| Obviously there is some turmoil in today's real estate | | | | discovered the first (and perhaps easiest) way to |
| market. Sub-prime lenders have given mortgage loans | | | | decrease your HELOC payment. Here's what you do: |
| to a lot of folks who really couldn't afford the loan. | | | | take all the money that you don't need for monthly |
| And within a year or so, many of these individuals | | | | expenses, and put it into your HELOC. That's right. |
| could not make their monthly payments and were | | | | Clean out your savings account, leave just what you |
| eventually foreclosed upon. For many, the only option | | | | need for monthly expenses in the checking account, |
| to lower a mortgage payment is to refinance to a | | | | and dump it all into your HELOC. This does one |
| lower interest rate. Unfortunately, in today's market, | | | | extremely important thing: it decreases your average |
| that isn't an option banks are affording many home | | | | daily balance, and thus the amount on which your |
| owners. However, there is a certain type of | | | | payment is calculated. In other words, you pay less |
| homeowner for whom it is easier than one might | | | | each month! |
| think to substantially decrease ones mortgage | | | | Now some may say, "wait a minute", why would I |
| payment. And oddly enough, this type of homeowner | | | | put all my money in my HELOC account? What if I |
| is the one with TWO mortgages. Specifically, a | | | | end up needing that money for something?" That's |
| HELOC (Home Equity Line of Credit). | | | | the great thing about a HELOC, you can take money |
| HELOC owners have MUCH more freedom then they | | | | out WHENEVER YOU WANT. That means if you |
| ever realize. The fact is, there are several simple | | | | need a few thousand dollars extra one month to buy |
| ways that the average Joe can utilize to lower their | | | | a new car, but you've put all your savings into your |
| HELOC bill. There are no programs to sign up for or | | | | HELOC, don't worry! All HELOCs come with checks |
| services to pay. These methods are easy to | | | | and/or check cards, which you can use IN THE SAME |
| implement and can be initiated immediately! In this | | | | WAY AS YOU WOULD A CHECKING ACCOUNT. |
| article I'll go through just a few, although there are | | | | You can deposit money or withdraw it WHENEVER |
| several others. | | | | YOU WANT. |
| 1. What is your HELOC balance? In other words, on | | | | The take home here is this: put as much money as |
| how much money is your monthly HELOC bill | | | | you can in your HELOC and let it sit there, offsetting |
| calculated? Perhaps you already realize this, but your | | | | finance (interest) charges. Okay, now for #2. |
| HELOC payment is calculated based on the account's | | | | 2. Use a 0% interest credit card balance transfers. |
| average daily balance. For the vast majority of | | | | These things are literally FREE MONEY. Sign up for a |
| people, this balance only changes once a month: | | | | 0% balance transfer credit card (you probably get |
| when you pay your bill. However, if you're making | | | | these offers from time to time in the mail, if not is a |
| interest-only payments (as many do with HELOCs), | | | | great place to shop for one). Then transfer the |
| then your monthly (and more importantly your | | | | balance of the credit card's limit (or whatever portion |
| average-daily) balance NEVER changes. This means | | | | you want) to your HELOC account. The money will |
| you pay the same amount, month after month. | | | | sit there, month after month (most of these 0% |
| However, if you could find a way to decrease the | | | | offers are for 16-18 months) offsetting interest and |
| balance in your HELOC, then your average daily | | | | lowering your monthly payment. |
| balance would also decrease, and your payment | | | | I myself have been using these and other equally |
| would be lower. So far this is all common sense. The | | | | simple methods for about 7 months now, and have |
| higher your loan balance, the higher your monthly | | | | lowered my payment over $165! Each month I'm |
| payment. Duh. Now comes the innovative method... | | | | paying more than $165 LESS than I was 7 months |
| How much money do you have in your checking | | | | ago. That's $165 more each month I can spend on |
| savings account? Chances are good that it's more | | | | taking my family out to eat, or putting into an |
| than you need for your monthly expenses. If this | | | | investment, or buying toys! |
| describes you, congratulations. You have just | | | | |