Home Equity Mortgage
Is it possible to payoff your home mortgage with a line of credit?
My loan is for 30 years 75K. I was told that you can pay a lot faster with a line of credit. Has anyone done this and how? I do not think it was possible or beneficial economically. Me stay with my additional 300 to the beginning of each month.
Sad but nobody here knows what they are talking about. That's how it works. You have a HELOC to say only 75K 4% interest with a payment of $ 250.00 per month. Now let's say you have a rate of 6% right now which gives a payment of $ 450 per month. You save $ 200 a month and add to the extra $ 300 per month that will send its top. Here's the breakdown. On your current loan (with the numbers above) if you are paying $ 300 extra per month your loan will be repaid in 140 months (11.66 years) with a total of $ 29,252.87 paid in interest. If you take the savings of $ 200 per month and add that extra $ 300 totaling $ 500 and send it as an extra on the principle that a HELOC, you pay the loan in 123 months (10.25 years) and pay $ 16,383.83 in interest. The reason this works is because the loan interest only mortgage is the only thing that will recast (re-write off) if an additional payment is made at first. This means that every time you pay at the beginning of the month following the financial costs are based on the new loan amount minimum.
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