$54K HELOC Case Study

Okay, we're back.

Today I want to talk about, a case study, for a couple that has a $54,000 HELOC, they have monthly income of 8,000, expenses of 5,000, leaving them a cash flow amount of $3,000.

their HELOC, is 9.5%.

And what they are wanting to do is they're wanting to put a cap, couple of porches, on their house and then also add a carport.

So I want to show you how to do that.

So, with this 54,000, let's say each porch costs 17,000.

So the first thing we do is we will chunk 17,820.

at 9.5% they're paying $141 in interest.

They apply their, their monthly income, and then pull out their expenses and they're left with 2859 to pay down to debt.

month two, they're down to 14,961 interest on that's 118 for the month.

And so they're going to apply 2882 to the debt.

So if you'll look down here at month, seven, they have already paid, you know, $20,000 down in debt.

so what we're going to do is we're going to chunk another 17,500 and we'll call this for the, for porch number two.

So we just keep going, we keep walking down, we keep rinsing and repeating, you know, the same thing every time.

So the first month, $17,500, they're down to $14,826.

income goes in, expenses go out.

they pay $117 in interest on that 14,000, they have $2,883 to pay down.

so they just keep going.

Now along the way, let's assume, even up here that they had a washer go out and they, they had that expense.

And let's just say, I know this is not, this doesn't match the month on the left side, but let's just say Christmas comes, and then they had another car repair.

During that.

So if you'll look down here at month 15, even having said all of that, they've, they're, they're back down to zero.

So let's chunk, they've paid now two porches off, so now they want to include a carport on that.

Let's just say it's 20 grand.

Okay, so they just keep going.

Income goes in expenses goes out, your interest is paid based on the balance of the debt amount.

along the line here, you know, another $3,000 expense comes up, thousand dollar expense comes up, and they just keep rolling.

So if you'll notice what's happened here we are at month, basically we're at the two year mark and they have paid down, you know, $70,000 in debt.

They've actually paid $60,000 in the actual chunk amount for the porches, for the carport, etc.

Etc.

the 70 includes the miscellaneous here, that for Christmas and washer and dryer, car trouble, things that come up.

Well now they're ready to pay for their car.

So let's just say $25,000 they paid down, that's now they're going to pay their car off.

so if you'll look down Here at month 32, which is 2.67 years, they've paid a total of $93,000 in debt.

They've paid $83,000 for their porches, their car, and the carport.

So anyway, just wanted to let you know how this works.

If you have any questions, give me a call, send me a note.

again, I want to note that they didn't get another job, they didn't get a bonus, they didn't get a raise.

they're just letting the money work for them.

So anyway, have a good day, talk to you later.