As a consumer oriented residential mortgage professional, I believe in providing information that educates my clients. Some of my competitors may think that I am crazy for wanting people to learn about mortgage elimination since they perceive my job as soley originating mortgages, however my goal is to help my clients improve their financial situations in any way that I can.
The goal of consumer education is more important to me than ever before given the current climate in the real estate industry. I strongly believe in the mortgage elimination strategy can work for many people and will post a revised article here shortly which shows how I have benefited from using these strategies personally.
Thank you, Frederic A Din
4 Comments on Mortgage Elimination - Part IV
Great post, I look forward to going back and reading the early parts of the system. I have heard of this before and I wonder how effective this is depending on the rate of the HELOC. Mine is about 10% right now and costantly adjusting. I can't see it is all black and white as always a good thing, I think it depends on your situation, steady income vs commission and varying interest rates. What is your take on that?
Greetings Michael, thank you for your positive comments.
The HELOC rate overall is not as important on making strides to paying down your HELOC to ZERO before you do another principal injection into your First Mortgage. The reason is you won't keep a balance on your HELOC long enough to matter what the rate is. Remember, with a HELOC you are charged interest only on the balance you carry, so the quicker you pay the balance down, the less effective interest you pay.
Situations change and the Hi-Speed Equity Builder software will help you see it in black and white regardless if your income is steady or commission based.
Thanks for the great comment and personal insight.
Frederic
PS to readers who are considering this mortgage elimination strategy.
From Chapter 9 of the book "The Secret that Banks Fear".
The Hi-Speed Equity Builder doesn't work for homeowners that have the following situations:
1) Bad credit 2) Recent bankruptcy 3) Negative cash flow 4) Irresponsible spender 5) Negative amortization loans 6) 100% mortgage - one loan 7) Non-Permanent structure property or Raw land
You need to be honest with yourself about where you are financially and whether or not you have the right mindset to make the Hi-Speed Equity Builder system work in your life. If you know that your situation is one that has been listed, please do not attempt to use the system until you fix the areas that need work. You will only create stress in your life, and you may end up in serious financial trouble. Once you are in the right position to use the system, proceed with caution and care.
Hello. I've been googling the HELOC method today and of course am starting out as a skeptic. I'm always worried about the hitch. I was wondering what you think of this government opinion http://www.fido.gov.au/fido/fido.nsf/byheadline/line%20of%20credit%20mortgages?openDocument
Since I've no access to the calculation software without paying $200 to review it, I can only go on warnings of others. However, I'm also skeptical of political and big-company reviews. So, I'm wondering - does the calculation actually assume extra principal payment, even after what would be needed to offset the higher variable interest rate?
Say I have an average of $4000 to deposit and sit during the month, a new interest rate that is 8% instead of 6%, and enough money to equal one extra mortgage payment of $1200 per year on a $150,000 loan.
Are you SURE that I'd save that much more money as opposed to having the smaller 6% interest rate, paying one extra payment a year and doing bi-weekly mortgage payments? Seems a little shaky to me especially since the HELOC rate is variable, and most likely continually rising. Have YOU personally used the method?
Greetings Stephanie, I appreciate your reply and questions.
There is a lot of misinformation regarding mortgage elimination and debt reduction strategies online and off.
The key to any strategy is desire, consistency, and discipline. If any borrower does not have these qualities, the results will be mediocre at best.
The Key Fundamental principle to mortgage elimination is first understanding the concept that interest on your mortgage is calculated on the daily balance of your loan.Once this banking principle is understood, then the entire application makes sense.
If you could reply to me via email (fred@homeloans.cc) and provide your monthly NET INCOME from all sources and your monthly EXPENSES (all household, auto, utility, grocercy, etc), all expense, I could run numbers using the software on your behalf.
Local information regarding the real estate and mortgage, foreclosure, REO, Bank Owned, & Short Sale listings for Imperial County, California. Serving Brawley, Calexico, El Centro, Heber, Holtville, Imperial and surrounding areas.
Frederic A Din
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Great post, I look forward to going back and reading the early parts of the system. I have heard of this before and I wonder how effective this is depending on the rate of the HELOC. Mine is about 10% right now and costantly adjusting. I can't see it is all black and white as always a good thing, I think it depends on your situation, steady income vs commission and varying interest rates. What is your take on that?