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Straight Story: The regulators
Economics editor Chris Farrell
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About the author
Christopher Farrell is economics editor of Marketplace Money, a nationally syndicated one-hour weekly personal finance show produced by American Public Media.
Greetings, I want to turn my HELOC to a fixed rate, but none of the banks seem interested in giving good rates. I have a lovely home in a great neighborhood were values have held. My home is worth $800,000 by current market valuation. My 1st mortgage is at 5.0% fixed with $397,000 yet to pay. My HELOC floats but has been at 2.49% for some time and I expect it to stay there for another 6 months. (I'm not too worried about interest rates increasing, because I have a good Federal savings program, which will permit me to make a lump sum draw down one time only in about 2 years.) But my personal values and chemistry is to avoid debt all together. So is there any way I can lock in the HELOC and get on a track to pay that down in a 10-20 time frame? I do not want to refinance the first mortgage. Thanks for your help.
Richard
PS As further background, I am a Federal worker about 6 years from retirement. I am a disciplined saver who lives a thrifty life, but I have a growing, curious 6 year old and an litigious ex-wife. I want to get on a path so I can stay in my current residence because that is crucial to my son's access to good, affordable schooling and (eventually) college.
I have been hearing about an accelerated mortgage program offered by a mortgage company in Denver. Below is their description of the program. Can you review it and tell me what you think? A new mortgage comes to the United States, a different type of mortgage that allows the borrower the flexibility to manage his assets and liabilities. All of the borrowers hard earned money that may be sitting in a checking or savings account earning little or no interest, can now be used to reduce the amount of interest paid on their largest debt â?? their mortgage. Without changing any monthly spending habits or making extra monthly payments towards principal on your mortgage, this product will allow you to manage your cash flow like never before and pay off your mortgage. The premise of this loan is that borrowers finance the purchase of a home or refinance an existing loan with a 1st mortgage HELOC (home equity line of credit). Borrowers then begin directly depositing their monthly cash flow (direct deposit paychecks, income from other sources, etc.) in their mortgage account or HELOC. Monthly expenses, other than mortgage payments, are funded by draws against your available funds, just like a checking account, using auto bill paying, ATM withdrawals or a credit card tied to your account. The borrowerâ??s cash flow is then applied to reduce the principal of your mortgage on a daily basis which reduces the amount of interest you pay. The compounding effect of this product can easily knock 15 years off your mortgage, compared to the typical mortgage where interest is all paid up front in the first 15 years. This product will allow the borrower to lower their monthly mortgage payment every single monthâ?¦..thatâ??s right, lower their payment every month. Thanks, Charles King
