One of the local news stations here does this segment called "Saving You Money" periodically and shows different tips on, well, you guessed it...saving you money! Last summer, I saw a story about a valet parker here in Vegas who his paying off his 30 year mortgage in 9 years! It's called the mortgage elimination system explained in a book by Harj Gill called "How to Own Your Home Years Sooner Without Making Extra Interest Payments" (long-ass title!) The anchorman, Jim Snyder, raved that there were other people in the studio testing out the system, and they loved it. He then had the author, Harj, as a guest, to explain the system. The news spread like wildfire and tons of people wanted more info and inundated the station with calls and emails. Needless to say, banks, mortgage brokers, etc. were not at all pleased with what this guy was teaching people...how to pay off their homes! A "cease and desist" order was put on Harj to try and make him shutup! The news station wasn't even allowed to talk about the program anymore!
Fortunately, I was able to get the email address of Harj and put myself on one of his mailing lists. About a month later he did a free seminar and taught people how his system worked, and I have to say...it's incredible! I can't possibly do the system justice by explaining it via blogging, but I'll try...
Basically, it's like this. You know how they say if you make one extra house payment a year you knock off five, six, maybe seven years off the back end of your mortgage? This is similar in that you're making extra principal payments. What you do is get a home equity line of credit (must be revolving, NOT a loan). Then, you borrow from the HELOC (I picked $5000 injections, you choose your own) and inject that in the principal of your mortgage. Then, every payday, you deposit your paychecks directly into your HELOC to eat up the interest. When your bills are due, you write checks of off your HELOC. (I use ONE credit card **that earns points!** for all my purchases and bills and thus only have to write one check a month). The extra money that usually sits in your checking account and doesn't earn any interest is now sitting in your HELOC eating up the interest! Now imagine if there are TWO of you depositing your paychecks into that HELOC every payday...that HELOC gets wiped away FAST and then you start the process over again.
I know this is hard to grasp by blog, so I highly recommend buying the book. You can find it on Amazon.com for $17.39 plus s&h. Also, Harj has a website: www.speedequity.com Check it out! I've taught a couple of friends from work how to do the system and they all agree, it works! What's even more interesting is when I'm talking about it to friends at work, some passerby inevitably hears me and says, "Oh yeah...I'm doing that, too!"
I just want to mention that there are software programs out there promising to teach you how to do a similar program for $3500! A friend of mine actually bought it and thinks it was worth every penny. No way! You don't need it! The book will teach you everything! On the speedequity website you can purchase membership with access to a software program that's pretty nifty for $199...but read the book first! (I have a membership to the website only because when Harj gave his seminar he promised all KVBC viewers free membership for one year).
I've knocked 13 months off my mortgage already (my loan matures August 2018...as of now, July 2017). If I continue to follow the program, I'll have my condo paid off within 3 years! If I chose to not do the program anymore, I just pay off the HELOC and quit borrowing from it. It's that simple.
Buy the book! If ya'll have any questions, I'm here to help!
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2 comments:
I guess I'm going to have to buy the book, and think about doing this for our next house. :) We've been making extra payments to principal on our house, originally by accident. While our loan is a fixed rate 30yr mortgage, the payment does change from time to time, to take into account changes in property tax rate, etc. So our payment increased for a while. We didn't notice when the mortgage company dropped it back down, and had been paying a little extra each month to principal as a result for about 6 months. Then we noticed what a nice effect it had on our principal balance, so we just started rounding up to the nearest thousand on our payment. So I'm all for paying off my mortgage early... just don't wanna tack any additional loans onto my current property, since we're trying to get rid of it. :)
Will this system still work with a variable income and a line of credit. I rent my home but do own my commercial building. I understand that HELOC's are being really hit right now. People are complaining that banks are freezing their HELOC's. So I was wondering if I could use a Personal Line of Credit instead? I am going to buy this book because everyone I have explained this too says that its just a shell game. I would appreciate any info you could give me though and I have a few more questions. I too was approached and am still being approached to buy the 3500 MMA thing. Thanks for your blog and info and your time.
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