All Forum Posts by: Brian Cardwell

This a great discussion. The fact that some challenge this method is great. This method absolutely works. I am living proof as I stated in an earlier post. 

 I have learned over the years, that there will always be those that do and those that don't or won't.

I think we all know the old saying "you can lead a horse to water but you can not make him drink.". I believe this to be true in this instance. Thanks @Dave Dachtera for explaining this and providing this information for all to explore. 17 or so years ago it was a real bear to find this info.Now it is right here for all to explore.

she is at about 50% loan to value .....just refi into a new conventional loan. She will pay a higher interest rate right away but after about a year she should be able to refi again to drop the interest rate if she works on her credit score over that year.

I plan my purchases. So I use my heloc to come up with down payments. I pull the amount of my down payment and put it in a checking account. I let it season for 90 days, then I purchase my next rental. After which I use my heloc to pay down my rental mortgage using what some call velocity banking.

Look at a HELOC as a credit card(revolving credit) secured by your home. The home equity loan is just another mortgage on your home. The HELOC usually has a minimum payment of just the interest that is owed for that month. The home equity loan has a payment based on the a full amortization table. Typically the minimum loan payment is both interest and principle payment.

No not correct . You can use a heloc as reserves but I would pull out the reserve amount and let it sit in an account for a few months. This will show the lender you don't need the reserves to run daily activities.

they want the money to show on the balance of the acct for two months. That seems to be the normal look back for bank acct balances. That shows you don't have that money in there temporarily. The underwriter wants to feel like that is truly extra monies.

In Maryland, you could just add your name to the deed and file it. Then refi and pull out the money to pay gma and then do what you want. I don't know the PA law. I would check in to this. If you can do this in PA then you don't have to worry about the gift tax or anything like that. Oh and when you do the refi just have gma removed from the deed. it's a clean transfer. It usually is only good for immediate family.

@Andrew Ware. 

When you use the extra money you may have, once you apply it to the principle the money is gone. (you dont have easy access). If you use the HELOC properly you will still have access to the extra money.

You can learn how to do this for free if you just ask and are open to learning something. It works and I have done it. I share it with any and all who will listen, But I dont charge any  one.

@David Dachtera  ....For the record i have used the heloc method to  pay off a 252k loan in 6years and 10 months.  I know it works. I think it is hard for those who dont fully understand how interest works on mortgages, to understand how this could possibly work.  The whole process works because one has to retrain themselves on how to move their money. It is a simple process but those who havent done it dont get it.