All Forum Posts by: Joe Au

I worked with City Creek Mortgage with my properties twice, and they are pretty easy to work with. Great communication with them.

Is that mean it's today? How many people will be there on average? 

@Kammon Hiatt Thanks a lot!

Thanks for everyone's input. it's a great discussion.

I think "time" is a crucial element when you calculate interest. if you pay on the same day every month and make the same number of payments over 30 years given the interest rate is the same. Of course the total interest paid will be the same for both methods. However, if you are able to pay a chunk right now, rather than save the same amount six months later. It will create a big different. When paying down debt, time is not your friend.

@Account Closed With HELOC, if you monthly payment is $100, I heard you can withdrawal $100 from it and deposit it right back. And it would still count as the payment is made for the month. Is that true? Besides, your cash flow going into a HELOC have to be much greater than the payment anyways. Why would an interest only HELOC matter? Can the normal P&I HELOC works?

In order to do an apple to apple comparison, you will have to take out a first lien HELOC to replace the traditional mortgage. That way you won't have to pay the lump sum from HELOC and make the regular mortgage payment.

Let's say traditional mortgage of 100K @ 5%, the first's month payment will be $536.82 ([email protected][email protected]).

For HELOC, assume your income is deposited at the beginning of the month for $5K and withdrawal expenses($4,463.18) at the last day of the month. Your net payment to HELOC is still $536.82. But the interest is actually $404.04 due to a lower average daily balance.

here's the list of question when i am calling the credit union.

1. How do I access the fund? credit card, check, online transfer, etc...
2. Is there ABA routing number with the account? for direct deposit and bill pay.
3. what is the minimum draw requirement?
4. What is the average balance I am require to keep?
5. What is the draw period?
6. What are all the closing costs?
7. What is the introductory rate and period?
8. What is the margin?
9. What is the floor and ceiling? minimum and maximum rate?
10. What is the cancellation fee if close early? eg. selling the property
11. What is the annual fee, inactivity fee, check and atm card fee?
12. how many times can the limit be adjusted?

@Account Closed So what features in the HELOC you are looking for in order for it to work? You mentioned interest only LOC, why is that?

There are other threads on this topic: https://www.biggerpockets.com/forums/92/topics/500...

Thanks everyone!

Thank you for everyone's input, it's great to have a community to ask this type of question.

Let's look beyond the mortgage and compare the 2 ways to pay down debt.

1. deposit cashflow into check account and pay debt monthly when it's due.

2. replace the debt with line of credit, deposit cashflow to LOC and withdrawal expenses when needed

which way will cost less interest? in the business world, i doubt a company will "park" they cash in the bank earning nothing while paying their debt with interest. there has to be a smart way to pay down debt.