All Forum Posts by: Jeremy Z.

@Gary Floring

This statement is absolutely false. The interest rate in year one is not 74%. If you want to argue that a HELOC is a good tool for managing the process of making extra payments toward principle that is fine, but stop spreading misinformation in the process.

@Brian Cardwell

What rubs me the wrong way about how you and others pitch this method is the lack of transparency. You say you used this method to pay down your mortgage in 7 years, but you omit the fact that it was the thousands of extra dollars you put toward principle that really did it.

You're selling a jalopy and telling people it's the fastest car around, just because you drove it faster than most other drivers. You're neglecting to tell your customers that the other cars can be driven just as fast. At least that's my hunch!

I've read this thread too many times, Brian C. And you keep saying things like, "One has to love when those who don't understand something, bash it." I'm just clarifying that the people you are referring to have a better understanding of it then you do. And they don't bash the method, they bash people who spread misinformation about the method (like those who claim the ones who readily understand the math somehow don't understand it).

@Brian Cardwell

They do understand it, AND they can back up their understanding with the relevant arithmetic. There is no mystery here. You don't have to have first-hand experience using the HELOC "method" to know when your mortgage will be paid off - it is simple math. You can run the numbers for various interest rates and additional payment amounts toward principle and see exactly when the mortgage will be paid in full.

The people responding to you are saying that using a HELOC is unnecessary. It is the extra payments toward principle that pay down your mortgage faster, regardless of the method you use. Far too many people continue to parrot a myth that a mortgage is some type of debt trap, and that a HELOC somehow frees you from this debt trap. That is FALSE. If you start throwing a whole lot more money toward paying down your mortgage you will pay it off sooner, HELOC or no HELOC.

@Adam Harper

I had almost forgotten about this thread. Yeah, crazy story. Sounds like the guy has been a scammer on Kickstarter too.

http://cliqist.com/2017/04/25/now-maksym-pashanin/

@Jia Lin

Are the tenants still complaining of wet carpet? You may want to check and see if the condensate pump for the a/c unit is functioning properly. These pumps typically sit near the unit and collect and relocate condensation created by the a/c unit. I had one fail in my personal residence and also experienced soaking wet carpet. Took me a couple days to figure it out too! The base of the pump will probably be full of water if the unit failed.

I don't know for certain that all a/c units use a condensate pump, but it's something to consider. Especially if you recently had work done on it and your tenants suspect that the a/c is the culprit.

 This seems like a risky strategy for most people. A job loss could put a halt to their ability to transfer the debt to another 0% promotional offer, leaving them stuck making payments on a high-interest credit card. If you have the cash reserves to bail yourself out in this scenario then it might be worth the risk.

 I can see where Allen is confused. Your original math has an error:

"1st mortgage 150*.8 = 130k mortage"

80% LTV on a $150,000 = $120,000

Also, on a typical 30-year mortgage at around 5% interest the amount of principle paid down will be a fair amount less than $10K, assuming a typical BRRRR time frame. The principle would be paid down at around $2,000/year over the first few years of the loan.

Your points are still good, just wanted to clear up the math.

 Ha, I was waiting for you to go there. Typical.

I opened a savings account at my bank within the last year and the application asked if I bank with any other banks. If I said "yes", the application required me to give them the names of those banks (I assume for marketing purposes). The banker seriously couldn't submit the app without me giving that info, or lying and saying I don't bank with anyone else. They tried to blame that on Dodd-Frank too.

That's off-topic, but it really hacks me off so I decided to vent.

 Nice try.

I've got a better idea. Work with your industry to get their **** together so that a stupid typo doesn't hold up closing for three days.