How to pay off a 30 year home mortgage in 5 to 7 years. This is the most up to date version of our explanation on how you can pay off a 30-year mortgage in just 5 to 7 years on average. In the video, I will demonstrate how a banking strategy can be used to pay off a 30 year home mortgage in just 5-7 years without sending double payments, changing your current level of income, without refinancing, without loan modification, and without hurting your credit. Download Our FREE Strategy Calculator: https://chopmymortgage.com Key Parts: 0:00 Introduction 0:40 Disclaimer 0:54 Why is Your Mortgage Dangerous? 6:11 Why you should never Refinance!? 8:13 Intro to HELOC 8:32 HELOC vs Mortgage 11:19 Intro to Average Daily Interest 15:00 Intro to 1st Lien HELOC Strategy 22:52 Recession Impact on HELOC? 23:51 Free HELOC Calculator Download Disclaimer: I am not an attorney, accountant, or financial planner. This video is intended to be an educational video. This video should not be taken as financial, legal, and/or tax advice. Sam Kwak is a Certified Credit Counselor #11613. This is not a credit counseling session. I suggest that all viewers consult with professionals prior to implementing any or all parts of our strategy. RECAP OF THE VIDEO: I start this video with an explanation as to why a 30-year mortgage is like a trap for 21st-century homeowners. The reason being is that Americans (and Canadians) experience frequent life changes that cause them to move or they are eluded to refinancing because the refinance rates might be low. Unfortunately, such an event happens before 7-10 years into the mortgage. In the first 5-7 years, the vast majority of your mortgage payment goes straight to interest payment. A very small portion of your monthly payment actually goes to pay down the principal balance of the mortgage. Fortunately, there is a way to escape this. We’re going to introduce a new tool to help us with this called a Home Equity Line of Credit (HELOC) A HELOC is different than a traditional mortgage in several ways. The two main things to remember are (1) a HELOC is a revolving line of credit – which means you have the ability to pay back and re-use any available limit of the HELOC; and (2) a HELOC uses average daily interest calculation (simple interest) instead of an amortization interest calculation which is used by your 30-year mortgage. There’s a common myth out there saying that HELOC interest rates are always variable and higher. This isn’t true… There are HELOCs out there with fixed interests rate and some even have lower interest rates. Now, in 2021 – the best version of this strategy (in my opinion) is to use a 1st lien HELOC to completely replace your mortgage. By doing this, we now only have one debt against your home. No more 30 year amortized mortgage! Just a 1st lien HELOC. With the 1st lien HELOC, you’re now able to deposit all of your income (and event savings) into the HELOC balance to reduce the average daily balance – which ultimately means a lower interest amount you’ll pay on a daily basis. Doing this will keep the interest bill low while still being able to draw the funds out for expenses, emergencies, or even a rare investment opportunity. Now, you may have questions such as a.) couldn’t the banks freeze my HELOC? b.) are the banks still lending HELOCs? c.) how do you qualify for a HELOC? d.) What if I don’t have any equity? – I answer most of these questions on our other videos and free virtual classes that I offer. Be sure to download your free calculator to also attend our in-depth virtual class: https://chopmymortgage.com This strategy has many names such as: velocity banking, debt acceleration, mortgage acceleration, the “pill method”, or even the velocity method. Here at the Kwak Brothers, we call it: “Accelerated Banking Concept” or ABC for short.
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