every day. Vultures waiting. Middle/low income is prey.

This epidemic was definitely evident over Christmas. Just wait until the bills start rolling in 😳🤪

If people don't believe just walk around any store and see how bare the shelves are. I went into Rite Aide and the shelves were empty.

The rate cut has to be more than 2.5% less than what you have. If 7% this mean 4.5% rate is needed. 😮 👀 👀 👀.

Michael I for one appreciate your honesty and hard work to keep us informed…..it takes time for things to change….

The bottom line, is you cannot borrow equity, you must sell the property to get equity, anything else is just a secured loan with your property. It is not equity please stop saying that.

I have had HELOCs for decades, but have never used them. I keep the line of credit open just in case a worst case type of scenario happens.

I got a HELOC to buy a new house in cash. Sold the house with the HELOC and paid it off immediately. This is one way a HELOC can work but most people are not going to have enough equity to do what I did. And I knew my house with the HELOC would sell quickly. It is a risky venture unless you know you can pay it off quickly.

Hi Michael, watching your videos, I have arrived to the conclusion that many people just do not think at all. I understand people want to own a home, but it needs to be done at the right time and at the right price and interest. I do not understand desperation to own, makes people make huge mistakes, and sellers and real estate agents take advantage of it. For me its all at due time. I also was not aware that you could buy a home with less then 20% down, you mention many times 3% to 5% down, I found that ridiculous, Anything less then 20% you have all this extras to pay like Mortgage insurance etc. The your monthly payment is much higher, also some loans may have a balloon payment to compensate the 3to 5% down payment. Well this is my own opinion and based on my own experience. I do not own over 47 properties, because I am dumb, I must have done something right.

I only recommend heloc if you have a second or third property....never borrow against your first. I totally agree with Dave ramsey....paying off your home gives you security...something to fall back on..M.T, from Tampa Fl❤❤❤

AirB&B prices have gotten more stupid than motels. Car camping on travel for the win!

Michael, I notice most of the streets you walk next to don’t have curbs or storm drains. Where does all the storm water go to in these overpriced neighborhoods?

I totally agree do not follow everyone’s advice.

What most people don't know is the U.S. Department of Labor counts new part-time jobs as full-time jobs.

HELOCs aren’t a bad idea it’s the people who use it that’s the problem. But it’s easy to blame the loan instead of the person. If you have $25k in credit cards paying 26% APR is it worth it to get a HELOC that is tax deductible and interest rate is 9%? Depends on the person.

And credit cards are the same. The interest are at a variable rate. But it will be way higher than a home equity.

In a rare situation a Helco can work. 99% of the the time they don’t. We paid off a small student loan. Original rate was 7% heloc rate was 4%. We hit that hard and paid it off. I will never do it again and have been debt free for many years now.

So much good information. I feel like you bring to light the “Psy Ops” of the real estate and credit industries. Educating people of the pit falls of things that may look good on the surface. 👍🏻

I don't believe the interest on a HELOC loan is tax deductible, but the interest on a cash out refi IS tax deductible. But the best policy is to secure the roof over your head.

I was in Mexico visiting family for the holidays in a medium size city, only major retail stores accepted any type of debit or credit. I was in Mexico for ten days and saved a lot of money by simply not going out and spending money

In today's world, you can't borrow your way out of debt.

Your message is right on target Michael. Agree with everything you said.

All I can say is cognitive dissonance is real. Nobody can picture losing their job, or prices falling. I mean I dont blame them, the economy just had the longest expansion in American History. Thats going to change.