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Ever wonder how you may be able to pay off your #mortgage within 5-7 years (depending on your situation) without adding a single penny to your payment and not #refinancing? Sam Kwak is going to show you a strategy in how you can use a different method/instrument to pay off your mortgage quicker! This strategy is called the “Debt Free Acceleration” Strategy. This strategy has many other names such as “Velocity Banking”, “Mortgage Acceleration”, “Accelerated Debt Reduction”, “HELOC Strategy”, and more!
We first need to understand how mortgages work. In this strategy, we are using a Home Equity Line of Credit (HELOC) as a leverage to pay off the mortgage quicker and still maintaining our income and expenses as how they are. You can also use other instruments such as Business Line of Credit, Personal Line of Credit, or Credit Cards for the purpose of this strategy. The beautiful thing about this strategy is that it allows us to take an inefficient debt and convert it over to a much efficient debt.
The emphasis on this strategy is mainly on cash flow and principal balance reduction. The adage strategy of taking your hard earned money you earn and paying extra toward the principle is an old school strategy. While it works, the Debt Free Accelerator Strategy is a much more efficient way of paying off an amortized debt. This strategy will also work on Student loans, car loans, personal loans and so forth! Don’t let the banks trick you with their amortized products!!!
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DISCLAIMER: Sam Kwak is not a licensed mortgage broker, not real estate agent, not a Certified Financial Planner, not a licensed attorney, and not a Certified Public Accountant. Viewers will consult with their professionals prior to engaging in any financial strategies. Not everyone will experience 100% success rate with using this strategy. This strategy does require equity, a good standing with your current mortgage and the patience to use the strategy. The result of paying off your mortgage within 5-7 years is atypical but it represents a likely possible outcome for individuals who use this strategy. We (Novo Elite and DBA The Kwak Brothers) does not warrant a promise or a guarantee any specific outcomes and/or results from the use of this strategy.
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THIS IS THE OLDER VERSION OF OUR VIDEO!!! HERE IS THE NEW VERSION: https://youtu.be/3f-ebCjeH8o
This is a very funny idea that you can make money by making more debt. I'm a bit confuse about your strategy I will just continue with credit streamers mortgage plan I have just a few months remaining.
I would have liked to hear the comparison between the two rather than telling me your preference. Because, I don't know the agenda behind your video.
small detail how do you get home equity when you have zero equity in your home ? looks like a clowns juggling act to me just hammer the principal down each side of the mortgage renewal date.
This is a joke, right???? Taking on a second mortgage at a higher interest rate increases your debt. Didn't you know that a home equity line of credit is a credit card the size of your house!! Very Dumb. Just make bigger payments each month towards your mortgage and you will whittle away the life of your loan sooner. Swallow your pride and drive an ugly old car instead of having car payments. Whatever you have to do. This will free up extra money towards the principal on your house. Get a side job twice a week and put all of that income towards getting out of debt. Put all your tax refund into an extra payment. Lots of ways to do this. But never ever take on more debt to pay off your house.
4:59 Uhm, I was able to refinance at a lower rate and keep my same schedule of amortization ;didn't have to start over. Some people don't mind paying the extra mortgage interest though, I had a friend who (back when interest rates were double digits) would deduct his mortgage interest from taxes and got enough from his tax returns to pay his mortgage(P&I) for about 10 months.
Can you just pay off your principle?
Huh
So if you have 400k mortgage you need $100k proportionally , that will cost you additional 7k a year in heloc interest only .
the banks profit from you taking the life insurance,, by doubling up you mortage every month you will pay it off in half the time. we had a 160K and 11 years later were almost finished with paying it off, less than a year left. we dropped the life insurance off 3 years ago,, we pay 900 every 2 weeks,,and our interest rate is 2.75%
PRINCIPAL
He's saving on paper to pay for the Heloc lol
I currently have an offset account set up with an investment property with negative gearing. I’m thinking about selling my investment because it’s just not set up correctly to be self contained.
Do all banks offer this HELOC product ? I’m in Australia.
I want to get rid of my credit card and get this heloc method in future.
Does this work in New Zealand?
Why not just make additional principal payments to your mortgage when you have extra money? Same outcome.
I paid off my mortgage in 1 1/2 years… and I owed about $25,000 still on my home. I felt like I was halfway to retirement when I paid it off, and I was 37 years old at the time. My wife and I have been always middle-class, if not lower middle-class. Anyone can do it. Also, get rid of the credit cards.
junk
I've seen several videos on this. You guys seemed to copy each other. With this advice, people will fail like this. You NEVER pull all your HELOC at a time. You use this strategy but a little at a time. Otherwise you will trap yourself. If you only have $100 of discretionary income and your interest payment on the HELOC is $100 or more, you just locked yourself into an ever increasing debt. You are only supposed to use no more than a 1/3 of your HELOC. I would say not even that much at a time. Stay within $10k an no more of HELOC debt at a time unless you have a lot of discretionary income or have a strategy to open up more discretionary income. Start with small withdrawals and then work up as you see fit.
What would Dave Ramsey do
Thank you I have told my husband this for years, awesome
Right out of the gate, can't you even do the math on your simple freaking example ahead of shooting the video?????
$100k at 5% for 30 yrs is $537, you're short by 33% right out of the gate.
Folks if you borrowed $100k and want to pay it off in five years you're going to have to come up with at least 20k PLUS THE INTEREST EACH YEAR. There's just no two ways around it. But you probably borrowed a lot more than $100 k.
So let's say 200k. That's 40k not even factoring in interest. That's $3700 per month EVERY MONTH NO MONTHS OFF. In order to pay off the loan in five years.
PLUS INTEREST.
Can you swing that if you owe 200k?
No?
I'm shocked.
My suggestion: buy less house, buy less car, stop worrying about the fucking Joneses they hate you anyways.
If you are close to 4 or under 4% on a 30 just pay as much as you can to principal in addition to your monthly payment OR on your highest interest debt until it's zero then the next highest and then the next and stop living beyond your means. If you have to cut up your credit cards then do it.
Listen to Dave Ramsey and don’t do this junk. I’ve got 4 years left on a 9 year plan.
Quack bros is right
Moving $25k to a much higher rate of interest then paying it with all your income to gain a few days until you add back to the debt to pay your bills makes little sense. Why not take out only the amount to pay your bills on the HELOC, and skip taking the $25k, and use the funds to pay towards the mortgage?
"Principal is a noun and adjective with specialized meanings in finance and law but most commonly used to refer to someone in a position of authority or high prominence. Principle is only a noun and refers to a natural, moral, legal rule or standard. "
The more I see this video, the more I see it clearer.
Every mortgage lender offers heloc?
Bla Bla Bla! This takes 5 min not 25 to be explained! And on the end you’ve said nothing!
I am about 15 years into a 30 year mortgage
Will I be able to apply this to my current standing?
It is an interesting concept. I know that you struggled with spelling just a little bit. To save you some embarrassment or ridicule, please know that you are referring to paying a "principal", not a "principle" which is a moral construct that cannot be paid (unless you are paying attention).
Got it but I got a headache, I use a little different method but quite similar. Good credit have perks strive to get good credit.
Does it require money?…
Lots of BS filler in this video. Get to the point.
Pay full mortgage every week instead of every month. Easy.
Some HELOCs, however, require that the entire balance be repaid at the end of the draw period, so the borrower must refinance at that point.
P.S is that’s the common thing with HELOCs?
What about sheloc
If you apply your income tax and 2 extra pay days every year to just the principal, you can cut your 30 year mortgage in half. Simple as that!
this is simpleton crap