The Mortgage Mistake That Could Cost You Everything

Summary

Earn Your Leisure Podcast Episode: The Mortgage Mistake That Could Cost You Everything
Release Date: July 26, 2026
Hosts: Rashad Bilal and Troy Millings
Network: iHeartPodcasts

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Episode Overview

This episode dives deep into real estate strategy, with a specific focus on common mortgage mistakes—especially the risks and misconceptions around “All-In-One” loans/HELOCs (Home Equity Lines of Credit). Troy and co-hosts break down who should (and shouldn’t) use these financial products, the current state of the housing market, and practical advice for listeners who aspire to build wealth through real estate.

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Key Discussion Points & Insights

1. Who Should (and Shouldn’t) Buy a Home Right Now?

• Start by Building Capital:
  Troy argues that if you have only $10,000–$15,000 to your name, homeownership is premature. Instead, focus on growing your capital through investments or by flipping the money before even thinking about a mortgage.
  “In all honesty, I don't think you should even be thinking about home ownership. You can't afford it right now.” —Troy [02:50]
• Invest Aggressively, Not Just for Safety:
  Keeping money in a savings account—even a high-yield one—won’t build substantial wealth. Calculated risk and learning the investment game are crucial for building enough capital for real estate.
  “Scared money don't make no money at the end of the day.” —Troy [03:28]

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2. Housing Market Realities: No Crash In Sight

• Supply & Demand Imbalance:
  Despite popular narratives, there’s no “inevitable” crash coming. The market remains tight due to low housing supply. Even with higher rates and increased debt, the demand keeps prices strong.
  “Everybody was telling me I was crazy, the market's gonna crash, but they just don’t understand... Right now there's not enough supply.” —Troy [04:40]
• Rates May Soften, Demand Will Surge:
  When mortgage rates eventually dip back into the 4–5% range, expect sidelined buyers to flood back in, pushing prices up further.
  “At some point these mortgage rates are going to come down and there's a lot of people...that's going to get back in the game.” —Troy [05:19]

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3. All-In-One Loan/HELOC Demystified

• What is an All-In-One Loan?
  Troy explains it's essentially a first-lien HELOC bundled with a checking account. You deposit your pay into this account, which immediately reduces your loan balance and hence the interest.
  “The all-in-one loan...is basically a first lien position HELOC. And what this does is...you open up a checking account with them and it combines like your HELOC and your checking account.” —Troy [06:08]
• Simple Interest Advantage:
  Unlike traditional 30-year loans, a HELOC charges simple interest, meaning as you pay down the principal, your interest and payment drop quickly.
• Who Should Use It:
  • High-income, surplus-cash borrowers who can consistently reduce their HELOC balance.
  • Those who aren’t living paycheck to paycheck.
  • Borrowers with low debt-to-income ratios and substantial down payments (10–20% at minimum). “If you are someone who's kind of living check to check, this is probably not going to work for you.” —Troy [08:26]
• HELOCs Are Not FHA/Conventional Substitutes:
  Minimum down payment requirements are higher and qualifying is tougher due to stricter DTI ratios.

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4. Risks and Hidden Pitfalls of HELOCs

• Debt-to-Income (DTI) Clarity:
  You typically need a DTI under 42% (versus higher limits on FHA loans) to qualify. Example given:

  “If you have $10,000 gross of monthly income and...$5,500 a month, you're at a 55% DTI...for a HELOC, you need to be at a 42% or lower.” —Troy [10:10]

• HELOC Access Can Be Revoked:
  Lenders have the right to freeze, reduce, or terminate your HELOC line at any time—particularly in declining markets or if your credit/income changes.

  “You’re going to wake up one morning and you’re going to think you have $50,000 available, and then you’ll wake up to see that your line was frozen and there’s nothing you can do about that.” —Troy [11:23]

• HELOC Interest Rates Are Higher:
  Often in the 8–11% range, compared to fixed-rate 30-year mortgages.

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Notable Quotes & Moments

• On Mistaken Beliefs About the Market:
  “Everybody was killing me in the Comments back in 2020 when I was like, yo, go out here and buy real estate. This is the best time to buy.” —Troy [04:43]
• On Financial Readiness for HELOCs:
  “If you are someone who's kind of living check to check, this is probably not going to work for you, right? This is going to work for people who have good income, high income earners, people who got strong monthly cash flow...” —Troy [08:26]
• On Institutional Power Over Borrowing:
  “If you live in a zip code that has...a declining market and you have a HELOC that's out, guess what's going to happen? You're going to wake up one morning and you're going to think you have, you know, $50,000 available, and then...your line was frozen.” —Troy [11:18]

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Timestamps for Important Segments

• [02:17-04:15] – Who shouldn’t buy a home yet, and alternatives for building wealth
• [04:36-05:56] – Why the housing market probably won’t crash
• [06:08-09:56] – All-in-one loans/HELOC demystified: structure, benefits, requirements, and who should use them
• [10:00-10:36] – What is Debt-to-Income (DTI) and why it matters for HELOCs
• [10:58-11:23] – Risks: How and why lenders can freeze or revoke your HELOC

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Summary

This episode is a must-listen for anyone considering home ownership or alternative mortgages. Troy and the team cut through the noise around housing market predictions and HELOC “hacks,” laying out exactly who these approaches help—and who they could hurt. Listeners are cautioned to recognize the risks of over-leveraging and relying on unpredictable products like first-lien HELOCs if they lack both surplus cash and strong financial discipline. The hosts advocate for building capital first, investing smartly, and deeply understanding the mechanics and dangers of any mortgage or HELOC product before executing moves that could “cost you everything.”

Transcript

[Troy]

This is an iHeart podcast.

[Podcast Host]

Guaranteed Human Earners what's Up? Look, building wealth isn't just about making money. It's about knowing where your money is working for you. That's why we partner with Empower. Empower is all about helping you invest well so you can go out and live a little. Their free Empower Personal Dashboard gives you a complete view of your financial life in one place. Track your net worth, monitor your budget, analyze your investments, set retirement goals, and more. You've worked hard for your money, now make sure it's working hard for you. Download the Empower Personal dashboard or visit empower.com not an empower client, paid or sponsored earners what's up? Look, when you think about discovering small brands, what store pops in your mind? Well, it should be Walmart. Seriously, Walmart has thousands of small brands and they're all in one place. Just go online or in store, discover and shop. It could not be easier. Every one of these brands has a real story and real people behind it. They're true American success stories, and you can find them all at Walmart. Discover thousands of small [e-mail] today. When traveling for events or festivals throughout the country, every dollar matters. We compare flights prices, hotel rates, and restaurant options. So why wouldn't we compare rides? Personally, I always check Lyft before booking a ride. Prices can change throughout the day depending on traffic, weather, and what's happening in the city. If you're headed to a concert, out to dinner, or catching up with your friends on a Friday night, taking a few seconds to check Lyft could leave you with more money to enjoy the experience. Save Money. Check Lyft.

[Sponsor Announcer]

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[Troy]

Invest right. Watch Market Mondays Every every Monday you gotta put look, guys, if you like. First of all, if you're in chat right now, how many of you guys got $10,000 right now? Type in Chad if you got $10,000 $15,000 right now, type in chat. And if that's like all your money, right? Not to you folks out here who got green jackets on. You're part of Red Panda, right? Because you guys are just killing it out here. But there's a big market of us of people out here and our followers who watch this show that got 10 to $15,000, in all honesty, I don't think you should even be thinking about home ownership. You can't afford it right now. You need to really think about how do I flip this money, how do I turn this 10 to $15,000 into 30,000, 40,000, and then how can I offset that capital gains? You do that by buying real estate and you do it smart, right? You just don't go out here and buy a single family. You gotta buy a multi family because that's gonna give you more tax benefits and more tax breaks, and that can offset that capital gains that you'll get from, you know, investing and taking from your brokerage account to put it into the real estate, right? So I just feel like there's a lot of people out there that want to buy real estate, that want to get into the game, but that that entry barrier is just too high for them. So why not? Why sit on the money? Why put it into your savings account or even a high yield savings for that matter, right? I know one safety, hey, I want to get 3%, 4%, and that's great, but you got to be a little bit more aggressive, scared. Money don't make no money at the end of the day. And like you said, Magic said last year, you got three years. We on year two now, one year is down two years, right? And it's going by fast. So we have to now accelerate that, take calculated risk and, and learn the game to, you know, kind of increase our net worth. So that way you can really go out here and buy real estate.

[Co-host or Interviewer]

Troy, I've been looking at the housing market here in Houston like the last year, and then like in the last two or three months, a couple people have asked me about all in one loan. Can you walk us through what that is? And also can you tell everyone who was hoping for a housing market crash that one is never going to come,

[Troy]

bro, I, I've been saying that for eight years, nine years, bro. Like, everybody, everybody was killing me in the Comments Back in 2020 when I was like, yo, go out here and buy real estate. This is the best time to buy. And everybody was telling me I was crazy, the market's gonna crash, but they just don't understand, you know, they don't understand the history of this. Right, right now there's not enough supply. This is why you have a new law that just came out to help increase supply because there's a housing shortage. So no matter, look, and I'm not going to take away from you know, the debt that folks have right now, consumer spending, the rise in housing, courses of insurance and property taxes. But ultimately there's not enough supply on the market right now. And at some point the feds, even if they raise them a little bit, that's okay. At some point these mortgage rates are going to come down and there's a lot of people on the waiting on the sidelines that's going to get back in the game once those rates start hitting the fives and the fours again. And we've had some trickles of fives over the past six to eight months too. So there's been opportunities to get rates in the fives. You just have to be in position to capitalize on that. Now when it comes to this all in one loan, I've been getting a lot of dms about this lately. A lot of people been on the Internet kind of talking about this. So the all in one loan I'm gonna try to make this as simple as I possibly can is basically a first lien position. Heloc. HELOC is a home equity line of credit. And what this does is there's some banks out there that's offering, you know, you open up a checking account with them and it combines like your HELOC and your checking account. So you make all your deposits to temporarily into your home equity line of credit, to reduce that line of credit balance. And then as you getting paid, you deposit into your HELOC and you using a HELOC to pay your bills. See a HELOC is not like a 30 year mortgage where it's amateurized over 30 years. A HELOC is more simple interest. So as you pay down your balance, your, your payment goes lower. So instead of having cash sitting in your check ins in your savings account, you have that cash sitting in your HELOC and you just use that HELOC to go about your daily spending, paying your bills, et cetera, et cetera. Now this can reduce total interest that's paid and can definitely shorten the life of the loan and it's definitely going to give you an increase in your cash flow and your flexibility. But this is best fit for folks who have money.

[Listener or Guest]

Explain is it a HELOC or it's

[Troy]

not a HELOC, it's a HELOC. It's a HELOC. So when people say all in one, this is just marketing.

[Listener or Guest]

So it's a HELOC, it's a Heloc. Yeah, it's another, it's another name for HELOC.

[Troy]

It's a, it's another name for HELoc. It's something that people are using as more marketing because they're saying, hey, you get a checking account that comes with it and you can use a checking account with the heloc. It's a heloc, right? Plain and simple. It's a first lane position heloc, that's all it is. And the HELOC, for those of you don't know, is home equity line of credit. Like I said, you have, in most cases you'll have a 10 year draw period. So in that 10 year draw period you can use it like a credit card, right? You can use it, pay it off, use it paid off, use it, pay it off and you have that flexibility. And then after 10 years it converts into like a 20 year principal interest mortgage. These rates are generally higher than what a 30 year mortgage is going to be. These rates can range anywhere from 8 to 10, 11% just depending on who's the lender, who's giving the HELOC and ultimately your profile, right? But this is, again, this is, this strategy has been around for decades, right? First lien position, heloc. Put all your money into the HELOC and use that HELOC to pay your bills and then you'll have surplus. So instead of it sitting in your checking account, you are paying less interest and it's essentially you can technically pay off your mortgage much faster this way. But again you have to have surplus of income to do this. If you are someone who's kind of living check to check, this is probably not going to work for you, right? This is going to work for people who have good income, high income earners, people who got strong monthly cash flow, who don't need to continue to dip into that HELOC every single month to live their life, right? Borrowers who keep larger cash balances, this is perfect for them. Now when you go out here and you purchase a home, this is not like a FHA loan guys, or a conventional where you can do 3%, 3 and a half percent, 5% at a very minimum you have to put down 10%. And some banks that offer this, you're going to have to probably put down more 15 to 20%. So first things first, you have to have that down payment to even do this. Second thing is you need to have a low debt to income ratio because again that is extremely important. And I think that's the part that people are not speaking about. You can't, you can't really go out here and get a HELOC if you got a 55 debt to income ratio.

[Co-host or Interviewer]

Tell them what debt to income ratio is for those if they knew it or don't know.

[Troy]

Debt to income ratio is exactly what it says, your debt towards your income and what that ratio is. So for example, if you have $10,000 gross of monthly income and your mortgage payment, plus all your bills that are on your credit report, like your car loan, your student loans, your credit card bills, if everything comes up to $5,500 a month, you're at a 55% DTI or DT or debt to income ratio, right? So that could probably be good for FHA borrower. But if you're talking about a HELOC, you need to be at a 42% or lower debt to income ratio. And again remember one important key that folks, when they, when I hear people speak about this and they speak about HELOCs in general, in first position, you have to understand the HELOC can be cut off at any given time by the lender. It's just like with how much notice

[Listener or Guest]

can be cut off. Like if, if I have a heloc, they could, they could just cancel it even though I already have it.

[Troy]

Absolutely. They can cut your balance. It's the same thing like a credit card, right? If they feel like your spending is not up there, they'll cut your balances. They'll say okay, you used to spend $100,000 a month, but you now spending 20. So why am I going to keep giving you a hundred thousand dollars when you're not showing that you're spending this money? So I'm gonna cut that balance. It's the same thing with the heloc. If, if you live in a declining market, if we start seeing these foreclosures continue to rise and out of impacts. And remember real estate is local guys. So. And the banks are monitoring this. There's so much technology and the banks are using all of this and it's all based off of algorithms too. So if you live in a zip code that has the, it's a declining market and you have a HELOC that's out, guess what's going to happen? You're going to wake up one morning and you're going to think you have, you know, 50,000 available, and then you'll wake up to see that your line was frozen and there's nothing you can do about that because they've reserved the right to free Jelan to protect their interests.

[Podcast Host]

Earners what's up? Look, when you think about discovering small brands, what store pops in your mind? Well, it should be Walmart. Seriously, Walmart has thousands of small brands and they're all in one place. Just go online or in store, discover and shop. It could not be easier. Every one of these brands has a real story and real people behind it. They're true American success stories. And you can find them all at Walmart. Discover thousands of small [e-mail] today. Earners what's up? Look, building wealth isn't just about making money. It's about knowing where your money is working for you. That's why we partner with Empower. Empower is all about helping you invest well so you can go out and live a little. Their free Empower Personal Dashboard gives you a complete view of your financial life in one place. Track your net worth, monitor your budget, analyze your investments, set retirement goals, and more. You've worked hard for your money, now make sure it's working hard for you. Download the Empower Personal dashboard or visit empower.com not an empower client, paid or sponsored. When traveling for events or festivals throughout the country, every dollar matters. We compare flights, prices, hotel rates and restaurant options, so why wouldn't we compare rides? Personally, I always check Lyft before booking a ride. Prices can change throughout the day, depending on traffic, weather, and what's happening in the city. If you're headed to a concert, out to dinner, or catching up with your friends on a Friday night, taking a few seconds to check Lyft could leave you with more money to enjoy the experience. Save money.

[Sponsor Announcer]

Check Lyft before you sign off. You tuned in for ways to help teams move faster, make sharper decisions, and turn scattered context into work they can use ChatGPT for business can help ChatGPT for business gives teams a shared workspace with admin controls, permissions and access to work and codecs. In ChatGPT, this means your business can move from question to answer and code to rollout quicker. Join over 10 million business and enterprise users worldwide already using ChatGPT for work. Download the ChatGPT desktop app or contact Sales to learn more.

[Troy]

This is an Iheart podcast.

[Sponsor Announcer]

Guaranteed human.