How Can I Pay Off My Mortgage with a HELOC?

Here's what you need to do to pay off your mortgage quickly.

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How to Use a HELOC to Pay Off Your Mortgage

In our book, How to Pay Off Your Mortgage in 5 Years, Natali and I lay out exactly how to utilize a HELOC to attack the principle balance on your mortgage. Essentially, you should use the HELOC like a checking account and use it to pay a large chunk toward your principle balance every month. In some cases, banks will tell you that you cannot use a HELOC in this way. I’d recommend speaking to a supervisor. If they still prohibit it, you’ll have to instead write a monthly check (from your checking account). If you’re interested in this strategy, definitely check out our book!
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[SchnabelMcSchnabel]

"Amortized interest" is not a thing. Amortization is simply calculating a series of equal payments to pay off the loan over a specified period of time. It does NOT cause the loan to cost more than a HELOC. The ONLY (usually trivial) savings with this method come from "paycheck parking", but that saving is usually negated, and then some, by the higher HELOC interest rate. If you have extra cash each month, just pay directly on the mortgage. You'll come out ahead and without the risk and fees of a HELOC.

[PsychNurse.]

Question ❓Has heloc strategy changed over last 2 years? I'm selling my house for $240k as fixer upper. And considering purchasing New $415k . What strategy should I use? What's the formula? Should full resale money be used as down payment? Thanks 👍 in advance.

[yungkim]

I have little over Heloc should I use full amount or investment property? What do you recommend?

[annabraun]

Hi I have a question for you. Is it a good idea to take chuck's from a HELOC to pay off your mortgage even if the interest is higher than on the mortgage?

[graphicredesign]

@MorrisInvest
Is it more beneficial to take money out of your 401k as a loan, so that any interest you pay will be basically paying yourself back, rather than a bank? Then repeat after paying the loan back? That "seems" like it would help avoid any interest accumulated with a HELOC.

[deshantai]

What I’m not understanding is, just because you apply 10k to the mortgage you still have a monthly mortgage…so you apply 10k to your loan, then have you checks paying back the 10k loan. While paying back that loan are you still borrowing out the HELOC to make the normal monthly payments?

[daniellaalonso]

I missed Today’s webinar, will be there another one?

[margaretjeannemoore]

My roof is leaking and I’m thinking about getting a heloc for that and a few other home improvements. Want to sell in a few years. Have not other debt besides a car loan and my mortgage. Take care of my mom who is 91 for the past ten years. Live in DC metro but am really looking to get out. But don’t have a job yet even though I’ve been trying! Don’t know what do, thank you for your help

[lorrainefisher]

Can I use my equity to pay off the balance of my mortgage, without incurring more debt?

[Bold-Inspiration]

Hey there new subscriber here. So I have about 250k in equity but I only owe 60k. Does this strategy still work to pay off my mortgage if I get a HELOC for 60k? What do you suggest I do? Thanks.

[qcmgpps]

You CAN'T pay off your mortgage with a HELOC because you're just transferring the debt to the HELOC which is the new lean on the home.
You cant borrow your way out of debt.

[michaelb.]

Sounds like velocity banking which is a great concept.

[mytravls]

I have $468k on my mortgage. How do I use HELOC to pay some balance off? What happens to the remaining amount that doesn’t get paid? What’s the max can I borrow on HELOC? The .85% formula and I’m getting $75k for HELOC. So, if I deduct $468 (remaining mortgage - 75 (HELOC amount per .85% formula) = 393k. Now, with this math, I owe two loans. One is fixed my original and second variable my HELOC on $75K. Am I right?

[CaptainNippon]

Hi Morris, thank you for the wonderful video. I am looking to obtain a Heloc but there is still a lot of stuff that I still don't understand so hopefully you can help me with some of the questions.

Hypothetically speaking.

I have a 500k mortgage and I was given a Heloc for 200k with an interest rate of 5%. I immediately withdraw 50k from the Heloc and drop it into my mortgage, so now my mortgage is reduced to 450k. My HELOC balance is now 50k. So do I pay the monthly interest of 5% on the initial 200k + another interest on the 50k as well? And don't forget the interest on my 450k mortgage.

[Stevelevits]

mortgage only take bank account how can I use heloc to pay extra principle

[pete]

Great video.
So I am down for using HELOC to pay off mortgage. But HELOC offer I am getting right now is 8.99% APR while my mortgage is below 4%.
Would you advise doing that?
Perhaps, is there an excel calculator where I can plug and play with to see the result.

[HauseBBQ]

So when you pay the chunk of principal to the mortgage…won’t you still owe mortgage to that every month?

[SR-zjsm]

Can you please mention the name of the bank that accepting checking and direct deposited?

[SOLDbyYOU]

Final comment
1) I apologize for my typos in the following comments
2) without numbers this video is just words
3) with a real tool that shows the real numbers…. ( like a tedious but very functional excel spread sheet)… you can see the REAL value (in dollars and time) … or the straight up con job that a mortgage broker is trying to sell you.
4)
5) Words words words…. Are only valuable AFTER we see the numbers

[Finda]

Question: Should you do an HELOC through the same bank you have the Morgage with?