"Also, if you send your discretionary income without the HELOC it's not the same! The whole point of this system is to use the banks money for years and years to pay down your 1st mortgage at LESS than the interest rate of your 1st mortgage."
This statement makes no sense. By using your discretionary income without running it through a line of credit, you pay NO interest whatsoever (not to mention the money paid for the program and the money paid to set up the line of credit). Zero interest is certainly less than whatever interest you pay on the line of credit. So if you simply send in your discretionary income without using the line of credit, you would put more money toward the mortgage principle, and thus further accelerate the pay off.
I went back and reran the numbers for the example given in the presentation. $200,000 at 6%. Four completely seperate online calculators agree that if you put $1000 extra per month toward that mortgage, the pay off time is 10 years 2 months. With the one time extra at the beginning of the loan of $5000, it goes down to 10 years. The software presented gave a payoff time of just over 11 years. Granted, a good portion of that one year's difference is due to the $3500 for United's software. But as you said Speed Equity's software will be a bit less than half that and the rest of the pay off time difference is due to the interest you are paying on the line of credit.
|