Anyone heard of "mortgage cycling"

[hazmat]

Anyone heard of \"mortgage cycling\"

I was searching the web for a mortgage calculator and came accross this

wisemortgageinfo.com Mortgage cycling

Looks like a scheme involving borrowing from Peter to pay Paul via a home equity loan. You're supposed to get some advantage by paying big lump sums early vs. a little extra a month.

I played around with some numbers in excel and couldn't come close to figuring out how you'd pay off a 30 year mortgage in 10 years w/o paying in major cash. Lump sums each year (or 5) did make a small difference vs. monthly - like paying off loan 6 years early vs 5...

Seems too good to be true (thus they aren't getting my money). Further googling didn't reveal any fraud warnings. Anybody know what this is all about?

 

[DannyD]

Re: Anyone heard of \"mortgage cycling\"

Sounds like a way to sell a book that anyone with common sense knows anyway, so HE gets to pay his mortgage off with your money!

Want to pay your house off early, pay additional principal each month. Divide your payment by 12, add that amount to your regular payment and pay it off 5 to 7 years early......depending on your rate, the smaller your rate the lessor the benefit of this

I have a 4.25%, make 10 year payments on a 15 year note, will be paid off in about 9 years, give or take a few months..........now, at this low rate, it does not make much of a difference, at his 7%, it would be more interest saved. I am not saving much, but I want my home paid for, out of debt, at least 10 years before retirement.

I used to do financial analysis also. A Texas Instruments, ba2 plus calculator will save you thousands, if you use it. I never let anyone else play the numbers with my money, I get the story straight, or it aint happenin'.

Know how to pay your credit cards off quicker, pay weekly, the interest stops on the money you send in, no matter how much or little, that way you pay less interest by paying on a lessor amount each week. Revolving interest is like a clock, it starts at 12 and adds each day, pay on the 7th and the clock starts over from there on less principal........balance at billing is 500.00, pay the bill, then pay 25.00 more on the 7th, you have now reduced the amount owed by 25.00 so you are charged interest on less money...............CC companies dont wnat you to know this

 

[yooperdave]

Re: Anyone heard of \"mortgage cycling\"

You pay interest based on the outstanding balance. The sooner you can reduce the balance, the less interest you will be paying over the life of the loan. Usually the duration of the loan is sooooo long that it will make a big difference to pay off as much as you can as soon as you can.

Yooper Dave