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Does it Make Sense to Use a Home Equity Loan to Pay off a Mortgage?

By
Real Estate Agent with Group 46:10 Network @ eXp Realty AZ Lic# SA663942000

With the Federal Fund Rate dropping back down to near record lows, many people are asking if it makes any sense to try and leverage this rate to pay off their first mortgage. At first glance, my thought was that that Home Equity rates are too volatile to try and risk it, but after learning and understanding how money merge accounts work, it makes a lot of sense. Before you go out and get a Home Equity Loan to replace your first mortgage, you need to know that it is not advisable to use a Home Equity Loan in that manner.

So what should you do? Unless you are a math or computer whiz and can calculate daily interest up against paying down a mortgage and balancing your other debts, you will need software to do this. Even if you are a math or computer whiz, my guess is that your calculations just won't compete with the software that has been created and continually updated by a team of mortgage finance experts. I have looked at many of the companies out there that sell software to help you do this, and I settled on The Money Merge Account (MMA) by United First Financial after seeing one of their presentations. Until you see it, you may have trouble wrapping your traditional thinking around how it works.

Even better, U First's MMA Software can help you reduce your mortgage not only on you primary residence, but on a second home, or investment property. If you want to learn how to use a Home Equity Loan to pay off your primary mortgage in 1/3 to 1/2 of the time without refinancing, then you need to visit http://www.MortgageZapper.com or call me at 800-453-9290.

Comments(6)

Tony Grego, 317-663-4173 #1 Trade Association for Alternative Inv
REISA - 317-663-4173 - Indianapolis, IN

What goes down (with interest rates) will always go back up. Hence all of the 3 and 5 year adjustables that have come due and folks are losing homes.

If you can pay the balance short term (3 - 5 years) the answer is no. The feds are already talking about rate increases.

tony

Jul 07, 2008 10:37 AM
Anthony Kirlew
Group 46:10 Network @ eXp Realty - Gilbert, AZ
Helping You Make Fiscally Sound Real Estate Deals!

Tony, thanks for stopping by.  If you take a good look at how the Money Merge Account works, you will see that in most cases, it is a good move by the borrower.  Trust me, I was a skeptic until I saw the full deal myself becasue logically if you think of rates climbing, it doesn't make sense.  There is certainly more to it than just transfer of funds, such as paying down principal methodically.

I encourage you to take a good look at it because it is a produce you can share with your clients and as a lender, I can show you how you can make money by doing this even when the market is slow or a traditional refinance doesn't make sense for a client.

~ Anthony

 

Jul 07, 2008 10:42 AM
Lewis Poretz
Apex Home Loans - Annapolis, MD
Business Development Manager

hey man --- i think i know you??????

Jul 09, 2008 03:03 PM
Anthony Kirlew
Group 46:10 Network @ eXp Realty - Gilbert, AZ
Helping You Make Fiscally Sound Real Estate Deals!

Hey Lewis, yes it's me. It's been a while. I actually did some work with Bill's company in 2006 while I was launching my own company. Do you stay in touch with him?

Hope the East Coast market is treating you well.  I relocated to Arizona with my wife last year.

~ Anthony

 

Jul 10, 2008 09:01 AM
Thomas Hargreaves
TriStar Financial Services - Eugene, OR

I used to market the MMA, but found I could not qualify enough clients for the Heloc, now I use the Dream System

Aug 16, 2008 05:05 PM
Anthony Kirlew
Group 46:10 Network @ eXp Realty - Gilbert, AZ
Helping You Make Fiscally Sound Real Estate Deals!

Thomas, now customers don't need to qualify for a HELOC to use the MMA which makes it more accessible to those who cannot qualify for a HELOC. They have multiple ways to fund it, and it is a Godsend to many who are upside down in their homes as they can now re-build their equity using the MMA which in this market is much needed.

Aug 17, 2008 03:16 AM