Best HELOC to Pay Off Your Mortgage Faster

So you’re looking for the best HELOC to use for the Accelerated Banking strategy, right? Now, I COULD share bank names and the number to call but we already had certain banks send us legal notices not to use their trademark and name…. Plus, banks change their HELOC programs, features, and offering from time to time… So instead, I’m going to dive into the TOP things that the HELOC must have in order for you to use the strategy most effectively. Here it is... Best HELOC to Pay Off Your Mortgage Faster

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Number One, the HELOC must come with easy access to the funds. My favorite way is to be able to first link the HELOC to your checking account as overdraft protection.

You’ll also want access to the HELOC via the bank app so that you can transfer the funds back and forth from the checking account to the HELOC in a matter of seconds. It’s a matter of convenience.

You can also get access to checkbooks and actual plastic cards on HELOCs which give you more options. The more options you have, the better.

Now, I can’t continue without also talking about the option of the All-In-One loan which is a loan product that combines your standard checking account and a HELOC. Instead of it being two separate accounts, it’s just a single account which removes a lot of hassle.

Second, the HELOC must not have monthly draw limits. The exception is the State of Texas where the minimum draw requirement is $4,000. This means you can’t draw less than $4,000 at a time when using the HELOC. But, there are still ways around this and it won’t hinder the use of the strategy.

Another limitation you need to watch out for is limitations on how often you can withdraw the money out. There are some banks that won’t let you draw more than 10 times a month. Again, this won’t hinder the use of the strategy but it is a matter of inconvenience

Third, you’ll want HELOCs that don’t come with a long list of limitations on usage. Some of you may want to invest in real estate later down the road. Some banks do not want you to use the HELOC to buy other real estate but most don’t care as long as the bank gets their payments.

Bonus Tip: Be careful of large closing costs. Most HELOCs don’t require large closing costs. In fact, the only upfront cost (if there are any) would be the appraisal fee. This is a fee paid to the professional who is hired to determine the market value of the property. The banks need this to determine the LTV (loan to value) ratio so that they know exactly how much of a HELOC limit to give you. Typical appraisal cost can range anywhere between $500-$1000 depending on the size of your property. Some banks may even offer to pay this fee.

Notice how the interest rate is not a major factor when getting a HELOC for our strategy. Remember, our focus is on reducing the average daily balance and the principal balance of the line as fast as possible.