Using a Heloc

A home equity line of credit, HELOC, is “An open-ended line of credit extended to a homeowner that uses the borrower’s home as collateral. Once a maximum loan balance is established, the homeowner may draw on the line of credit at his or her discretion.  Using a HELOC in the place of your checking account is a very powerful strategy. Replacing your checking and savings accounts with a HELOC can help you totally eliminate all your debt and mortgage in a matter of few years.

The HELOC is used as a checking account. All of your income is deposited into it and all of your expenses are paid out of it.

Depositing your paycheck into the HELOC acts like a payment so you aren’t adding a monthly payment. The money left over at the end of the month gets sent to the mortgage. This sends a massive payment to your mortgage each month.

As the mortgage gets paid down the line of credit increases and you can use that line of credit for three things.

1. Make bigger payments on the mortgage (accelerate the pay off)

2. Draw money out to pay off other debt.

3. Draw money out to make or create investments.

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