Life changer loan???

Question

I recently purchased an investment property using 30 30-year loan. I have been hearing about the life changer loan. Additionally, I noticed a post from 2 years ago speaking on it on the BP forum.

Is this just another version of infinity banking??? Does anyone have information/personal experience with this?

Thanks

Chris Watkins · Answer

Hi Cory! I'm a big fan of offset loans (Life Changer, All-In-One). They're actually the reason I got into lending as they can be a powerful tool  for the right investor. I have an offset loan on one investment property, and funnel payments from my other properties into that account to lower my principal (and therefore interest).

They're more complicated and hands-on than a 30-year-fixed, but can supercharge your investment while maintaining access to capital.

Happy to answer any questions you might have!

Greg Heden · Answer

I chose this option a few years back on my primary residence because I was in a debt reduction mode but wanted to maintain access to my equity.  The loan/line was underwritten at a 80% LTV and has a 30 year life. Basically it’s in place for 30 years with a small annual fee ($65). Unlike a HELOC that can get reduced or closed (like mine in 2009), the All-in-one mortgage seemed to be a pretty stable access to cash, if needed.

One last thing is that it is connected to a checking account that automatically drafts to the loan nightly.  The intent is to take all your miscellaneous accounts and funnel them there to have your money working for you rather sitting in non-interest paying accounts(circa 2019). Money can easily be transferred back to the checking for upcoming expenses.

I ended up going direct with Merchant bank out of Indiana and saved significant closing costs over a broker initiated quote.