Banks Hate This HELOC Hack? Smoke or Receipts

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1. 0:00Announcer

   This is an A.I. generated sample. Every voice you'll hear is synthetic.

2. 0:15Announcer

   From Clickflame. This is Smoke and Receipts. The hype goes up in smoke. We bring the receipts.

3. 0:24Host

   Alright, alright, we're back. Marcus. You look like a guy who brought receipts.

4. 0:32Marcus

   I always bring receipts. I got a whole folder today.

5. 0:36Host

   Okay, for the new people, here's how this works. Somebody online makes a big promise. We run the actual numbers. Then we call it. Smoke,

6. 0:45Marcus

   Or receipts.

7. 0:48Host

   Today's hype. Banks hate this HELOC hack. Pay off your house in six years. Hundreds of thousands of views on this stuff, Marcus.

8. 0:56Marcus

   Hundreds of thousands. And look, part of it is true, so let's be fair.

9. 1:00Host

   Be fair. Start with the true part.

10. 1:03Marcus

    Okay. Say you owe four hundred thousand dollars on a thirty year mortgage at six and a half percent. Your payment is about twenty five hundred and twenty eight bucks a month. In the first month, about twenty one hundred and sixty seven of that is interest. Only about three hundred and sixty dollars comes off what you owe.

11. 1:17Host

    Wait, wait, wait. Three sixty? Out of twenty five hundred?

12. 1:22Marcus

    Three sixty. Welcome to month one of a mortgage.

13. 1:28Marcus

    And if you ride it out thirty years, you pay about five hundred and ten thousand dollars in interest. More than the loan itself.

14. 1:33Host

    That's brutal. Okay. So the pain is real. Now sell me the hack.

15. 1:38Marcus

    The hack goes like this. Open a home equity line of credit. Pull out a chunk, say thirty grand, and slap it on the mortgage. Then your whole paycheck goes into the line of credit to pay it back down. Repeat until the house is gone.

16. 1:49Host

    And boom. Six years.

17. 1:52Marcus

    Here's what's not in the thumbnail. The examples assume about four thousand dollars a month left over after bills. So I took that same four grand, and sent it straight to the mortgage. No HELOC. Nothing fancy.

18. 2:04Host

    And?

19. 2:07Marcus

    Paid off in about six years and three months.

20. 2:09Host

    Get outta here. Without the HELOC?

21. 2:12Marcus

    Without the HELOC! Then I ran the HELOC version at eight and a half percent. About three months slower, and roughly twenty seven hundred dollars more in interest. Because the line of credit charges its own interest, often at a higher rate than your mortgage.

22. 2:24Host

    So the hack isn't the HELOC. The hack is the four grand.

23. 2:29Marcus

    The hack is the four grand. The HELOC is just the costume.

24. 2:34Host

    The costume! I'm stealing that. Okay, okay. Real talk. What about the guy who doesn't have four grand a month extra?

25. 2:44Marcus

    Start smaller. Five hundred extra a month on that same loan takes it from thirty years to about nineteen and a half, and saves around two hundred thousand dollars in interest. A thousand a month gets you under fifteen years, and saves almost three hundred thousand. Just make sure your lender puts it on principal. And build your emergency fund first.

26. 3:02Host

    Two hundred grand. For five hundred bucks a month. Man. I wish somebody told me that at thirty.

27. 3:09Marcus

    Didn't we all.

28. 3:13Host

    Alright. Verdict time.

29. 3:16Host

    Banks hate this HELOC hack. Pay off your house in six years. Marcus. Smoke, or receipts?

30. 3:25Marcus

    Smoke.

31. 3:28Host

    Smoke. The six years is real. The HELOC didn't do it. The four grand did. The bank doesn't hate the HELOC. The bank hates the person who spends less than they make, and sends the difference straight at the principal. That's the receipt.

32. 3:42Announcer

    That was Smoke and Receipts. Fully A.I. generated. The numbers are example math, not financial advice. Got a hype you want us to burn? Send it in.