Well, I'm just a real estate agent but I was talking with a mortgage guy yesterday who is beginning to use a program/loan called Homeonwer Equity Accelerator. I am NOT a numbers person, which is why I am an agent and not a lender. BUT this loan program does get me thinking. Basically, the premise is to pay down your mortgage quickly. No, it's not the pay-every-two-weeks thing, either, although the idea is sort of similar.
You basically have to qualify with credit score and either 10% or 20% down and have a relatively good head on your shoulders to not go out and buy stuff like crazy but actually want to pay down your 30-year mortgage in much less time. It works like an 80/10/10; first mortgage, second mortgage, and 10% down. The second mortgage is a traditional home equity line of credit. No real big difference than what other stuff is out there right now. The clincher is that you basically have a line of credit for your first mortgage, too, but it is classified as a mortgage on your credit record. You put all of your income into it when you get paid, which significantly lowers your interest that is calculated on a daily basis, then pay out your bills regularly throughout the month.
It's a little hard (I mean a LOT) hard to describe--you'd have to see it the way it was shown to me. But, this type of loan has definite possibilities. Purchases & re-finances. Plus, you can wipe out a lot of interest early on during the first mortgage, so it can cut the mortgage down to 12-15 years, depending on your situation.
So, anyone out there currently doing this and what has been your experience with it?
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