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Eight Steps to Setting Up Your Own Home Equity Line of Credit

Pay Off Your Home Quicker Infographic
What is the difference between a property that you pay $500,000 (capital and interest) and the same property when you pay $400,000 (capital and interest)? 

ABSOLUTELY NOTHING - IT IS THE SAME DARN PROPERTY!!

So based on your own real life figures that you inputted into our How To Pay Off Your Mortgage Quicker analysis and that you have a copy of IN YOUR POSSESSION RIGHT NOW

YOU WANT TO NOW GET GOING AND START SAVING MONEY STRESS AND HASSLE FREE

TODAY

A word of warning: 

There will be: 
  • bank managers
  • lending brokers
  • "experts"
  • 'friends' 
  • workmates
  • partners
  • spouses
  • social media
  • etc. 
all who will give you 
  • unsolicited "good" advice, 

  • free opinions,

  • words of caution

  • "unmitigated rubbish"

  • call it what you will
and tell you how you are doing the "wrong thing".

IGNORE THEM!

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You are just handling your own limited resources in a different fashion. You have a report in your hands now that shows on the average, you can pay your mortgage off in approximately half the time saving a comparable 50% on your mortgage interest expense. Now that you have done a bit of research and have educated yourself a bit, go back and run a new report. Let me emphasize that: You have a tangible plan in your possession that will potentially free up tens of thousands, even hundreds of thousands of your hard earned after~tax dollars by not having to pay over to the bank or mortgagor. This money you can use in whatever way you want to improve your lifestyle, educate your children, even build a solid investment portfolio.
Initially you will want to talk about what you are achieving. People will not believe you despite the evidence right in front of them. I have had people run to bank managers to ask them about HELOC. In a couple of cases, the bank manager has actually replied "The bank does not believe you can handle your own money so we take it away and do it for you." A demeaning attitude to say the least but what would you expect from "vampires guarding the blood bank"?
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When the bank manager asks you why you need two credit cards or want to double the limit on one or why you are enquiring on establishing a payment system where your income goes directly to your mortgage, remember it is a major world bank that has provided this information on how to pay things off. Remember it is your bank manager's job to maximise sales and profits for the bank - he is not working for you.  Your bank has no intention of or inclination to educating you on how to save money. How can the CEO of your bank stand up at the next annual general meeting and tell shareholders that he is educating clients on how to save up to fifty percent on their mortgage and thus will have to cut back on shareholders' dividends? Remember they have been ripping you off for years now - how can you trust them now?
I have sat down and taken loan managers through these principals and shown them the figures. They are totally stunned. But still one young loan manager said to me "I still have to sell what the bank tells me to sell. After all, they sign my commission cheque." Truer words were never spoken.
David SeamansAuthor
"Experts" will tell you that you will open yourself to "legal issues". They never explain these deep, dark bogey men and they never explain that you are even more invulnerable using the traditional mortgage. I can provide links to Youtube videos where a woman is screaming that your house is on the line using HELOC and she conveniently forgets that your house is on the line even more so in a traditional mortgage situation.

What is "Risk"?

Risk is defined as "being exposed to danger, loss or harm". The longer the duration of the exposure, the higher the risk. Specifically, liquidity risk which is probability of loss arising from a situation where there will not be enough cash and/or cash equivalents to meet the needs of the mortgagee.
Read more: http://www.businessdictionary.com/definition/liquidity-risk.html
By the definition above, the traditional home loan is more dangerous than HELOC by 40%. THE DECEPTION GETS WORSE BY THE MINUTE.
Friends are always full of "good advice" and "decent intentions". Show them your report with your real numbers in it and see if they support you. Or are they comfortable complaining about high interest rates and do nothing even when they see the proof? So much for good advice.  I always hope that once they see the results you are getting with little effort, they may just come around.  But then, maybe not ......

Keep Your HELOC Report and Your Mortgage Statement Handy At All Times

Watch how fast your mortgage is going down month by month - it is happening right in front of your eyes. Compare your statement to your Report to predict what will happen in the future.
Ask to see your detractors' mortgage statements and compare the difference.
But if you cannot ignore the nay-sayers and the voices in your head, you can always go back to the traditional mortgage - no problem. HELOC is not set in concrete - all you have to do is set up low interest generating savings accounts to direct your wages into, treat your mortgage payment and credit cards as bills that have to be met every month and enjoy the stress of making ends meet.
The eight steps to get your own HELOC in place are:
  • Review Existing / Get New Mortgage
  • Obtain two credit cards
  • Move current regular payments to credit card
  • Transfer balance of existing savings / chequing accounts against mortgage
  • Redirect regular receipts i.e. wages, dividends; into mortgage account
  • Set up automatic credit card redraw / manual reminder
  • Educate everyone on benefits of HELOC to encourage proper use
  • Establish on line system to keep balance of mortgage in front of subscribers
You may not get everything you want right away. Forget about loyalty to one bank - they have no loyalty to you. There will be situations where your belief will waver. When these situations arise, go back and run another How To Pay Your Mortgage Off Quicker Report and see the result. Never lose sight that you are coming close to knocking a third to a half of your mortgage off which could potentially be hundreds of thousands of dollars. So do not sweat the small stuff and be patient.
In the coming posts, we will discuss each step in detail providing tips, avoiding traps and giving you checklists to achieve each step.

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