Looking for 1st Lein HELOC Bank or FCU

2 Replies

There are several programs that offer buy-in educational programs that offer a financial method to pay your home/rental property mortgages faster by replacing your 1st mortgage (compound interest) with a 1st Lein HELOC (simple interest) that is linked with a checking account.

Once you finance your home or rental property with the 1st Lein HELOC loan ($100,000), you have all your monthly personal/business/rents paid types of income ($15,000/month) deposited into the checking account that's linked to this 1st Lein HELOC. Once your monthly income is deposited, then your 1st Lein HELOC balance drops to $85,000. So all your income is applied to the reduce your loan balance - No idle money.

But, of course, you do need money to live on. So your monthly expenses (utilities, groceries, etc.) and spending money ($5,000) are withdrawn with said checking account (via debit card/checks). If all your monthly expenses were $5,000, then your ending 1st Lein HELOC balance would show at $90,000.

I hope I'm understanding/describing this accurately? 

But the bottom line question is that I have is which banks or FCU's offer this type of 1st Lein HELOC (w/Checking acct) ??? Perhaps either an online type of bank or ones specifically in Indiana?

There have been many discussions about this here.....use the search function.
But, the idea is Not to replace your mtg with the heloc.....you get one in addition to your mtg. and use your extra money to pay down the heloc after you borrow from the heloc to make extra payment to your mtg.

Just skip all this crap and make extra payments to your mtg....in your example an extra $10k/mo.....same result.

@David Jones I have heard about this strategy before. I have not researched it fully but every time I hear someone describing it the strategy just does not appear to be sound advice. Two of the common areas of concern for HELOCs I see out there is the 10 year maturity date and the adjustable rate. Since HELOCs have adjustable rates they will often catch people off guard when they adjust. With rates moving higher, it is likely that your rate will increase in the future. The 10 year maturity date is where the HELOC will modify into a different product all together. Meaning after opening the HELOC for 10 years it will cease to be a HELOC. It will "mature" into a 20 year fixed rate mortgage that you can no longer draw on. And when it does mature the rate will increase. I've seen typical numbers of 1%-2% higher than your current rate.

So unless there is something I am completely missing I don't subscribe to using a HELOC for anything long term. They are terrific products if you can pay it back quickly. That's why flippers like them so much. They use it, pay it back. Use it again, pay it back. So the adjustable rate doesn't matter to them. Long term financing though can be very challenging with rates increasing.

Feel free to tag me with any additional questions.  Thanks!