Off The Record // Ask An Expert // Real Estate ft. Kevin Kwan - Ep 4
We need three two on action guys. Welcome back to off the record when we talk about whatever we want and today segment is asked an expert and we have kevin the real estate agent. Here i've one question. I wrote it down because complicated. Okay but i always hear. The concept of people are buying. A house goes up in value. And now there's distinct called equity right. Yeah and then with equity. They're able to either buy a new home or remodel their home correct. So in essence. It's like a loan to yourself right kind of you will because it's not a free. It's not free money so how that all of that work. So in essence. What happens is when you start to build. There's a couple of ways you can build equity home. Prices go up. You can build equity from the time you purchase the property to whatever the current market rate is The other way you can build equity is you know every month that you're paying towards your mortgage payment it's bringing the principal down right so then you build equity that way as well too but what you were talking about. Can you pull money out to go. Purchase another property or remodel. Basically you would go back to the bank right because you say okay. I bought the house for a million dollars. It's now worth one point two. Can i take this extra. Two hundred thousand. And i wanted to do some improvements to it. You are actually technically probably talked to loan officer. Probably more expert on this but you are whenever you're pulling money out it's supposed to go back into the property right. You're not supposed to pull the money out and go by car right. People do that but you're not supposed to because remember. The bank is giving you money based off of the house itself so but yeah you can pull the money out and me. what would you say. Pull the money out. Is that in a form of another loan or will be in a form. Is that when you refinance you refinance. Well there's a couple of different ways with refinance refinances. Let's say you're balances you know half a million dollars you can refinance just a half a million out. Whatever the interest rate is at that time. So it's i mean typically you only refinance of it's lower which is where a lot of people are doing that to save money growing our interest rates with the low interest rates. That's what everybody's doing just the same might trust it. it's beautiful. How much did you save. Two a half percent mortgage payment wise. All my god is like a thousand via how about this house thousand within one year that you could save could go toward something else too. I started saving three thousand a month. Because i switched not to gyco. Garages popped in all of our heads. The i know that's how good advertising but we we switch. I switched from a. I had a you know a a home to myself donald renting it was like four thousand but if you add like everything else that goes with it utilities you know fucking long guy whatever right it was way over four thousand but now i live my buddy's garage for twelve hundred bucks now included. The dream is but i prefer garage. Sounds french to me.