Can someone send me some info or even call me to help me learn about paycheck parking with a HELOC? I ask every single realtor and banker or lender that I come in contact with and they know nothing about it. I cant find any info on the internet either. Please send me any and all information possible. Send me a message and I will send you my contact info.
This is what I believe you're talking about. I had an outstanding HELOC for many years that's currently paid off. I handle my financed conventionally, so I deposit our paychecks, rent collections into our checking accounts and the average balances run $10K to $15K. I pay bills from it. I make monthly payments to the HELOC.
Alternatively, I can deposit all the cash as I receive them into the HELOC, and when I need cash, pay bills, like credit card bills, mortgages, it's paid from the HELOC, not my checking accounts. The checking account balances would be zero, and the HELOC average monthly balance would run $10K to $15K lower, by comparison, resulting in lower interest payments.
I thought about it over the years, and find it easier to handle finances, paying bills from my checking accounts. Its true that my HELOC would on the average run $15K lower, if I did it the other way, and with interest rates that ran me in the 6% neighborhood, more or less, over the years, I'll save about $1,000/year in interest, or round numbers $80/month. Back then, all HELOC interest is all deductible, so it's even less on a after tax dollar basis, like $50.00/month.
So it's a question of what $50/month is worth to me? But then, it could be argued that you'll be paying off principal faster. I do devote cash to principal payoff, so I don't see an issue of using checking accounts to pay bills.
Also, doing it my way, I preserve the open HELOC balance in the event of an emergency. Otherwise this reserve will be used for monthly bills if you're not careful.