This episode was created using a new kind of podcast editing software called Descript. It both records audio and creates a reasonable accurate transcript. Today's short episode features our first unedited transcript of a call about using home equity to invest.
Don: [00:00:00] Hello again. I'm Don welcome to another daily edition of the talking real money podcast. We are trying something new today. I am actually recording today's podcast in a new kind of software. That is kind of cool. I still have to try and see how it works, but it allows. A lot of new things technically behind the scenes.
[00:00:28] He really doesn't mean a lot to you. But what it does mean to you if this works properly. is a transcript of the podcast so. Dots not. see and that's going to be a problem is when I do that my stream-of-consciousness thing. It's going to confuse the transcription, but it won't be perfect by any stretch of the imagination but it's worth a try.
[00:00:53] So that's what we're going to do today couple of program notes real quickly Saturday the 5th. We are going to be [00:01:00] doing a live show in the Seattle area from 3 p.m. To 5:30 p.m. Eastern time you. Can call live at eight five five nine three five talk eight five five nine three five eight two five five.
[00:01:16] And we will take your calls there. But you can also call anytime date five five nine three five talk eight five five nine three five eight two five five and let your questions on future podcasts. So is pretty easy. Oh and and then we're going to be live again. The next week two in a row during football season.
[00:01:41] I know it's hard to believe but you going to be able to call us a lot and get your questions answered and it's really easy. So give me a call eight five five nine three five talk and let's do this. I've got a call. Let's go take it right now.
Ben: [00:01:58] Hello, my name is Ben. [00:02:00] My wife I are almost 40 years old and I'm wondering you guys thoughts on doing a Cash out refinance my house have about a hundred and thirty left to pay. It's worth about 380,000 currently on a 15 year mortgage at 3.2. But I also have a HELOC at that about 6%. So those combined is about three and a half percent and that's what I would get a new 30 year loan for will be three and a half percent wondering if make sense to cash out the the difference and invest that for long term.
Don: [00:02:37] I've been a very interesting question. There are two schools of thought and I'm of both schools. school of thought number one you. May feel more secure or your wife may feel more secure having a house that's paid for or [00:03:00] paid down. That's the. Security school of thought the fiscal school of thought is you got a lot of money tied up in a house if you take some of that money out and you take it out at a at a lower interest rate.
[00:03:17] I mean, you're going to refinance those two notes . As long as you beat that three-point, whatever rate on your Investments, which if you're willing to take a little risk over a long period of time and you're young you are very likely to do but there are no guarantees.
[00:03:33] It may not work out. You can't know for sure. but I believe. I really do believe that it's worth a shot. I believe that in the long run. You'll probably be better off and most people at your age don't stay in the same house forever. Since I was 40, I've been in three [00:04:00] just before 40 I've been in three different houses now with the new one. So you may move down the road and you probably will want you get into retirement, you know, because raising kids is a different kind of house for a lot of us. So I think financially it's a sound decision to. Take some of the money out have a decent amount of equity at least 20 to 30 percent in the house to cover you in case the market turns down, but I think it's good move and I appreciate the call and this is going to be a short version of the podcast today.
[00:04:29] We'll have lots of stuff for you next week though. And remember you can call anytime at eight five five nine three five talk and please visit us at talking real money.com where you can learn a lot of good stuff. And you can also send in your questions there through our contact form.
[00:04:44] Also one more thing:
[00:04:45] I sent out Real Investing Journal today. So if you subscribe to the online Real Investing Journal, you should have an email or you can just go to real investing journal.com to leak to lead that's going to get transcribed wrong to read the [00:05:00] latest stories. All right. I may just edit that out. I don't know if you don't hear lead instead of read then I edited it out.
[00:05:08]Did you need to know all that? I don't know. Thanks so much for listening. Please tell a friend or two or ten or a hundred. The more the merrier and we appreciate you being there taking care. I'm Don McDonald.