All Forum Posts by: Joe Au

So there is no math support behind it? They make it sound like even you don't pay extra every month. The lower average daily balance will keep the interest low.

By the way, using line of credit will work for paying down other debts also. like auto loan, credit cards, etc...

Traditional mortgage have amortization schedule, so for the early years of the mortgage payment, a large chunk of it will be paid to the interest. If you keep paying the mortgage for 30 years, you will end up paying at least 2 homes. The solution to that is to keep the daily balance of the mortgage as low as possible. By using HELOC, you would withdrawal from it to pay down a portion of the mortgage. And you will deposit your whole income to the HELOC and you will withdrawal expenses from HELOC when needed. Since the income stays in HELOC for most of the time, the balance of it stays low and the interest will be low(based on average daily balance). You will repeat these steps once the HELOC balance is back to zero. If you google this topic i am sure you can find the detail of it.

I want to build equity with my primary home as soon as possible. And I came across a method using HELOC to reduce the interest paid to the mortgage. Does any one have experience with it?