Yesterday I mentioned mortgage acceleration is hot – hot – hot, but the term “equity cycling” is not – not – not. The process still works: you can cycle your income and expenses through a HELOC to slash tens of thousands of dollars off your mortgage interest. I know, because I did it myself–long before I ever thought of going into mortgage acceleration to help others stop overpaying on their own home loans!
Over a two year period, I drew $5000 from a small HELOC four times. By applying it to the principal of my home mortgage, I canceled over $48,800 off the interest (for a total mortgage reduction of close to $70,000-besides the regular payments we made during that time).
Sure, there was some interest on the HELOC. And back then, our Home Equity Line of Credit interest was 8.25%, considerably higher than our mortgage interest. But because of the circulation process – cycling the money – our equity line interest was only $209.
HELOCs were still readily available when I named the company “Equity Cycling.” But not for long.
Fortunately, I was introduced to Shane Jackman, a gentleman who has been in the mortgage acceleration business for years! He’s fanatical about helping people, so imagine how thrilled I was when he joined our Equity Cycling mortgage acceleration team in the summer of 2009! The first couple times I heard Shane tell people they didn’t need a line of credit, I was concerned. How could people ‘cycle money through an equity account’ if they didn’t have an equity account?
Since then, he’s shown hundreds of people how to accomplish very similar results without a line of credit, or even with a self-funded line of credit. Though there is an advantage to using the bank’s money to cancel the bank’s interest charges, we’re excited about being one of the few mortgage acceleration companies that can help you save tens of thousands of dollars without an equity line. Our motto is: No HELOC? No problem!