It's time for the b a q A. The b a q A. Okay, the b a qa. Do you have a question about business, entrepreneurship, career, life. Well, not so much to life because we still try to live it ourselves to out, but you know the other stuff. Me and Manjol are here for weekly Brown Ambition Question and Answer.
Yes, ma'am, all right, we have some really good questions. If y'all want to drop us a question, just go to Brandiebission podcast dot com and you can click ask us anything to submit a question. Also, hit us up on Instagram. We are at Brandibision podcast. We are checking your questions there as well. Today we have a couple of home questions, so some interesting juicy ones. Let's start with this question from Charlotte. Charlotte said Mandy in all caps.
Siftany is here too, Charlotte. Okay, so it was media and Tiffany. What are the pros and cons of a hee lock? For those who don't know, a helock stands for a home equity line of credit. Charlotte says, my home has about sixty thousand dollars of equity and I would like to tap into that to have several projects done. I was fortunate to buy a foreclosed home in twenty fifteen for only fifty thousand dollars. That doesn't need any
expensive or large projects. I've been slowly refreshing it. My home is currently valued at about one hundred and twenty five thousand by my county assessor. Okay, so that's how she's getting that equity.
Yes, first fault. Let's give you a round of applause. Charlotte, yes, card, Yes, we stand a queen, Why a smart queen. I'm going to assume that you bought the fourth closed home for the fifty thousand cash. I'm assuming just because typically foreclosure is at that amount. They're not financing. So let's just assume that she doesn't have a mortgage, which is important to understand. So home atically home equity line of credit aka he lock means like you basically hat your home,
almost like a credit card. I came in like a credit card.
Name that song Mandy, oh shit, Miley Cyrus wrecking Ball record. You never know when this song trivia is going to come. Didn't think it'd be in a helocked conversation, but I'm down.
So that just means that Charlotte had Charlotte, I was gonna do this too, this whole equery line of credit, because I was like, Okay, basically it means that Charlotte, I mean, you could do this even if you don't own your home straight out. But she can borrow the money up to a certain amount. Like let's just say she to make the math easy, let's just say, Charlotte, you know the house is worth a hundred thousand, and
she put fifty thousand in it or whatever. They don't let you take out the full amount of what all of your equity. They don't because they're like, girl, you tried it. Instead, they let you take out a percentage. Don't quote me. I think it's around no more than sixty percent, or saying something like that, but don't quote me.
Seeing up to eighty five.
Okay, perhaps yeah, on.
The bank, yes it does.
But if the benefits of Helock's because there's certainly cons but one of the benefits of Helock is that typically the interest rate is more reasonable because the bank actually has a tangible thing or tangible things to say, if Charlotte don't pay me, guess what we're gonna do. Snatch that house child? You know, So typically a helock. The interest rates are a little bit better, but some of
the cons our interest rates are up overall. Charlotte, I'm assuming that you don't have a mortgage, and so I don't know if you like me, but I'm like not having any more rtgage. But some of the benefits also too, is that you said several projects done. I'm assuming that you're wanting to fix stuff on the house, which would if you do so carefully, Charlotte and I will reach out to a real term and I would see a contra, a knowledgeable contractor that what things can you fix where
you'll get a return on that investment. So it could actually she could take the money out. Say she took out, you know, twenty thousand dollars, fixed up some bathrooms and got the return of thirty thousand dollars. So there are pros and cons that we just share with you. But Mandy, do you have some that maybe I'm missing?
Yeah, I mean you mentioned the biggest con, which is that your home is tied to it, so if you default, then they can take your whole entire house, which is unfortunately. Yeah, that's for collateral, but that's why the rates can be lower. You know, and also with a helock, So there's there's a couple, you know, without getting like two two technical. There's a home equity loan which is like a lump sum loan, and a home equity line of credit, which is kind of like Tiffany said, it's more like a
credit card. You don't have to use you.
Don't they don't give you the full amount.
You basically you know, you you make draws on that line as you need it, so you may not actually end up using all of your entire line, depending on how much work you need to have done. So it's a little bit more flexible in that way. And then you but you have to be clear on what your draw period is and then when you'd have to start making payments on that, so looking at the fine print
is important. You don't have to use your loan, although it sounds like you are for home improvements, which is smart, but you don't have to use use it for home improvements. You know, you can use home equity loans or helocks for other expenses as well, debt consolidation being another one. So it's a cool tool. It's also another piece of power for home ownership. It gives you that additional leverage.
I don't know why it.
Took me so damn long for it to click in my mind that when people said, I'm taking out another mortgage on my home, this is what they're talking about. They're talking about taking out a home equity loan, where you are essentially again taking out a loan against the value of your home. And second mortgages sound really scary, and they can be. It doesn't sound like a good idea, right, like why would I take out more debt against my home?
But if you are in a position, like Tiff said, where you can make an investment with that money that ends up benefiting you in the long run, then it can be a lot smarter than potentially for example, you know, going into your cash savings account and taking a bunch of cash out. You know, in this way you can make the improvement slowly and take advantage of low rates and keep your own cash flow like keeping your own
cash in the bank. Yeah, and keep it yeah flowing, keep it flowing and available for you.
Because I remember, Manny, this is when I got like the the the low. Also to Charlotte, if you are a sister, you run the risk of having your home under praised. I know your tax ascessor said, so remember this because remember the reason why I know all this, because I too was looking into a heloc last year. Was it last year or the year before, if y'all remember, So,
my husband and I we have two properties. One well both of them are paid off, but one was like our rental property, and we were considering pulling money out to put it into the market because the market was going up, up, up, honey. And like the house, although it was appreciating in value, meaning becoming more and more valuable, it wasn't as going up as fast as the market was.
So I was like, well, we could take out maybe one hundred thousand dollars, put into the market, you know, get back whatever the market was gonna yield, and then pay off the loan and then have some extra money from our pocket. But unfortunately, the actually it was my personal private home. The appraiser under appraised us by about like forty to fifty thousand dollars. Because black and so I can say that like definitively, because I mean they
have so many articles. I mean, actually the I think that it was a Washington Post forte an article about me. I think maybe the New York Times had interviewed me as well, but yeah, they found that it was definitely under appraise because our house was brand new, like some of the things that he wrote was like normal wear in tear, like every hinge on the door was brand new. The house we had finished renovations six months prior what we're in Taar. We hadn't even lived here really yet.
So anyway, so you run the risk of that as well. You might want to look for a a appraiser of some melanin if you are melanated, or do with My husband and I had decided that we were gonna do, which was to get our white friend Katherine, hey, Catherine to be to be me in the house, which is really terrible, but that's what we were gonna do. So just keep that in mind that that's the potential too. But you sound pretty pretty responsible. So if you brought
a foreclosure four, you've already seen this increase. Just be mindful that you know money costs, so just make the most of it.
Yeah, well, thank you for your question, Charlotte.
Thank you all right.
Another one, this one comes from listener cec all Right says, hey, Mandya.
Wait CC do you love me name? That song isn't a kiki it is?
But like, yeah, that's right, yes, Drake, Shit, what's it called?
I don't even know if it is. I don't know if you're writing it. But at least you knew, Drake.
That's good at that I could do the song from TikTok. I mean the dance from TikTok that's where you had to get out of the car while I was still moving. Right, Yes, all right, go ahead, okay, CC says Mandy, Thank you, oh sending thanks for how you've maintained the show in Tiffany's time of healing. I hope Tiffany feels all the love being sent her a way I do think I thanks CC. CC says I recently bought my first property
and moved out of my old apartment in February. I'm in the same city and have the same utility companies, but new accounts. Today, I've received a call from a collections agency saying I didn't pay the final gas bill, which was due in March. The amount is only thirty five dollars, but I don't remember getting that bill or any past you notices. It's completely possible that I lost track of it during the move. I went ahead and paid it, but now I'm worried that my credit score
will be negatively impacted. I've had a perfect payment history on all of my accounts for almost fifteen years, and now I'm worried that I've ruined it over thirty five dollars. Please tell me what I should do. Oh, CC, It's gonna be okay.
Yes, First of all, CC, let me tell you something like I one of my credit cards, I totally forgot to make a payment and I thought I had automated, but I guess I didn't, and so yo JIWD. My credit score went from and this is recently an eight oh two Mandy to a six eighty seven.
No.
I was like, the audacity, the goal is.
That like super duper late? How late are we?
Oh? I mean honestly, probably like a monthly. I didn't even know, Like I went in too.
Look, I was like, wait what because everything credit card payments too, because I'm very disorganized sometimes.
But I couldn't believe, you know, you know what it was too. That's why it was like I had made it late. And then I was like, okay, I'm gonna auto me and then the next month I forgot to automate, so I think it was too late payments in a row, so I dropped so many points, and at first my stomach sank. I mean to go from an AOO two to a six eighty seven, But then I remember, I'm not trying to buy nothing, like I have two homes already,
I have a car. I'm not borrowing any money that your credit like, that's like my eighty something your dad stressing about credit. It doesn't mean you don't want to have decent credit, because you should. Credit basically says you should know me before you need me. So certainly you want to have a strong credit score. But you said you just bought a home, so I'm assuming you're not looking to borrow money anytime soon, especially not for a property, and so even if it does drop you, you have time.
Like since then, it's been like three or four months, and of course I've made my regular payments, I've automated it, and now I'm at a instead of a six eighty seven, I'm at like a seven to ten now, and so I'm sure by the end of the year I'll be back in eight hundreds. Because girl, you are gonna hold me down. But I say all that to say trying not to stress so much. And I wonder CC did you pay? Did you call the gas company or did
you pay the credit tours directly? Because sometimes just so you know, in the future, you know, you might be able to reach out to the original company that you owe to see if if I make this payment, can they kind of like pull back reporting that you were late. So that's just something to consider too.
This exact thing happened to me. It's after college when I left. I graduated college and my roommates moved out and I stayed for an extra month that summer because I was saving up to travel and anyway, I got stuck with this this I forget which utility it was, but same situation, like I moved out and then I didn't realize it was still being charged and it was like several months, so it was it actually was a collections agency at that point, and I was like, oh shit.
But I wonder too, because it was only a month late. Sometimes sometimes businesses have or even utilities or like other agencies, municipal agencies will have internal collections teams, and they can make it seem like it's some big, bad, scary deck collectors from the street, but it could just be, you know, someone from their company who wants to scare you enough to get you to just make your payment so I would get clear on that, you know. And this happens to me with doctor's bills so.
Bad they're notorious. It's a collection a girl. It's down the hall. It is Barbara down the hall.
It's Barbara from downstairs with her thirty dollars copay and I'm like, really, Barbara, like why don't I'm like so much wasted mail, so many notices about this copey, and it is so hard to keep track of which ones you paid and didn't pay anyway, So that happens to me. It has several times with the doctors bills, and at that point, I'm like, listen, I'm gonna call the office directly, like Tiffany said, and make a payment and then they'll
get off your back. But you know, even if it did ding your credit score, just like Tiffany said, it will bounce back with other good behavior. And it's another good reminder to just if that happens, don't ignore it, just quickly call because you may have prevented it from you know, if it's not how many days delinquent. I feel like after forty five days delinquent, sixty days is
when creditors will report it, you know. But like your first cause, I I have not I've not not missed several credit card payments because, like I said, a little disorganized lately.
I'm trying to.
Get better about it, and I usually catch it really quickly, get on online chat with them and get it, you know, taken care of without having any dings to my credit score.
Yeah, and honestly too, you have to know that the biggest ding is within like the first two months. That's when it's like yikes. But then it like it loses some power because your credit score is like I want you to think about, like your financial It's an average of all of your financial choices as it relates to paying back. So it sounds like you've been an eight
plus plus plus plus plus plus plus student. So now you've gotten this one D. So that one D does not take a plus plus plus student down to a D. It just might take you down to a B, A low B, you know. And so but what happens is you continue to pay on time and in full, and you will get other a's to offset this one D and before you know it, you will be back in a's again. Like I'm already like girl, you know, they had me down and C were not we're not fit
for CCC. So now I'm in a B minus. I'll suspect in a couple of months, i'll be a solid B and I'll be back in a in fighting form not barring any money anyway. So yeah, So I mean that's for anybody who like stresses, Like if you're not actually borring money, then I wouldn't stress too much. But you do want to always, like you know, with your credit, you do want to you know, especially if you're young, that you have your credit gearing and ready to go ideally.
Yes, ma'am. All right, CC thank you so much for your question and for your beautiful and kind words. Let's take a quick break and we'll be right back with another question from a listener who has a question about her four to one.
K O no mass.
All right, y'all, we are back our third and final question of the show. First of all, it's so nice to have you back, Tiffany. This is our first B a Q and a back together. I don't got to just talk to myself for half an hour straight.
You know, I was thinking to sit back together. I was like, look at us black together, back together.
It's so nice to have someone to bounce off of. All right, This question comes from listener Stacy. Stacy says, I'm over fifty and I've made pretty decent money most of my life, but I've never saved in a four to one K from my jobs. I started a new career in October twenty twenty one, and I'm now contributing to my four to one k. What is the best bet forever being able to retire?
Stacy, First of all, congratulations with your new career twenty twenty. Okay, so stays, your best bet is going to be to max out your four oh one K. So, so I don't okay, you're starting a career, you're contributing out good. I'm glad you're contributing one. Normally, you know, man and I talk about like contributing to at least whatever your company's matching. But because you're like, you know, you're starting
a little later, that's okay. I would want you to contribute the max, which is what is the Max Mandra, what is it twenty thousand, five hundred if.
You can't thousand, five hundred dollars for twenty twenty two.
But the government knows we stay late. They're like, SIS, you stay late. So you know what they have. They have something called catch up contributions. What that means is that if you are fifty year older, which you are, SIS, they let you put an additional amount of money in because they like, we know y'all be late talking about you. Ready, you just got out shower, I'm headed your way. Meanwhile,
you haven't even earned your clothes yet. They know. So for twenty twenty two, you can put an additional sixty five hundred into your four to one k so you can catch up on some contributions. And so you can do that from now until you know, because what is your time and age now? Manty sixty four? Sixty five?
Oh lord, I don't remember six. You can start doing withdrawals at sixty two, but full retirement age, like where do you get your full Social Security benefit is sixty seven?
I believe sixty seven. So I mean it's up to you when you obviously when you want to stop working. But if you are working, you know, you can continue to do catch up contributions now until you stop working. So just like keep that in mind that like, and here's the thing, it's better that you've started than you've not started. Try not to beat your self up. The
fact that you've asked a question is great. But I would if you can lower your monthly expenses, max out your phone, okay, and max out catch up contributions if possible.
Yeah, And I mean you're exactly in the same boat that my dad is in right now, blow up my phone like on Vanguard's customer support. My goodness, Honestly, I'm about to take my dad to like Edward Jones or something and be.
Like, take this man, just do it.
No, But you know, getting an outsider's perspective to help you can also, and I would see, you know, sometimes your company itself, your for one K plan, may have experts who you can contact to get you started. So I would not turn down that kind of help. I was doing a like a talk at Synchrony. Actually if this is a big, you know, financial company, and it was all women, like hundreds of women, and the number of women who hadn't even like gone to their benefits
department and enrolled is really staggering. And then after the talk, a lot of them were going and I'm like, listen, you're the emails usually like benefits at whatever your companies name dot com and like make those people do their jobs, like help you get started and on the right path. So that's that's all I would say. And also if you were wondering, I showed my dad how to do
this too. SSA dot gov is a Social Security Administrative Administration's website and you can actually see what your expected benefit will be. So if you log on, you can see your your statement, your Social Security benefit statement, which will pretty much have your entire history of earnings and also give you an estimate of how much you can expect your benefit to be depending on what age you start collecting, so it's like sixty two, sixty five, sixty seven.
They do a whole thing, and that can give you some like realistic numbers to work with, because it sounds like you're stressed about being able to retire and like you may think that you may never be able to, but I would start there as well, so you have some real data to look at. So what actually is my expected benefit amount? And then how much would I
need to supplement that? Look at your expenses now and kind of start backing into how much additional income do I want to bring do I need to bring in, do I need to downsize? Do I need to you know, look for other ways to increase my income and start planning, you know, start planning for that all now, creative.
If you have this new career, I'm assuming maybe you have a new sale skill set. Can you monetize that skill set for a little, some little side money. I feel like everybody you know could always use a little extra money on the side, So don't be afraid to get a little, you know, side hustle on. Yeah, So you know, good luck to you, Stace.
Thank you so much for your question. You'd be surprised how many of my coaching clients are in their fifties. As a mute, I mean me, I was surprised. It's a lot of badass women out there who were like, no, I'm done with this, I want something better. So that's why I love about your question, because you said you just got a new career in October, and it's just like, yes,
it's never too late, It's not too late. Yes, there's age discrimination, which is like, we can't really control that, but you have proven that it can happen, so we're proud of you. Good luck, Stacy. All Right, we did it first, Baq and a back ish shit it.
We did it. We did it. Look seemus.
All right, y'all. Go to Brandnabission podcast dot com and ask us anything. Also check us out on ig at Brandimission Podcast. Also check your inboxes because the Brown Ambission Newsletter is happening, y'all. It's coming out every Wednesday. You'll get the latest from that week's episodes with our tip of the week. So if you're not signed up to our newsletter, go to Brownemission Podcast dot com and.
Get with the program.
Okay, and we took us seven years, but I feel like we're just getting started.
Okay, we are. We are.
All This talk about never too late, it applies to us too.
Never too late, never too late.
On trivia, I can't don't. I don't know, Tiff if it's stressful?
That was Luther too much? Too much? All right, y'all until next week, Bye bye.
Hey, ba fam. We could not do this show without your support or the support of our team behind the scenes. The Brown Ambision podcast is produced by Cumulus Podcast Network.
It's edited by the.
Wonderful Emani Crosby and produced by Tanya Bustos. Dennistimplinsky is our in house tech guru, and I am Bandy Woodrid Santos your co host, and I will see y'all next week