HELOC to Pay Off Mortgage

[@TheKwakBrothers]

Download the FREE HELOC Calculator & the eBook here: debtfreeaccelerator.com

[@198746779838]

Hey quick question. When using your calculator, i have been putting in different amounts of the heloc. Eg: i tried 20k then 50k then 100k with no change. Does this mean the amount you are asking for deosnt really matter for your strategy?

[@matthewholliman1399]

This might be the most complicated video on how to pay more interest on whatever you decide to borrow from your equity.

[@julianjackson456]

I guess im asking the wrong place but does anyone know a method to log back into an Instagram account..? I somehow lost the account password. I love any tricks you can offer me

[@myhouse-yourhouse]

@@198746779838I found the same; regardless LOC amount; the results are similar; I use 10k LOC; it resulted I save 328k and only pay $24k for 30 years of loan of 232k. Banks are filing bankruptcy lol

[@PlanwithJohn]

Not to mention using a 0% credit card and maximizing out the interest savings over 12-15mo!

[@marybusseau6016]

In response to all of the negative comments, if someone doesn't understand something they should not do it. If they do understand the math and the benefit then go for it. What he is talking about takes a financially stable individual with a lot of discipline. For example, I use my credit card for all expenses, pay it off in full before the due date, and reap the rewards of the 2% cash back. That takes discipline and a steady income and is not for everyone.

[@mr.chalupacabra3587]

They haven’t addressed the fact that almost every HELOC has a call. All the discipline in the world can’t overcome the fact that the bank can “call” for the entire balance every 12-24 months.

[@samgray2680]

I'm still yet to see a finance bro pushing this "strategy" actually show how and that you would pay less interest than if you just put your excess $ against the mortgage in the first place.

[@Adrian-ok5gt]

Losing money same way this doesn’t make sense sorry

[@MacLaw3084]

@@mr.chalupacabra3587 well maybe don’t use this strategy if you can’t afford to repay the debt in the odd case that it gets recalled.

[@robertweekley5926]

@@mr.chalupacabra3587 - While there are numerous factors any particular individual can't control, there are also numerous ones they can control, but fail to do so, on many levels. Ignorance, Laziness, Apathy, are all such things, that most of us fail to work on! This video, if watched, only touches, for a very small part, on the Ignorance aspect of our financial Knowledge! If a person "Spends" without Any Tracking, or Reviewing Process, that will tally their actions, and organize them, prioritize them, etc, that is a failure in the Apathy aspect! Failure to be a Fanatic at the Tracking aspect, is evidence of the Laziness aspect! It's tough to break bad money habits, but not impossible!

[@ugahenne]

I did the math - yes it generally checks out, but there is a much much simpler way to do this if you have the extra positive cash flow. Just dump all your extra cash flow into the mortgage principle every month. Get similar results for the same reason (paying principle down EARLY in the amortization curve = biggest saving in interest and time). But with WAY less risk and WAY less need to follow a complex scheme. Just extra payments. Also avoids all possible risks of a HELOC like the bank closing it, the adjustable rate, and any other hardships. If you are in dire straits and any point, just stop the extra payment, ask for forebearance, etc. So not saying it's a scam or bad or anything - but extra payments is the way to go for folks that want to keep it simple.

[@ukjw2]

This is what I’m saying. Isn’t the majority of the savings just coming from extra payments? With very little of it coming from the structure and compound vs simple interest?

[@ugahenne]

@@ukjw2 There is a theoretical edge possible if you "use your HELOC as a bank account" b/c they suggest that you time the credit card pay off date and your paycheck date(s) so that you maximize the time your payments are sitting on a credit card (at no interest during the billing period) and then you pay the credit card off near your paycheck date. It's complicated, and I don't even wanna do the math around it to see how much that actually saves over time, but it's peanuts compared to extra principle payments on your normal mortgage is my gut feel.

[@lesliecummings2598]

@@ugahenne But the idea is that this is for people who don't have the extra $. This is a way to pay off your home mortgage more quickly without extra payments.

[@ugahenne]

@@lesliecummings2598 Not happening - at the end of the day, any way you twist and turn it, you gotta pay EXTRA towards the principle. There is no magic bullet here.

[@TheRealToastman]

I agree, just use the KISS rule. Pay down the principal of the mortgage so it reduces the amount of interest incur. In my mind the HELOC strategy only works if 1) the rate of the HELOC is less than the interest rate on the mortgage and 2) if you have a rental property you would use the HELOC for the monthly payment. This way you get an income deduction on interest when you file your taxes.

[@SheilaYilmas]

Presently, mortgage rates have reached their highest point since the year 2000, spanning a period of 23 years. Considering inflation trends, there's a possibility that this figure might continue to escalate. To provide context, the 30-year fixed rate was only at 5% around this same time last year. Faced with this scenario, the question arises: should I continue waiting in anticipation of a potential housing market downturn before making a purchase, or is it more prudent to shift my attention towards the equity market?

[@ScottRich9]

Similar to any other investment avenue, the stock market requires a substantial level of expertise to sustain profitability. While my approach has predominantly involved buying and holding stocks, my portfolio has been in a state of decline for a considerable period. Achieving substantial gains necessitates consistency and the periodic restructuring of your portfolio to adapt to market dynamics.

[@HakimZakzi]

The scenario is strikingly alike in cities worldwide-whether it's Shanghai, Hong Kong, Mumbai, Bangalore, NYC, London, or Toronto. Rent is soaring to unprecedented levels, while wages and salaries remain stagnant. It gives the impression that certain property owners are retaliating against tenants due to their hardships during the pandemic.

[@MarioRo1]

I fully recognize the significant advantages of collaborating with a pro, but thus far, I haven't identified the right one for myself. Could you provide more details about the fiscal guide who has been guiding you?

[@jonathanthainguyen]

Always buy now. You can always refinance later if situations change.

[@Leyenda1]

Yes, but you have to start over.​@@jonathanthainguyen

[@marklandgray3841]

Keep in mind lenders can freeze a HELOC anytime (hello 2007-2010) ....a lot of lenders backed waaaaay off on HELOC business with covid as well and only a few brought them back with restricted terms as well.. in theory this is ok advice and it DOES save you money if managed pristinely.

[@TyWerks]

that's what I was thinking and you have to make a very good income as well. Really not for the average American

[@krisspinden]

One large risk seems to be that a lender can freeze a HELOC if the they deem the LTV is not in their favor. So, you can no longer use this process, and perhaps any savings you were hoping to use on other things such as a car or college for kids also gets locked in. I wonder if you could address this issue.

[@MrJimmy3459]

This is a great way to complicate your financial life which people tend to love to do.............

[@dennyinirio1786]

HELOCS, when used properly is an AWESOME tool!

[@julianawatkins4489]

I just ran the numbers for myself and calculated this would save me $8/mo in interest. I want my 16 minutes back.

[@marshallwise2039]

Shows u r an idiot. Work with professionals dude.

[@julianawatkins4489]

You sound very professional yourself. Show me the numbers.

[@aaronjennings8385]

I'm in the same camp. It makes better sense to be a very disciplined payer and pat extra against the principle. The HELOC isn't enormously cost effective, if at all.

[@xraypluto5262]

I bought my house for 121k. A year later houses fixed up in my neighborhood same square feet, bedrooms, and bathrooms are going for 250k-275k. I’m def about to get a Heloc to fix it up.

[@SteelC6]

Think and run the numbers first. Me personally, I would never get a HELOC to fix up my home. I would only use it for an asset not a liability.

[@mommaoinnh2674]

My HELOC went from 2.5% to 8.5%. Service credit union. Using a bunch of 0% credit cards for 18 months so I have time to get a renter and get some paid down!

[@jordanpreston9147]

This is a great strategy! I use it on all my properties. Only thing to be careful on is knowing your current mortgage details inside and out. One of my mortgages only allows a 15% principle pay down each year. If you pay down more then 15% you would be breaking the contract and pay penalties. Play within the rules and this strategy is fantastic!

[@wfgdaniel]

Good information

[@Beam729]

Great information. That pay down penalty is extremely important to know.

[@MyLady22]

That’s BS!

[@vymadkvymadk2039]

He is just all over the place. There are much better explanations out there by others

[@mlambert1974]

If this has been asked before, I apologize for repeating this question...If you positive monthly cash flow is let's say $2,000, why not apply that money each month to pay down your mortgage principle? Why use a HELOC with high (10+%) interest rate?

[@raiden031]

The only reason anyone has ever given that has any validity is they say you can use the HELOC to cover an emergency. That also means they have zero cash savings and are expecting the HELOC loan will never be called. It's still stupid to do it.

[@chantejones7878]

Because you can knock down bigger chunks with your HELOC

[@boyfromthemountains]

Much more than I ever learned in my school life.

[@yaroslavkrymov9955]

Same here. Went for a business degree and got less value than watching a few KZbin videos.

[@thenecessitarian]

Seems like it should work....however, it seems to me that there's a catch in that your mortgage payment isn't charged based on your mortgage balance, it's based on the money you borrowed. That is to say if you borrowed 100k at the start of your mortgage and your balance today is 5k dollars then you're still paying the full amount on the bill for 100k until you pay off the balance in full. So if you use a heloc to pay down a mortgage balance you're going to get charged two payments instead of one..... So, unless you completely reshuffle your debt by paying off the entire mortgage balance in one swoop using the heloc, then your monthly payments may increase quite significantly depending on how much money you borrowed against the equity and what the interest rate for that heloc account is. Correct me if I'm wrong though.

[@raiden031]

The minimum monthly payment is fixed based on the starting balance, Interest rate, and term. But paying down will lower the balance and change the ratio of principle to interest for all future payments, saving you money. But using a HELOC is not a useful way to accomplish this, just paying down directly from a checking account is

[@marshallwise2039]

Boy, you certainly took a simple concept into a confusing mess. Just take your full monthly checking account deposit and apply it to paying down the principle. Then pay your bills with your heloc. This concept can only work for those you have a surplus checking account balance. If so, your mtg. will be paid off in 6-10 years.

[@kkpsk]

Agree.

[@jimmywallhanger8402]

Don't you then have the heloc debt? I'm so confused.

[@piercechoi3657]

@@jimmywallhanger8402 You are pretty much moving balance of amortization to HELOC and taking advantage of interest. But like OP said, I don't think it's good idea for most of American who live daily life from paycheck to paycheck

[@andreagoodwin4967]

It wasn’t confusing. And you shouldn’t be putting your money into your checking account! You put it all on the HELOC. You pay your bills on a reward-bearing credit card and pay that off with the HELOC. What’s confusing?

[@andreagoodwin4967]

@@jimmywallhanger8402 Your paycheck is applied to the HELOC like you would use your checking account. The longer it sits there, your balance is being paid down.

[@bennettlockandkeymattandja9671]

This would take a lot of spending discipline to not eventually max out the HELOC and still owe a huge mortgage.

[@kisalu216]

My only concern is that when you make a huge principal payment the next month, you still have to make your monthly mortgage now that you have maxed out your HELOC and you have to put your other expenses on there. It doesn’t leave much question for your regular monthly payment.

[@LSUtiger607]

And when COVID comes, you can default on three debt payments instead of one.

[@Viper4ever05]

lmao

[@HappyCleanersWA]

Hahahaha soo true

[@javell182]

Lmaoo

[@zhenya2639]

Thank you so much for the good explanation! Love your videos! Thank you for the great work!

[@ricot2]

If the mortgage is paid out of the HELOC monthly, how would that be different from the monthly payments you are currently making ?

[@StocksDoc]

the BEST of these type of videos . . . explains EVERY detail

[@oliverA4936]

He stopped using numbers at the 13 minute mark. I didn't understand it after that

[@rogaineablar5608]

So people who use auto-payment might get hit with a fee when charging the monthly bill to a card (as opposed to a bank EFT) and even with 'manual' online payment, they often get hit with a 2-3% charge when using a card. Additionally, some HELOCs have a $500+ minimum withdrawal (check your loan's terms). It's probably better to use an actual checking account in place of the card if you are looking to avoid interest/fees and can support normal expenses. The HELOC part still makes sense to reimburse the checking account, assuming you direct-deposit your salary.

[@theconquered]

So I just want a clarification. Say my mortgage payment is 1900. The only way this helps me in the future is if I pay monthly say 2200 so that additional 300 dollars go into principal only. But because the heloc acts as credit card then it's like I still have more money to spend. So then my question is why use a heloc and not just put the additional principal directly. I dont know if I'm missing something.

[@Debate_everything]

Because if you put all your extra cash into the mortgage, you have no extra cash whereas in the line of credit you can still access that cash if needed.

[@mr_smilegaming8842]

@@Debate_everythingBut if you have a HELOC and not use it, you still have the maximum available amount that you can draw from. Instead of using it to paydown principal, you use 0% interest rate (your own money) to pay down your mortgage.

[@conikutch]

@@mr_smilegaming8842this requires spreadsheets. need to compare which will give u a better strategy. if the mortgage is high and u plan to pay it off sooner, I can see how it can work. This strategy is good for paying off all the debt at a certain period of time, as per salary allowed. it might save some dollars… some dollars vs the effort of monitoring the expenses to the last cent.

[@sirturdaloter141]

It all depends on cash flow after bills. Be sure to have an emergency fund for the unknowns, (water heater, tires, medical). You just put your check in the HELOC every month and depend on cash flow to pay it off.

[@TheKwakBrothers]

Absolutely, having an emergency fund is crucial. The strategy focuses on using your cash flow effectively by depositing your paycheck into the HELOC. This way, you reduce your principal and save on interest while still having access to your funds if needed. For a deeper understanding, check out this explainer video: kzbin.info/www/bejne/fnrZnmRtndSlZ9U.

[@aj_aka_alan]

I think you're missing a component here where you have to keep on making payments out of that HELOC towards your mortgage (at least what you normally would have spent). BTW, not all HELOCs allow this kind of behavior such as the one with my CU

[@jonnyboy4774]

Great point didn't even think of that. That kind of makes this pointless for me because to pay the heloc down while paying a monthly payment seems difficult

[@bigbusiness6067]

@@jonnyboy4774 did you try it? If you did how’d that work out for you

[@raiden031]

​@@jonnyboy4774using a HELOC will most certainly cost more than just paying directly from checking account to mortgagr

[@consumerdebtchitchat]

I've watched multiple videos like this. It sounds like a labyrinth to pay off your mortgage - with many pitfalls. I'll just stick to paying extra on principle. Simple. But the end result is the same.

[@ahikernamedgq]

The end result is almost exactly the same, with almost the exactly same timeline, with far less unnecessary complexity and risk.

[@tbarcrowe]

Agree don’t lesson to this guy. Just try and pay an extra $500 or $1000 each month towards your principal. Much easier less headache’s

[@danieladugaro1551]

This does work , however, I would not borrow against the heloc for other expenses. I used a heloc to payoff my mortgage quickly as the interest rates were less at that time compared to the mortgage. It allowed me to pay off my mortgage sooner than locked in. The variable is to review the best route of interest when borrowing. Today, the mortgage rates are at a all time low in history, which a fixed mortgage would be better. I typically use both for home ownership.

[@ahikernamedgq]

@@danieladugaro1551 the problem with using a HELOC is that - other expenses come up and it's easy to use it for whatever. Your washing machine/car/fridge/etc breaks down. It's easy to rationalize things. Using the HELOC doesn't fundamentally support the longterm discipline and focus needed to pay off large consumer debt or a mortgage. And, if your financial situation changes (ie laid off, etc), you're stuck - at least temporarily - with a very high interest debt payment added to your overall budgeted expenses. It's not a wash and this is such a silly "strategy." In watching this video, and about 20 videos like it, you quickly realize all these "financial gurus" are 1. explaining the process exactly the same way - meaning they are just repeating what they heard somewhere else, and, 2. it's clear that they (esp the Kwak Bros) don't even understand how this works - they're just in it for the views they get on their channel, which you can't blame them for. But this "financial strategy" does not seem sustainable over time or anywhere close to worth the risk.

[@BKLNHobo]

An outstanding HELOC loan actually interferes with the ability to refinance the mortgage.

[@adatshhc]

Next week: How To Plan A Bank Heist To Pay Off Your Mortgage

[@ahikernamedgq]

YASSS!!!

[@SilverCSRT4]

LMAO. Love it!

[@jcmolette1613]

As a Black person (at least you look black) you should endeavor to stay away from anything that remotely sounds crime - even if it's a title to evoke clicks...if you don't understand why or think I'm stupid, then never mind.

[@adatshhc]

@@jcmolette1613 Being that you are of obvious limited intellect, I advise you to resist your desire to message strangers in KZbin comments for attention. Otherwise your sick and demented mental programming will continue to be exposed. 😉

[@ahikernamedgq]

@@jcmolette1613 I think he was just joking?

[@Prizelife]

What if they freeze your account , why would you put your income in your heloc when bank has the option to freeze HELOC?

[@AK47HEAVYMETAL83]

If I had access to 50k, I would probably only use 5k to eat at the principal each time, might take me 5 months at a time to pay the HELOC off in full, but at least I’m not tying my entire paycheck into the HELOC…I’m not comfortable with that 😨😨

[@joshharris7193]

It’s not just a 30 day interest free period from the purchase of your pen. You have till the statement closing date. A lot of people don’t know that. Probably should mention it.

[@brentglittle]

I must be missing something. This is the second Video I've watched on pay off your mortgage sooner with a HELOC but all the conversation is about paying bills with a CC and using the HELOC to pay them off. If you use the HELOC to pay down your mortgage by 50,000, sure you mortgage total is less but now you have a 50,000 debt with HELOC with a huge interest rate. How does this pay off your MTG early? Sounds like you incur even more debt.

[@arejaydubya]

I'm with you on using a 2nd position HELOC to pay off your mortgage. I just got rid of my mortgage all together and replaced it with a 1st position HELOC. Much easier for my stupid brain to wrap around. I have my paychecks direct deposited into the HELOC, pay everything I can with my rewards credit card and then pay that off at the end of every month. Anything left over drives down the average daily balance but its also available to me immediately if I need it for an emergency...unlike a mortgage.

[@pinballsteve1192]

Ryan Woodman can those be used for a first time home buyer? I want to start right and get ahead and save a bunch of interest but would I already have to have an existing mortgage to turn it into a 1st position HELOC like you did? Can’t seem to get an answer on this question. Or could a 20% down payment count towards equity to start a HELOC from the start? Almost ready to buy and this looks great but will I as a first time buyer be able to get it. Thanks

[@arejaydubya]

Pinball Steve I believe you can qualify using the 20% down to bring the borrowed amount down to the 80% range usually required to qualify for a HELOC. Obviously other factors play into it as well, but I think you’d be off to a good start with 20% to put down.

[@liloapapa7329]

@@arejaydubya ok, that makes a lot more sense to me, too. speaking about being able to wrap my head around it...yeah, a first position HELOC sounds like the way to go. But, I am kinda living paycheck to paycheck with the Corona Virus situation...does that affect things? I am debt free adn pay everything off every month.

[@TheDoodleZone]

Thank you

[@fulim226]

So technically we can only make 1 big payment every so often. Then we just pay our month to month mortgage amount until we pretty much get the balance of the HELOC to $0 and then make a big payment again? I can imagine it in my head and its wonderful but for some reason something doesn't make sense... SUBSCRIBED and you got that like. More videos going into moreeee details please.

[@ladyema8836]

Check out Laura Pitko's explanation, she does it with a credit card. She has 2 videos on this, the second one is very detailed with an excel spreadsheet. "How to pay off a 30 year home mortgage in 5-7 years"

[@fulim226]

@@ladyema8836 I watched her explanation already, but my question is how is one suppose to pay for the HELOC and the regular monthly mortgage with just one cash flow source?

[@ladyema8836]

@@fulim226 I had a hard time grasping this at first too. It works if you have money left over after your bills and expenses. 1 - Put all your income in a month as a "Payment" towards your credit card or HELOC. EXCEPT any money that you will need for any bills or expenses that will not take these forms of payments. 2 - Make your bill payments, buy things you need (groceries, gas, oil change, etc) with the credit card or HELOC. 3 - Because the credit card charges you interest rate based on a daily average. It will charge you less interest based on your balance, which you have reduced significantly by putting your income in there. 4 - Any money you have left over after your bills and expenses gets left in the card or HELOC. So lets say you have $300 left over every month, it will reduce you balance every month by that amount minus interest paid. Better if you have a cash back, that payment also can be put into the balance. Note: From the beginning to somewhere in the middle of your mortgage payment years, you will be paying mostly interest. Mortgage payment is: Principal + Interest + Insurance + Property taxes. So your $1000 payment every month is only reducing your house debt amount by only $200-$300 a month. Your giving away your money. Laura has a spreadsheet that can tell you up to when it is a good idea to do this, and when to stop. Hope this helps.

[@ladyema8836]

@@fulim226 Also I was supposed to put this in my list, you are paying your mortgage with your credit card or HELOC, unless your bank like mine doesn't allow you to pay with these methods.

[@mhermin5247]

grrr. I followed along with you but your video doesn't go into the heloc interest part. how much interest are we paying on the heloc? if I take out 20k of my heloc to pay toward my principal, and now I have a 20k balance on my heloc, what interest am I paying on that? I get that we would be paying our full paycheck into the heloc but we would also be using that balance to pay the mortgage and other bills. so finish your train of thought and explain how much we pay in interest for the heloc loan. or am I missing something?

[@GoElimin8Mortgage]

The interest in HELOC does not matter a lot. The important thing to know here is how much you need to pull from HELOC to pay the 1st mortgage. If you over pull, you will incur unnecessary interest. If you pull less, then you are not using the full potential of the HELOC strategy.

[@cesartabanao4125]

How are you paying the mortgage when you put all income in heloc I think you forgot to mention that but really good money thinking

[@dustinbarnett9402]

Lump sum from HELOC goes to mortgage. Pay HELOC back down with income, rinse and repeat.

[@jaylmw08]

Ceasar, other examples don't use the entire HELOC amount like he did. Even he advised against it. So say you pay only 25k towards the mortgage, now you still have the remaining half to pay bills (this is where your regular monthly mortgage payment comes from.) Another reason not to use the entire HELOC is in case of emergencies.

[@billyjeung4739]

Dustin Barnett lum sum goes to the mortgage and then ? Will the mortgage payment goes down ?

[@jaylmw08]

@@billyjeung4739 mortgage payment monthly amount stays the same but your saving interest and reducing the loan term cause your paying down the principal faster.

[@theairforce1877]

Dustin Barnett He actually didn’t explain the rinse and repeat part correctly. He didn’t mention really anything about how you pay the mortgage down after the initial 50k he put on the home from the HELOC. He then started talking about the credit card. He left out that you probably want to but 40-45k on the house but not max the HELOC out. Then you put 5k per month on your HELOC acting as your checking account and pay your bills monthly using 3k of your 5k while paying back your HELOC monthly with the other 2k. Once you do this for say 6 months or however long you want to do it you have paid back 12k back to your HELOC. You now take the 12k from the HELOC and pay it on your house, doing this over and over rinsing and repeating. He skipped all of that!

[@outingsforoldladieswhoaren7664]

There was absolutely no explanation as to how this actually allows you to pay down your mortgage in 5 to 7 years

[@TheKwakBrothers]

I understand your concern. The strategy uses flexible financial products to optimize how you pay down your debt, reducing both time and interest. For a clearer explanation, I recommend watching this video: kzbin.info/www/bejne/jpqaZoKGmrOqnKs.

[@OnTheEdgex23]

Basically you’re making a huge principle payment then offsetting your other expenses to something that has you paying a lower total amount of interest. You can do the same thing by putting all your extra money towards your mortgage anyway.

[@Collieb7]

Isn’t there interest on a heloc

[@daemos_magen]

Please don't use an example that you clearly state you don't recommend. Otherwise, you are awesome.

[@TheKwakBrothers]

Thank you! :)

[@ultimatelife5167]

Wow! This opened my 👀, excellent idea but need lot of planning and discipline, not for everyone for sure, thanks!!

[@JibriTV]

This video is decent at explaining the benefits of a HELOC, but he NEVER addresses inflation and the cost of paying down a 4% loan early. If you can make an average annual return of 10% in the stock market that money is better spent investing than paying down a loan. Use your money to make money, not to make the bank money. Inflation averages 2%/year, so the value of your mortgage payment decreases slightly every year. $1,000/month ain't what it was 20 years ago, and won't be what it is now in 20 years time.

[@someutubchannel69]

Which software/hardware do you use for the whiteboard?

[@frankmasias4935]

I honestly think you made a little more confusing than it needs to be. I get what you saying, but how do you apply this to the regular person who live paycheck to paycheck, and the bills are paid during the month instead of a specific date.

[@GxGNoir]

Yeah it was very confusing I didn’t understand at all lol

[@anyssavelasquez4508]

Unfortunately this doesn't work for that type of situation. If you are living paycheck to paycheck chances are you don't have an emergency fund saved up or play money. I started by opening up a savings account with another credit union and putting $5 a check into it. I was a single mother of 3 and it saved me so any times. Once you have money saved up for emergencies it's easier to start planning for this kind of stuff.

[@allincamo]

all I got was HELOC usage , but where's the 200k mortgage payment every month ?

[@alexanderpowers1]

No! Get the longest, lowest interest mortgage you can find on the least expensive house that will suit your lifestyle and never pay it off. Certainly do not pay it off with more expensive money.

[@alexanderpowers1]

Andrew H Yup. When they have to appeal to how paying off a loan early makes you feel (walk in grass you own) rather than asking you to be honest about personal risk tolerance and liquidity preferences and opportunity costs of capital. People need to “feel” less and think rationally more.

[@marshallwise2039]

It's not the stated rate, its the effective rate. The effective rate is much lower than the stated initial rate.

[@terrencemcphail5782]

it is as simple as get set amount in savings take all ur pay put on principal and if emergency come up use heloc not max out heloc, u not saving extra money but u not putting urself in a bind and u have flexibility still

[@EsJustMe]

Still not understanding. If I have a helicopter w a 6% rate ... but my mortgage has a lower rate... how does that help me?

[@Picwajzzz]

then you buy a tenk at 3%

[@FredBrown-i9c]

So I understand the scenario with the credit card and using the heloc as your checking account but I don’t understand how the mortgage is paid off early ? How is the principal payments accelerated?

[@GoElimin8Mortgage]

This strategy uses the discretionary income to pay extra on the mortgage while giving you access to pull from the HELOC. Then it builds from there adding paying off smaller debts with high interest rates and make a snowball effect.

[@darkmanx2g]

What do you do if you have credit card debt? I am assuming you shouldnt start this strategy with any debt and only mortgage debt.

[@jonathanbulkheed338]

You can use the HELOC to pay off credit card debt. This is assumed to be a good idea IF you have the average high credit card interest rate of 14% and the HELOC is typically a much lower interest rate. However, if credit card debt and the interest accumulation is the issue and the reason for your question, I would recommend applying for a 0%APR for one year and do a balance transfer to that new card. (Example: Wells Fargo Reflect card). 0% interest on a balance transfer beats any HELOC and/or credit card interest rate.

[@mohammadmustafa5349]

Hello Everyone, To anyone who has used the HELOC Strategy/Velocity Banking. I have a MAJOR question: Once you paid down any given the debt, such as a Credit Card, do you allow that money to continue to attack the HELOC meaning: just let it do it’s thing while recycling through the HELOC in turn paying down the HELOC faster, allowing you to perform another pull of whatever amount you usually pull for the big chunk payment. OR do you take that extra amount that you have and use it in a Snowball effect? Thanks All.

[@GoElimin8Mortgage]

You are correct on both. Good listening and observation skills. This strategy is a Snowball + Avalanche effect on steroids if you understand the technique.

[@jjpac2011]

Awesome video. Very generous of you to share this.

[@mn6780]

Awesome thanks I have been wanting this info for a while now

[@mariabercova2450]

Which is the best bank to apply for HELOC at?

[@bannertraveller5879]

third federal savings and loan

[@sancochito75]

Can you use a better example to what is the interest for the heloc?

[@Stylevloggers215]

I get it, so if I pay with a HELCO, the payments made can be used instead of paying a mtg company and u never see ur money again. So money invested in mtg pays goes back to you, so u pay off 20k in a year. You can use that 20k to buy another property.

[@slimim17]

Interesting yet somewhat ridiculously risky strategy. You are essentially using the HELOC to pay down your mortgage balance. The HELOC in essence is trying to be a low interest way to borrow money to pay down the mortgage (assuming you dump income into it to keep the balance as low as possible most of the time). The problem is see is how do you get your HELOC balance low? If you are disciplined enough to budget and pay down your HELOC just freaking use that money to pay down your mortgage without the risks of a HELOC

[@marshallwise2039]

Only a heloc is open ended all other loans r closed ended, if u don't understand this concept, I wish u luck.

[@defrank1870]

Um... aren't HELOCS just an adjustable rate mortgage again? The rates are variable, so that means the Fed dictates your rates at all times. It's not fixed.

[@rockywiley9547]

Does one continue to make the mortgage pmnt which includes interest, escrows for taxes and insurance?...Do you just make principal pmnt?...otherwise your HELOC interest is added to your mortgage interest....

[@BigBlockEntertainment]

ROCKY WILEY this is my thoughts as well? The Heloc will only go down by the amount of cash flow you have. You still have to make your mortgage payment every month so if your living paycheck to paycheck your heloc will never go down.

[@jaylmw08]

You make a reg monthly mortgage payment (prin & int) from the HELOC. Obviously this strategy isn't recommended for people who have no positive cash flow (living paycheck to paycheck.)

[@shirleytarver772]

My understanding is; add your income to heloc to continue paying bills which include mortgage.

[@thefireman2854]

NO. There will be no mortgage payment. You are replacing the mortgage with a HELOC (refinancing mtg balance into the HELOC) As youearn money deposit it on the HELOC balance. Pay all your oyther bills from the HELOC as they come due.

[@thefireman2854]

@nb Android It is a refinance of the MTG into a HELOC. The total balance of the mtg is placed on the new mtg...the HELOC. So the 200k still exists, it just gets paid down so much quicker because it is simple interest under a HELOC and amortized under the old mtg. Its like having a Credit card with a limit of 200k, as soon as you pay down some principle that amount is available to charge back up.

[@marioeid930]

I wish you could show the difference between paying extra(chunk payments) with out heloc and the heloc payment. Just want to see how much they save.

[@MichaelGamber]

About $17 per month. No, really

[@marioeid930]

@@MichaelGamber thanks, i did independent research, these guys are salesman to thier core

[@smarterfinances]

@@MichaelGamber It's incredible to me that you'd call them salesmen and give this absurd answer. You can't possibly put a $ value on it without the terms and rates.

[@smarterfinances]

There isn't all that much difference in the math. It completely depends on your situation, the terms of your mortgage and HELOC, etc. Use the calculator to get a sense for the financials, but... The real difference is that the HELOC is what Sam called "open ended." If you make an extra mortgage payment this month, that decision is final. If your situation changes in six months, you can't redeploy that cash. A HELOC is a relatively low-cost way to maintain more liquidity. @MichaelGamber isn't wrong that they're selling, of course. They're presenting optimistic numbers and assuming a lot of financial discipline. And they're hoping to hook you so you'll buy resources from them. But that doesn't mean their math is wrong -- and they gave you the spreadsheet to test the numbers for yourself.

[@MathMajor2pi]

If you really could put all your income in on the 1st, and pay out on the 31st, the difference would be the interest on the value of your paycheck each month. That is the entire difference. In a perfect scenario, call it $30/mo. for someone with average salary. -- But nobody gets paid once a month, so cut the $30 in half -- Credit card payment date likely isn't the 31st, cut it some more -- HELOCs come with fees...cut it some more -- If HELOC rate is higher than the mortgage rate, you lose money -- HELOC has risk....what's the value of the risk?

[@christinetiger8326]

I inherited a home from my brother that has a Heloc, we both lived in this home when he passed. Do I just pay that off when I sell the home? I've been making the monthly payments btw.

[@heavymetalweld805]

Is there way you could break this down in more of a timeline example? From what happens on the 1st through to what happens on the 30th. Because the way it was explained went over my head.

[@sammybully5030]

noo because it works in a perfect throretical world but it won't work on a tight budget. and do not get a heloc for over your yearly salary

[@iptvclub1575]

It should have been noted that this is a POST Budget strategy. You have to be spending less than you make and have your budget in order to optimize how much you can chunk. So it’s not for everyone. To answe your question, let assume you make a 25,000 chunk and your cash flow after all expenses are paid is 2k a month. Let’s assume you make $7000 a month and it’s paid on the first. So when you do the chunk you have a balance of $25 k on HELOC. As soon as you get paid on the first you deposit your entire paycheck into the HELOC, which then brings the balance down to $18k. Since with HELOC you pay interest daily only on the outstanding daily balance (interest rate /365 x outstanding balance). So it’s in your interest to keep your money in the HELOC as long as possible. Now throughout the month you only take out money to pay your expenses, but that happens throughout the month (not all at once) by the end of the month you have you $5,000 spend coming back out of the HELOC, and your balance is now $23,000. The key to this is that even with your HELOC being at say 5% you didn’t really pay 5% on the entire 25k, because you used your income to put the balance to 18k and slowly over the month brought it back up to 23k.

[@raiden031]

​@@sammybully5030it doesn't even work in a theoretical world unless you use sleight of hand tactics to leave out certain details

[@digismoke]

This is sounds like it will only work as long as you dont spend more than you make. But it is possible.

[@freedommaximalist6274]

Or get a high balance CC and pay all the expenses with a 0% APR for 18 months then progressively pay installments divided by the total balance. And repeat..

[@Khotsa]

What about the mortgage payment? How do you handle that?

[@tevinroth1114]

Appreciate the video. Although I think I missed it, how are you avoiding two payments (your mortgage and your HELOC chunk). To me it seems like your still paying two payments but disguising it in the balance of the heloc... .. . ?

[@Stalyen45]

I think your income being direct deposited into your HELOC serves as the payment for the HELOC.

[@GoElimin8Mortgage]

It uses your discretionary income to pay the principal on the HELOC. And it builds from there when you are paying off your credit cards.

[@Ethernet480]

Are there HELOCs that are lower than current interest rates on mortgages??

[@jonnyboy4774]

Examples don't include rates and interest saved in mortgage vs interest paid in heloc? Kind of the whole point

[@alextv8975]

Every single one of these type of videos can be reduced to one simple rule: move debt from higher interest rate account, to lower interest rate account. If this isn't the case in your situation, this won't work.

[@mujjuman]

Also need to have cash flow

[@BKLNHobo]

Except mortgage interest is tax deductible and HELOC interest isn't. A mortgage can also be refinanced at a lower rate and for a different term.

[@mujjuman]

BKLNHobo does it make more sense to pay the mortgage interest while getting a tax deduction? Or does it make more sense to pay it off “quickly” using the heloc. Genuinely asking because I haven’t figured out the answer for myself

[@thefireman2854]

@@BKLNHobo HELOC interest IS deductible if the funds are used to purchase the home, and or used to refinance a mortgage that was used as the purchase mortgage. Also funds drawn on a HELOC for improvements to the home may be also. Always consult a tax professional, even though generalities exist such as the info above, everyones personal situation needs to be considered individually.

[@michaelr8819]

Excellent! I feel like I understand this now! I can do it!

[@ncp3077]

In the second method at what point do you pay on the mortgage?

[@myfinancialsuccess2704]

You CAN'T borrow more money at a higher interest rate, to pay down lower interest rate debt quicker. The only argument here is that you are front loading that monthly mortgage payment and some HELOCs use daily or weekly compound interest. We are talking about *possible* pennies not counting the numerous fees, problems, and headaches these loans bring. Then you would need to have cashflows so significant to save whatever your positive cash flow average balance is that month. If you have 50k in expenses and 50k in cash flow each month, you wouldn't (I hope) take out a HELOC. If you had such large positive cash flows, you should stick them towards your loan balance and avoid the HELOC all together. The argument comes in because simple interest is amortized over the life of the loan. That means you pay a percentage on the balance due that month in interest expense and the rest goes towards the principal of the loan (for example, 3.5%/12 = .29%, or 1/3 of a percent of the total principal due). This means that on a $1,000 house payment towards a $150,000 balance loan, 44% of your ***payment*** is going towards interest. This doesn't mean you are paying 44% today, that's just silly! In a HELOC, the interest is calculated with compound interest, at a (horrible adjustable) rate greater than that of your mortgage. The interest expense realized each month is the same as that of the mortgage (or more because the interest rate is more). And you pay this interest IMMEDIATELY. Generally you only pay interest in a HELOC for a few years, however I have a video where my example also shared what would happen if you made extra payments to get the HELOC paid off in 3.5 years. You end up paying MORE for the HELOC + Home loan than if you just put those extra payments towards your home loan instead to get it paid off faster. When you put it into an amortization schedule and calculate the actual interest expense for each option (which is what is the only difference), the HELOC is more because it has a higher interest rate. I walk through all of these details in my video. Walk with me while we get out of debt together. The ups & downs. Financial advice and insight.

[@someutubchannel69]

What do you think about UFF Money Max Account?

[@GoElimin8Mortgage]

Expensive. But it is the same concept.

[@fortitude1981]

I’ve watch the video a few times, but still don’t understand how this can pay off my mortgage faster

[@lotusflower3154]

You can use a credit card and do the same thing without so much risk because a helco is like a second mortgage

[@TheKwakBrothers]

Credit cards can be handy, but they typically have higher interest rates and lower credit limits compared to financial products we discuss. The flexibility and structure of the banking products we recommend are designed to save more on interest and help pay off your mortgage faster. Check out this video to see how it works in detail: kzbin.info/www/bejne/jpqaZoKGmrOqnKs.

[@derrickcordova7106]

Why wouldn’t I just put extra money on the principal of the mortgage?

[@chicotata]

I wish you could’ve used examples with the calculator and mortgage payments.

[@telwingeorge]

Isn't the interest rate on the heloc higher than the mortgage, also does this drive your credit score low

[@hellokitty8552]

telwin edathil because heloc uses simple interest, for the earlier years of the mortgage, you are actually paying less interest vs a conventional mortgage which uses amortization interest.

[@adampham9661]

kitty chu it would be better with a refinance

[@billyjeung4739]

kitty cat so just borrow more money lol

[@noopsspoon5250]

Drives score down: New credit : HELOC and credit card Length of credit history: will lower average time on existing accounts. Maxing out available credit: Example. 50000 line and you take 50000...this is a no no Drives score back up: (over time) Payment history: More on time payments!! Credit mix: Long term (mortgage) and short term credit (HELOC & Credit Card) Debt eliminated: nuff said

[@marshallwise2039]

No matter. Interest is charged on the Balance! Because the HELOC balance never grows because you are constantly paying it off.

[@scottherron4481]

How does the HELOC get paid off? Is it because you don't spend all of your paycheck? What about a certain amount going into savings? Is this only for someone who has money left over at the end of the month? Thanks.

[@TheKwakBrothers]

The strategy that Accelerated Banking teaches involves utilizing a specific banking product to help manage your finances with the aim of paying off your mortgage more efficiently. The approach focuses on optimizing how your cash flow is used to reduce the balance more effectively, potentially leading to savings on interest and a faster payoff period. The implementation of the strategy isn't dependent solely on having a surplus at the end of the month. It's about reallocating your financial resources in a strategic manner - this could involve adjusting spending habits, managing cash flow, and perhaps identifying ways to utilize your income more effectively to pay down the principal of your debt. For a detailed insight into how this strategy could work for someone in your particular financial situation, our webinar provides a comprehensive look and it may help to dispel any uncertainties. If you have more funds available at the end of the month, that could indeed contribute positively to the acceleration process, but it's not exclusively for people with surplus funds. It's about the strategic application of your income which our strategy outlines. To learn more, you might consider watching one of our webinars or exploring the resources we provide.

[@jtortiz5605]

Be careful because your Heloc draw period will end and this process stops, also Heloc rates now are much higher because of the prime rate. I work approving Helocs for a bank.

[@TheKwakBrothers]

Thanks for your input! You're right; it's important to consider the draw period and current rates. The strategy is designed to adapt, and you can renew your draw period or adjust based on your specific situation. For more details, check out these insights: kzbin.info/www/bejne/jpqaZoKGmrOqnKs.

[@taylerallen6282]

Dummy here; If you make a big principal payment on your mortgage that doesn't exactly lower your monthly mortgage bill, it simply allows you to pay off your mortgage faster, right? So, ho who you still pay for your mortgage AND the balance on the HELOC? Im not sure if I completely understand. We're trying really hard to figure out how to pick up rental properties in this market and maybe using the HELOC would be a great way to do that, but we figure that paying off our own mortgage first is probably wise, so can someone explain?

[@matthewdecker6162]

What is the difference between this and just making regularly scheduled principal payments on top of your regular mortgage payment?

[@Iamjoeycross]

From what I know, when you pay you’re mortgage, the money is GONE FOREVER, when you pay it out of our HELOC, the money is still available because the funds are reusable. It’s like a reusable credit card account with a low interest rate.

[@kylekent3036]

If you make additional principle payment instead of the Heloc then you don't have a loan open with interest you have to pay off. This method is just shuffling money from loan to credit card and back while paying bills. Replace heloc with the word credit card and you see this quasi scam. You put all your money on your heloc credit card, then at the end of the month put it on your credit card to bring heloc down to 0. Then put all your money back on the heloc. Just make the extra payments.

[@Iamjoeycross]

@@kylekent3036 yea what’s cool. But when you make the extra payments. You’re now check to check. When you make the payments from your HELOC, you STILL HAVE the money. The big take aways from this method are: 1-being able to make bigger “chunk” payments sooner than later. We should know the time value of money already. 2-switching from a mortgage amortized interest to simple daily interest on the HELOC 3. The use of the credit card extends the amount of time we get to pay bills each month PLUS the cash rewards from putting the majority of expenses on the credit card. 4- if you do it correctly you barely pay any interest on the HELOC because you check deposits lower the balance throughout the month. I have a mortgage at 58k at 4.5% and a HELOC at 2.99 variable. If I cared to pay my mortgage off I cud dump the entire HELOC on mortgage and trade the 4.5 amortized interest to 2.99 daily simple interest. That by itself is a better deal. But I wouldn’t put the whole amount at one time. I’d do it in chunks of about 6k each month since that’s my monthly intake. It’s essentially becoming your own bank while not ever losing the money. The use of the credit extends the amount of time to pay bills. You have to have monthly cashflow and discipline to do it. It’ll definitely save you money and speed up the payoff without ever sending in extra payments that go to the bank only. Look at what banks do. They ask you to deposit your money (promotions for savings accounts and direct deposits.). We provide banks cash flow just like our jobs do with us. Banks then pay you interest (very low) for that money, then loan out your money to make even more money at a rate higher than what they pay you. Capitalism is nothing more than using debt to make money at rates better than you pay out. Banks will pay you .40 APY on your money but loan out mortgages at 3%. That’s not just a 2.6% increase either. If I had 100,000 bucks in the bank, that’s 400 dollars I make from the bank. But the bank used my 100k to lend out 1M mortgage and make 3% amortized interest for 30 years from someone else. Do you think they care about loans and debt? Consumers care so much about being IN debt when the whole world works on being in debt. Being debt free is not the smartest thing when you’re looking to build wealth. But it’ll make you feel good inside you don’t owe anyone. I wouldn’t care to owe anyone of my return was higher than the loan I carry. Hence why real estate s a wealth builder. I have a loan at whatever percent. But my cashflow allows me to pay the loan back with someone else’s money AND have some left over for myself? I’d keep getting mortgages and properties and repeat, rather than trying to become debt free. Debt is your friend when your plan is to be wealthy. But I’m sure you know that.

[@kylekent3036]

@@Iamjoeycross when you use the heloc your still check to check you are just a holding a balance you have to pay instead of no money. The heloc is not a magic black hole. You have to pay the heloc off still after you spend it.

[@Iamjoeycross]

@@kylekent3036 in theory I am. But I still have the funds in my HELOC to use rather than flat broke check to check. If you already have an emergency account and don’t want cash rewards from credit cards and only want to be able to make additional payments per month in the amount of your monthly cashlfow, then don’t use this option. It’s not mandatory. Everyone is free to use the method they want based on their level of risk, and comfortability. I used credit cards and debt all the time so this is a no brainer for me. Others just want to make extra payments. Every dollar counts tho, so I’d personally use the HELOC as a rotating source of making bigger and faster payments rather than just using my own money. You do pay the HELOC back however. Before you make another chunk payment. You are correct that it’s shuffling money around from one credit line to another that both have interest. But the numbers make sense and that’s all money is. Math.

[@KaspiansTravels]

Every penny you have should be parked somewhere to either reduce or gain interest on a daily basis--I don't know why this is difficult for people to grasp. Example: If I got paid at the start of the month, had a big $5000 trip planned for the end of the month, I'd put my money in a high, daily interest saving account for the 30 days while I wait. If I repeat that every time, I come out way ahead. This HELOC strategy is the same, but with debt. In the whole equation, compounding time is more important than the interest rate.

[@TheKwakBrothers]

You've got it spot on! Just like parking money in a high-interest savings account to earn interest, using a HELOC strategically reduces daily interest on debt. It’s all about maximizing how and where your money is working for you. If you’d like to learn more about this approach, our free webinar breaks it down in detail: acceleratedbanking.com/free-virtual-class?sl=youtube

[@ks031988]

Are we supposed to make the mortgage payment each month with the heloc as well?

[@aldmortgages]

Can you make a video showing the numbers in comparison on spreadsheets

[@vallang4832]

It is up above. Tap on the blue debt free accelerater.

[@Milly-tm8gb]

Great info thank you 👍

[@MrEtocsam]

My mortgage is less the equity should I pay it off with the heloc?

[@tjlazer71]

Most that advocate the Velocity method just tell you to live off the HELOC and pay for all expenses throughout the month. I like your idea of living off the interest free Credit Card, then paying it off at the end of the month, right before dumping your next pay check into the HELOC! Nice idea!

[@alanberry4919]

Forget the math in this case. If you use a HELOC, the bank can call up the loan at any time and you have to pay it. If you can't, they can take your home. DO NOT DO THIS! You add risk to what is essentially a promise not to call up the loan for 15 to 30 years. Better would be to track your cash flow and put all the extra money you have on the house which is what this process is doing anyway. Add to that, you don't pay extra interest.

[@raiden031]

But KZbin pays people money to create videos that promote nonsensical ideas that sound good

[@doofyhere]

what day should I change my credit card due date if my HELOC is due on the first??

[@mash_amba]

Once you make the principle payments using the money from the HELOC you still need to make monthly payments on the mortgage, I didn't see that addressed, how is that supposed to be handled? Keeping in mind that other (non mortgage) expenses can be paid using the credit card method. Thanks

[@TheKwakBrothers]

Great question! When you use the HELOC to make principal payments on your mortgage, the strategy involves using your paycheck to reduce the HELOC balance. This effectively lowers your overall interest costs. Your monthly mortgage payments continue as usual, while non-mortgage expenses can be managed with other credit tools. This cycle helps optimize cash flow. You can learn more here: kzbin.info/www/bejne/jpqaZoKGmrOqnKs.

[@JenBeyond]

Can you do this w investment property

[@randylape]

yes

[@robertgarcia5239]

Hey Mr. Kwak, Great video, i have a question and hope that maybe you can answer, i wanted to pay off my current mortgage of 45k @ around 10% interest and my bank is offering a line of credit at 4.75%, but the question is that when i got divorced about 20 years ago then i was awarded by a judge my current house, so just wondering if i pay off my mortgage and get a HELOC but bank wants my current wife to be on the application to show more income then just wanted to know if the HELOC is like a second mortgage and if my current wife will have any interest in my house? reason is because everytime she gets mad then she threatens to take my house like my ex-wife took one of my houses that was paid for, thanks for your time.

[@bannertraveller5879]

rule number one never get married. rule number 1 never get re-married

[@merkules2001]

Get her to sign a quit claim deed. Solves name issues legally. With state, not bank.

[@stacyannbarker512]

It’s not letting me download the book

[@xz3757]

Where in the second half of the video Does the mortgage gate payed down????

[@omniomega1]

Where I am lost is if we put $50,000 of the HELOC onto the principal and we’re making payments to the HELOC. How do we make payments to the mortgage?

[@jordanbird9270]

Freaking cool strategy. I’m doing this now on an all in one loan

[@marshallwise2039]

AIO set it forget. Turn key system. Congrats

[@88brandonlaw]

Quick question. Is this method feasible if your interest rate on your house is lower than the interest rate on your HELOC?

[@TheKwakBrothers]

Yes, the method can still be feasible even if the interest rate on a HELOC is higher than the interest rate on your mortgage. Our strategy is based on cash flow management, which involves using a banking product to strategically manage your funds to reduce overall interest payments and potentially pay off the mortgage faster. It takes into account the unique characteristics of different banking products to optimize the way you pay down debt. An important aspect is understanding how the interest is calculated and how funds are applied towards your principal balance. It's less about the rates and more about how effectively you utilize the flow of your money. We have clients who have successfully implemented these strategies in various interest rate environments. For more insights on how this could work for you, we recommend joining our webinar where we explain the details. If you're interested, you can watch one of our founders discuss this in more detail in a video here: kzbin.info/www/bejne/fnrZnmRtndSlZ9U.

[@MathMajor2pi]

NO! He is saying rates don't matter. They absolutely do, and "cash flow management" can't change that. Please don't be fooled by the charlatan. To elaborate, in the absolute best case perfect world example (which can't happen in real life), you save the interest on the value of your paycheck each month. In simple numbers: $50K HELOC at 8%, mortgage at 4%, $5K income. You'll "save" about $33 by parking your paycheck, but the HELOC interest will cost you ten times that.

[@ADBAviation]

I feel like Michael Scott…. Explain it to me like I’m 5

[@she-ro8561]

I am a bit confused on the second strategy. Am I paying extra to my mortgage or what ever is left over in the HELOC goes to principal of mortgage?

[@TheKwakBrothers]

Great question! The strategy involves using your HELOC to make principal payments on your mortgage. You "deposit" your paycheck into the HELOC, reducing its balance. Then, you use the available credit from the HELOC to make substantial principal payments on your mortgage. This method optimizes your cash flow and minimizes interest paid over time. For more details, you can watch this video: kzbin.info/www/bejne/jpqaZoKGmrOqnKs.

[@deborahdrake5758]

If you pay off your mortgage with the HELOC can you just keep paying monthly on the HELOC without using credit cards? In other words, can you just make monthly payments to the HELOC in any amount that you want to bring down the ADI? I'm assuming you will then have to pay your insurance and taxes on your own.

[@patricklancaster8684]

So what I wanna do say I own two houses one is paid off in full and what I owe about $50,000 on, but I have an adjustable rate I wanted to borrow money on the paid house and then pay the other house off and then have a lower overall payment That makes sense?