Obviously there is some turmoil in today's real estate market. Sub-prime lenders have given mortgage loans to a lot of folks who really couldn't afford the loan. And within a year or so, many of these individuals could not make their monthly payments and were eventually foreclosed upon. For many, the only option to lower a mortgage payment is to refinance to a lower interest rate. Unfortunately, in today's market, that isn't an option banks are affording many home owners. However, there is a certain type of homeowner for whom it is easier than one might think to substantially decrease ones mortgage payment. And oddly enough, this type of homeowner is the one with TWO mortgages. Specifically, a HELOC (Home Equity Line of Credit).HELOC owners have MUCH more freedom then they ever realize. The fact is, there are several simple ways that the average Joe can utilize to lower their HELOC bill. There are no programs to sign up for or services to pay. These methods are easy to implem
ent and can be initiated immediately! In this article I'll go through just a few, although there are several others.1. What is your HELOC balance? In other words, on how much money is your monthly HELOC bill calculated? Perhaps you already realize this, but your HELOC payment is calculated based on the account's average daily balance. For the vast majority of people, this balance only changes once a month: when you pay your bill. However, if you're making interest-only payments (as many do with HELOCs), then your monthly (and more importantly your average-daily) balance NEVER changes. This means you pay the same amount, month after month. However, if you could find a way to decrease the balance in your HELOC, then your average daily balance would also decrease, and your payment would be lower. So far this is all common sense. The higher your loan balance, the higher your monthly payment. Duh. Now comes the innovative method...How much money do you have in your checking/savin
gs account? Chances are good that it's more than you need for your monthly expenses. If this describes you, congratulations. You have just discovered the first (and perhaps easiest) way to decrease your HELOC payment. Here's what you do: take all the money that you don't need for monthly expenses, and put it into your HELOC. That's right. Clean out your savings account, leave just what you need for monthly expenses in the checking account, and dump it all into your HELOC. This does one extremely important thing: it decreases your average daily balance, and thus the amount on which your payment is calculated. In other words, you pay less each month!Now some may say, "wait a minute", why would I put all my money in my HELOC account? What if I end up needing that money for something?" That's the great thing about a HELOC, you can take money out WHENEVER YOU WANT. That means if you need a few thousand dollars extra one month to buy a new car, but you've put all your savings into
your HELOC, don't worry! All HELOCs come with checks and/or check cards, which you can use IN THE SAME WAY AS YOU WOULD A CHECKING ACCOUNT. You can deposit money or withdraw it WHENEVER YOU WANT.The take home here is this: put as much money as you can in your HELOC and let it sit there, offsetting finance (interest) charges. Okay, now for #2.2. Use a 0% interest credit card balance transfers.These things are literally FREE MONEY. Sign up for a 0% balance transfer credit card (you probably get these offers from time to time in the mail, if not http://www.creditcard.com is a great place to shop for one). Then transfer the balance of the credit card's limit (or whatever portion you want) to your HELOC account. The money will sit there, month after month (most of these 0% offers are for 16-18 months) offsetting interest and lowering your monthly payment.I myself have been using these and other equally simple methods for about 7 months now, and have lowered my payment over $165!
Each month I'm paying more than $165 LESS than I was 7 months ago. That's $165 more each month I can spend on taking my family out to eat, or putting into an investment, or buying toys!Like I said, there are several other equally simple (and effective) methods for you to decrease your HELOC mortgage payment. I've written them all down in great detail (as well as several creative uses for HELOCs you almost certainly aren't aware of). Visit my website to download them in pdf format: http://thepayground.com I promise you'll be glad you did!
View this post on my blog: http://www.mortgageloanus.org/how-to-decrease-your-mortgage-payment-by-hundreds-of-dollars/
ent and can be initiated immediately! In this article I'll go through just a few, although there are several others.1. What is your HELOC balance? In other words, on how much money is your monthly HELOC bill calculated? Perhaps you already realize this, but your HELOC payment is calculated based on the account's average daily balance. For the vast majority of people, this balance only changes once a month: when you pay your bill. However, if you're making interest-only payments (as many do with HELOCs), then your monthly (and more importantly your average-daily) balance NEVER changes. This means you pay the same amount, month after month. However, if you could find a way to decrease the balance in your HELOC, then your average daily balance would also decrease, and your payment would be lower. So far this is all common sense. The higher your loan balance, the higher your monthly payment. Duh. Now comes the innovative method...How much money do you have in your checking/savin
gs account? Chances are good that it's more than you need for your monthly expenses. If this describes you, congratulations. You have just discovered the first (and perhaps easiest) way to decrease your HELOC payment. Here's what you do: take all the money that you don't need for monthly expenses, and put it into your HELOC. That's right. Clean out your savings account, leave just what you need for monthly expenses in the checking account, and dump it all into your HELOC. This does one extremely important thing: it decreases your average daily balance, and thus the amount on which your payment is calculated. In other words, you pay less each month!Now some may say, "wait a minute", why would I put all my money in my HELOC account? What if I end up needing that money for something?" That's the great thing about a HELOC, you can take money out WHENEVER YOU WANT. That means if you need a few thousand dollars extra one month to buy a new car, but you've put all your savings into
your HELOC, don't worry! All HELOCs come with checks and/or check cards, which you can use IN THE SAME WAY AS YOU WOULD A CHECKING ACCOUNT. You can deposit money or withdraw it WHENEVER YOU WANT.The take home here is this: put as much money as you can in your HELOC and let it sit there, offsetting finance (interest) charges. Okay, now for #2.2. Use a 0% interest credit card balance transfers.These things are literally FREE MONEY. Sign up for a 0% balance transfer credit card (you probably get these offers from time to time in the mail, if not http://www.creditcard.com is a great place to shop for one). Then transfer the balance of the credit card's limit (or whatever portion you want) to your HELOC account. The money will sit there, month after month (most of these 0% offers are for 16-18 months) offsetting interest and lowering your monthly payment.I myself have been using these and other equally simple methods for about 7 months now, and have lowered my payment over $165!
Each month I'm paying more than $165 LESS than I was 7 months ago. That's $165 more each month I can spend on taking my family out to eat, or putting into an investment, or buying toys!Like I said, there are several other equally simple (and effective) methods for you to decrease your HELOC mortgage payment. I've written them all down in great detail (as well as several creative uses for HELOCs you almost certainly aren't aware of). Visit my website to download them in pdf format: http://thepayground.com I promise you'll be glad you did!
View this post on my blog: http://www.mortgageloanus.org/how-to-decrease-your-mortgage-payment-by-hundreds-of-dollars/
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