You’re Not Poor…You’re Getting ROBBED!

Summary

Christy Van of Fantastic Finances exposes how banks can drain life from personal finances through high-interest mortgages. She illustrates this with a couple's case, showing how a $150,000 mortgage with a 7.75% interest rate could lead to over 150% interest paid. Van advocates for financial awareness, suggesting the use of lines of credit to reduce debt and save on interest. She demonstrates how strategic payments can cut a 30-year mortgage to just 6.5 years, saving significant money and time. Her message: take control of your finances and escape the bank's grip.

Takeaways

• 🏦 Banks can drain financial resources through high-interest mortgages and lack of awareness about alternative financial tools.
• 💰 It's crucial to take control of personal finances and not just follow traditional banking practices blindly.
• 📈 The video introduces a couple living paycheck to paycheck, illustrating the financial strain caused by high-interest mortgages.
• 🏠 The couple has a mortgage with a high-interest rate of 7.75%, which significantly increases the total amount paid over the loan term.
• 🔍 The presenter emphasizes the importance of understanding the actual interest rate charged on mortgages, which can be much higher than advertised.
• 📊 A detailed amortization schedule reveals how much of each payment goes towards interest versus the principal, highlighting the inefficiency of standard mortgage payments.
• 💡 The video suggests using a line of credit to make large payments towards the mortgage principal, which can drastically reduce the total interest paid and shorten the loan term.
• 🤔 The presenter challenges viewers to consider lines of credit as a tool to accelerate debt repayment and save on interest costs.
• 📝 Viewers are encouraged to examine their mortgage documents and understand the true cost of their loans before making financial decisions.
• 🚫 The video warns against refinancing without understanding the implications, as it can reset the interest clock and lead to paying more in the long run.
• 🌟 By using a line of credit wisely, it's possible to save tens of thousands of dollars in interest and years off a mortgage, leading to financial freedom.

Q & A

What is the main issue discussed in the video?

The main issue discussed in the video is how banks can negatively impact personal finances through high-interest mortgages and the lack of awareness about alternative financial tools that can help reduce debt.

What is the couple's monthly income and expenses according to the video?

The couple in the video has a monthly income of $52,000 and expenses of $4,100, leaving them with a cash flow of $1,100 per month.

What is the purchase price and mortgage balance of the couple's home?

The couple purchased a home for $150,000, put down a payment of $15,000, and have a mortgage balance of $135,000.

What is the interest rate on the couple's mortgage?

The interest rate on the couple's mortgage is 7.75%, which is considered high in the context of the video.

How much of the couple's first mortgage payment goes towards the principal and interest?

In the first month, $995.24 of the couple's mortgage payment goes towards the principal, while $871.187 goes towards the interest.

What is the total interest the couple would pay over 30 years on their mortgage according to the video?

Over a 30-year period, the couple would pay a total of $23,170,35 in interest on their mortgage.

What is the concept of using a line of credit to pay off a mortgage faster as discussed in the video?

The concept involves using a line of credit to make a large payment towards the mortgage principal, which can significantly reduce the total interest paid and shorten the mortgage term. The line of credit is then managed by using monthly income to cover expenses and the line of credit balance.

How much interest would the couple pay on a line of credit with a 14% interest rate if they used it to pay off $10,000 of their mortgage?

The interest paid on the line of credit for a $10,000 balance at 14% would be approximately $117, assuming the balance is paid off within a month.

What is the potential time and interest savings if the couple makes $10,000 payments every 6 months using a line of credit?

By making $10,000 payments every 6 months, the couple could potentially save over $100,000 in interest and reduce their mortgage term from 30 years to 77 months (6.5 years).

What is the total interest the couple would pay using the line of credit strategy compared to the original mortgage?

Using the line of credit strategy, the couple would pay a total of $3,644 in mortgage interest and no more than $5,159 in interest on the line of credit, for a combined total of $36,800, compared to the original $23,170,35 in interest over 30 years.

What is the key takeaway from the video regarding personal finance management?

The key takeaway is the importance of understanding and utilizing financial tools such as lines of credit to take control of personal finances, reduce debt, and save on interest payments.

Outlines

00:00

💰 The Hidden Costs of Mortgages

Christy van from Fantastic Finances introduces a discussion on how banks can negatively impact personal finances through mortgages. She emphasizes the importance of financial awareness and control, using a real-life couple's situation as an example. The couple earns $52,000 per month with $4,100 in expenses, leaving a cash flow of $1,100. They have a mortgage for a $150,000 home with a $135,000 balance at a 7.75% interest rate. Christy explains that the actual interest paid over the mortgage term is significantly higher than the stated rate due to compounding effects, costing the couple over $23,000 in interest in the first year alone. She encourages viewers to review their mortgage documents and understand the true cost of their loans.

05:01

🚀 Accelerating Mortgage Payments with Lines of Credit

Christy presents a strategy to reduce the time and cost of paying off a mortgage by using a line of credit. She suggests applying a large chunk of money, such as $10,000, to the mortgage principal to reduce the balance and monthly interest payments. Using a line of credit to manage monthly income and expenses can accelerate debt repayment. Christy illustrates how this method can save tens of thousands of dollars in interest and years off the mortgage term. She explains the math behind the strategy and encourages viewers to consider lines of credit as a powerful financial tool to take control of their finances.

10:01

📈 The Power of Compound Savings on Mortgages

Christy explains the concept of making periodic large payments on a mortgage to save significant amounts of interest and time. By applying $10,000 chunks every six months, the amortization schedule can be advanced, skipping years of payments and saving over $100,000 in interest. She demonstrates that with continued payments, the mortgage can be paid off in 77 months instead of 30 years, saving over $176,000 in interest. Christy emphasizes the importance of understanding loan terms and using financial tools like lines of credit to control debt and save money.

15:03

🌟 Achieving Financial Freedom Through Smart Financing

In the final paragraph, Christy motivates viewers to take control of their financial future by understanding and utilizing lines of credit. She stresses that knowledge is power and encourages everyone to educate themselves on the true costs of mortgages and the benefits of alternative financing methods. Christy offers her support for any questions and looks forward to helping viewers achieve financial freedom in 2024. She concludes by wishing everyone a happy holiday and expressing her excitement for the potential of the upcoming year.

Keywords

💡Velocity Banking

Velocity Banking is a financial strategy that aims to optimize the use of money by reducing the time it spends in the bank and increasing the frequency of its use. In the video, it is suggested as a method to help individuals escape debt and manage their finances more effectively, rather than relying on traditional mortgages and bank loans.

💡Mortgage

A mortgage is a loan used to purchase real estate, where the property serves as collateral for the loan. In the video, the mortgage is criticized for its high-interest rates and long-term repayment plans, which can lead to paying significantly more than the original loan amount over time.

💡Interest Rate

The interest rate is the percentage of a loan that a borrower pays to a lender for the privilege of borrowing money. The video emphasizes the deceptive nature of interest rates, explaining that the actual interest paid can be much higher than the stated rate due to compounding effects over the life of the loan.

💡Amortization Schedule

An amortization schedule is a payment plan that outlines how much of each payment goes towards the principal and interest over the life of a loan. The video uses the amortization schedule to illustrate how traditional mortgages can extend the repayment period and increase the total interest paid.

💡Cash Flow

Cash flow refers to the net amount of cash moving in and out of a business or individual's finances. In the video, the concept of cash flow is used to demonstrate the couple's monthly income and expenses, emphasizing the importance of managing cash flow to avoid financial strain.

💡Debt

Debt is money owed by one party to another. The video discusses the burden of debt, particularly in the context of mortgages, and how it can negatively impact an individual's financial health and freedom.

💡Line of Credit

A line of credit is a flexible loan that allows the borrower to draw funds up to a predetermined limit. The video suggests using a line of credit as a tool to pay down debt faster and more efficiently than traditional mortgages, by leveraging the difference in interest rates and payment structures.

💡Refinancing

Refinancing is the process of replacing an existing loan with a new loan, typically with a lower interest rate or more favorable terms. The video warns against refinancing without understanding the implications, as it can reset the interest clock and lead to paying more interest over time.

💡Financial Freedom

Financial freedom refers to the state of having control over one's financial life, free from debt and the stress of living paycheck to paycheck. The video's theme revolves around achieving financial freedom by managing debt and leveraging financial tools like lines of credit.

💡Control

Control, in the context of the video, refers to the power to manage one's financial situation effectively. The video encourages viewers to take control of their finances by understanding the mechanisms of banking and debt, rather than passively accepting traditional financial products.

💡Infinite Banking

Infinite Banking is a concept mentioned in the video that refers to a strategy of using personal savings and lines of credit to finance purchases and investments, rather than relying on traditional bank loans. This approach aims to keep money within the individual's financial ecosystem, reducing reliance on external debt.

Highlights

Christy van from Fantastic Finances discusses how banks can negatively impact personal finances.

The importance of taking control of personal finances to avoid financial pitfalls.

A real-life scenario of a couple struggling with debt and the lack of awareness about banking tools.

The couple's financial situation with a monthly income of $52,000 and expenses of $4,100.

The couple's mortgage details: a 30-year mortgage at 7.75% interest on a $150,000 home.

The revelation that the actual interest rate paid can be significantly higher than the stated rate.

The couple's first mortgage payment breakdown, showing a large portion going towards interest rather than principal.

A demonstration of how making additional payments can drastically reduce the time and interest paid on a mortgage.

The introduction of using a line of credit to pay off mortgage principal more quickly.

A detailed explanation of how a line of credit works and its potential for reducing debt.

The potential savings from using a line of credit instead of a mortgage, illustrated with calculations.

The strategy of making $10,000 payments every six months to accelerate mortgage payoff.

The significant interest savings and time reduction achieved by this payment strategy.

The total savings in interest and time by using a line of credit compared to a traditional mortgage.

Christy's encouragement for viewers to take control of their finances and escape the debt cycle.

A call to action for viewers to educate themselves on banking documents and the true cost of loans.

Christy's personal testimony and her mission to help others achieve financial freedom.

The invitation for viewers to ask questions and engage with the channel for further financial guidance.

Transcripts

hello and welcome back to my channel I

am Christy van with fantastic finances

and on this channel I teach velocity

banking today we are going to be

discussing how the banks are sucking the

life out of your finances and how you

can stop it you have a choice after you

see this video today you have a choice

you are choosing to throw your money out

the window if you continue doing what

I'm about to speak on in this video it's

your choice we need to wake up and we

need to take control of our money when

we are sitting back letting stuff like

this happen it's our fault if you are

broke if you are living paycheck to

paycheck maybe it's because you are in

this situation right here this is a real

life scenario I worked with a couple

today that is in this exact scenario I

want to share it with you because I want

you to see how angering it is that you

are not aware of the different tool

tools that's available at the bank to

help you come out of debt you instead

have been trained to make payments you

have been trained to believe mortgages

are your way to buying your home I want

to show you a different way I hope that

you have ears to hear and that you will

pay attention to how much money this

couple is throwing out the window if

they allow this to happen to them they

currently have an income of 52 $0000 a

month they have $4,100 in expenses

coming out every month this includes

their home this includes their food

their gas all their living expenses so

after all of their expenses come out

they are left with a cash flow of $1,100

per month now let's go over here they

have purchased a home the purchase price

was

$150,000 they put down

$155,000 which left them a balance of

$135,000 then of of course they got a

mortgage because that's what they tell

us to do you want a home get a mortgage

you can buy your home you can have

little bitty baby payments for 30

years let's see where that's going to

get them so they started their payments

this month December 1st 2023 so the

mortgage is a 30-year mortgage at

7.75% guys if you're in these ridiculous

interest rates I don't care if it was

going on in the 80s or not it's going on

right now if you didn't have the

knowledge in the 1980s and you went

ahead and you paid this ridiculous

interest then I'm sorry it was only

because you weren't taught the truth

this video is going to teach you the

truth about what that 7.75 interest rate

means to you I want everybody that has a

mortgage to go get your contract

documents right

now I

wait go to the closing document

section look in your closing document

section of the

contract you're going to see where it

says your interest rate I don't care if

it's 2% or

8% then look in the small print below

your interest rate it's going to say in

capital letters this is not your

interest

rate now go down to the next line you're

going to see another line that says this

is your actual interest rate and if

you're at 3% it's going to be

approximately 60% this

7.75% that's not

7.75% take that times 2 and then add a

zero they're going to be paying over

150% in interest on this mortgage look

at your mortgage papers and see if I'm

telling the truth this couple is going

to have a monthly payment of

$967 2016 in month one they're going to

pay

$871 187 in interest alone Lo how much

actually goes towards the house they

just bought

$99524 are you seeing where I'm going

with this month

two balance

13495 monthly payment

9676 interest

$871

26 principal payment what actually went

to the house that they're paying for $95

90 how long do you think it's going to

take them to pay this home off paying

these small little payments towards

their actual principal amount 30 years

right so I have Carl's mortgage

calculator up and you're going to see it

here this is going to show you that the

actual interest that they're going to

pay throughout this 30 years on this

mortgage is going to be

$23,170

35 interest only let's teach you a way

that you can beat that and be excited to

pay for your home not paying for the

bank's home first when you're paying

this much interest in every single

payment that you're making you might as

well drive down the street roll your

window down and throw

$871 out the window going down the

street you know what at least it will

help some people on the street that need

the money this is going to the banks

this is just you making them richer

how can you stop that what if you took a

$10,000 chunk and put upon this mortgage

and I know some of you naysayers out

there are saying well who's got

$10,000 well guess what there are things

called lines of credit at the bank and

you can use the lines of credit any way

you want to most banks have them

available most Credit Unions have them

available check it out see if you can't

find you a line of credit to do what you

are getting ready to see here this is

not magic this is is just math so we

talked about getting a $110,000 chunk

and paying it onto this mortgage

principal we also discussed that they

have $100 in cash flow every month so

when they get the $110,000 line of

credit you can use that to put all of

your income in and pull all of your

expenses out so this is how that will

look you have a balance of $10,000 on

the line of credit that you got from the

bank or credit union your income goes in

when the income goes into this line of

credit it satisfies any payment that was

due that month you can also pay your

expenses straight out of this account so

when the income goes in in month one the

expenses come out the balance comes down

to

$8,900 now remember the expenses are the

home and all of the Liv expenses the

food the Gas Utilities whatever it is

that they have to pay every single month

can come out of this line of credit now

we have to figure in some interest here

so I figured this line of credit at a

high of4

14% remember what this was

7.75% this is 14% how in the world is

this a better deal than just making

those mortgage payments so I figured the

14% interest on the $10,000 is that the

way the bank charges no absolutely not

they charge interest based on the

average daily balance so when this

balance came down to 4,800 after putting

in the income that was a low this is the

high it would be averaged at the bank

before they figured in the interest rate

of

14% I went ahead and figured the

interest rate off of the high $10,000

just to leave room for air and just to

show that it doesn't matter what your

interest rate is on a line of credit you

can still beat whatever loan that you're

paying over here so the interest at 14%

on the $10,000 comes to approximately

$117 that brings their balance back up

to 9,17

month two the income goes in the

expenses come out again and so does the

interest and the interest at 14% was

charged off of the balance of

$917 month three the income goes in the

expenses come out so does the interest

now we're back up to

7,17 month four the income goes in the

expenses and the interest come back out

month 5 same thing look at here it's

month six it's paid off it's gone it's

over you have paid off the $110,000 that

you put on this home so in 6 months

doing nothing at all just putting your

income in pulling your expenses out

leaving this cash flow sitting in there

you're going to pay off the $10,000

within 6

months so what happens if we decide to

put $10,000 on this principal amount

every s months so if we have the

$135,000 balance and they put $10,000

from the line of credit on here that of

course is going to bring their balance

to

$125,000 if you know anything about an

amortization schedule and I'm showing

you one now that is what every loan is

set up on an amortization schedule so

every month you have a set monthly

payment right this schedule will show

you how much of your payment is going

towards interest and how much is going

towards principal which is what I showed

you right here so according to the Amer

schedule a $10,000 Chunk on this

$135,000 mortgage brings it down to

$125,000 but it skips from December 2023

all the way to July of

2030 yeah you heard me right

2030 that means that because they were

allowed to skip almost seven years on

the amortization schedule they are going

to save6 $6

5,520 in interest for a one-time $10,000

chunk that they are going to pay off in

six months so let's see what a $10,000

chunk every s months is going to do to

this mortgage and to the interest that

they're going to pay throughout the time

they spend paying off the mortgage if we

go ahead and do a second chunk it skips

the schedule to April of

2035 over 5 more years saving

37,6 181 more dollars in interest two

chunks 7 months apart $10,000 each

they've saved over

$100,000 in interest alone so what does

that mean if they make nine more $10,000

chunks onto this mortgage this mortgage

is going to be paid in full in 77 months

or 6 and A2 years so remember what I

said at the beginning of the video the

total mortgage interest that they were

going to pay in this 30-year mortgage

was

$23,170

35 remember the total interest that

they're going to pay doing these chunks

in every seven months is going to be

$3,644 of mortgage interest because

remember in between each 10 $1,000 chunk

they're still making the mortgage

payment how much interest are they going

to pay using this $10,000 line of credit

every 6 months how much are they going

to pay well they're not going to pay any

more than $

5,159 in interest on this line of credit

throughout the 77 months that they have

this mortgage so that means that they

are going to pay a total on the mortgage

and the line of credit of

$36,800

how much were they going to pay on the

30-year mortgage

$23,170

35 so what does that mean that they

saved

$176,300

35 they have saved in interest

alone people that's an interest alone

not only that they have saved 23 and A2

years 23 and A2 years on their

mortgage they're done 77 months it's

over is that insane I mean I even do

these scenarios and I think to myself oh

wow I must have done something wrong

because those figures just aren't right

no no it's right this is the difference

of allowing a mortgage to absorb your

hard earned money and moving into a line

of credit that you can control because

you're putting your income in pulling

your expenses out letting your cash flow

work this down every month saving tens

of thousands of dollars in interest this

is simple math you have to run the

numbers yourself I don't care if you're

two years into your mortgage you can

still save a killing and get out of that

mortgage fast by using a line of credit

there are personal lines of credit there

are home equity lines of credit there

are lines of credit that can take over

your whole mortgage called a first lean

HELOC you have options you just didn't

realize you did and for goodness sake

know what you're getting into before you

refinance that house it is exactly what

you saw here they are just resetting all

of that interest for you to pay it

again please think before you

refinance please ask me questions I'll

be glad to help you but for goodness

sake save your wealth put this

$871 into an account for yourself put

this

$65,000 back into your infinite banking

policy back into your own Bank to where

you can serve yourself and you'll never

have to go to another bank to get a loan

like this I want you to hear what I'm

saying this is something you can control

and the bank gives you the tools to

control it it's just that you have been

programmed to receive

loans there are lines of credit that are

simple interest loans are advertise

schedules with the interest front loaded

meaning you're going to pay most of the

interest within seven years why are you

going to pay it within seven years

because they know statistically every

American Family moves out of their home

within seven years or they refinance

within the first four years you are

programmed to do exactly what you're

doing buying your home with a mortgage

we all grew up in this now we have the

information we need to change our minds

and to get back into control of our

finances that is all I want for you guys

I want everybody out there to understand

you can control what's happening to your

finances you just weren't aware before

you are aware now pick the ball up and

run to your side of the court and score

when you get into a line of credit and

start working off this debt

quickly this went from 30 years to 77

months that's 6 and a half years there

is nobody watching this video right now

that wouldn't run and jump on that deal

if you thought you could get out of this

$967 a month payment in 77 months there

is no one watching this video that

wouldn't jump and do it you have the

option to do it I'm not selling you

anything I don't want to counsel you I'm

not a counselor I'm not even a financial

advisor I'm not a tax attorney I am

nothing but someone who has been there

and done that and I'm trying to share it

with you you too can make a difference

in your finances you can get control you

just wonder where you could I'm here to

show you how this is a prime example of

what the banks are doing to you today if

you have a 2% mortgage you are paying

40% look at your paperwork they're not

going to point it out and show it to you

but they have to disclose what it is

they're actually charging now on these

mortgages and it's in your closing

documents go look at it yourself and

take control the ball is in your court

you know now and I am tickled to get to

tell you about it I just hope that you

know 2024 can be your best financial

year yet when you learn how to use lines

of credit and get out of these loans

let's get out of debt let's make a

declaration I am poor no more in 20 24 I

am so excited to say that and I know you

are too it was my pleasure to bring this

to you today if you have any questions

or comments please leave them below I'll

be glad to answer them you have seen the

math you know the truth and now you have

the power to go get what you need to get

out of these amorti schedules and get

into simple interest and get that debt

gone we're done with living paycheck to

paycheck I want to be free and I want to

see you financially free and in peace

thank you so much for joining me today I

hope you guys have a wonderful Christmas

holiday and I look forward to seeing you

in the next

video