Hey everyone, I hope your day is going well.

Now, on to the final chapter of this series.

You may be looking at the description of this title and wonder if this is even possible. Did you know you can refinance your mortgage into a home equity line of credit (HELOC) with no money down? And you can pay it off in 5-7 years without raising your income. It’s true and we did it. In fact, we paid it off in 2.5 years due to a lower balance pay-off.

When I first heard of this concept, I was in disbelief. I’ve heard of refinancing your loan into a shorter term or a lower fixed rate, but never a HELOC. Until I did a little research. Let me share my story on this.

When my husband and I got out of consumer debt in 2016, I was ready to move. The only debt to our name was the mortgage. So we decided to start looking at homes for sale in different areas in our county. We already had a 3/2 bath home so we wanted to upgrade to 4/2.5 bath home. We didn’t really care too much if the house was upgraded because those were things we could do overtime.

As we looked at properties that fit our criteria, I was always hesitant in putting in an offer for a couple of reasons. First, if the seller accepted our offer that means I have little time to get our home ready for the market. Second, even with putting 20% down, our mortgage would be about $2500-$2900 a month when I never paid more than $1200 a month for my home. And lastly, I knew the amount of money we saved and invested monthly would go down drastically because of a higher mortgage and higher utility payments.

So after speaking with my husband and doing some self-evaluating, there was no urgency to move right away, we decided to stay in our current home just a little while longer. I looked into refinancing into a fixed 15-year mortgage from our previous 30-year loan, but the banks were asking about $3000 in closing costs. I didn’t think it was worth it so we declined. Then we looked into biweekly payments, but that option wasn’t appealing to us because we had to pay a fee for setting this up. So I continued to do my research. During this time, we were making extra payments to our principle balance. Read this post here for more information.

After some googling (is that a word?) and youtube videos, I stumbled across this site. I read everything on the site (from top to bottom and bottom to top), watched all the videos, researched if other people were doing it, and downloaded their free e-book. Even though I never heard of this method, it made total sense to us. We decided to take the plunge and replace our mortgage with a HELOC. We interviewed several banks and found one that gave us the best introductory interest rate. The risks to do this was minimal to none, all we were doing was refinancing our old mortgage into a HELOC and put it in first lien position. It’s basically like refinancing your mortgage into a big credit card called your equity. For me to write more details about the process of us doing this would be a disservice to you, it’s best to visit the site, www.replaceyourmortgage.com and speak with the owners of the company. The call is free and they will tell you if you are a good candidate for their program. I chose not to participate in this program because our mortgage balance was low and our equity was high, so the process was easy for me to get into. We ended up paying $800 in closing cost only because we were going to close the account before 3 years. But no closing cost is needed if you decide to keep the account longer.

So when we got approved for the HELOC, which took about 2-3 weeks, a check was sent to our mortgage company for the remaining balance and we were paying the line of credit off exponentially. The HELOC is open-ended so we used it as a checking account at first (using only my income) and when the balance was low to my standard, we just made extra payments on it like a mortgage.

Some things to consider if you want to tackle this approach to paying off your mortgage quicker- you must be disciplined. With a HELOC, you can draw money out like a credit card for unnecessary purchases. Don’t do it. Focus on paying down the balance. If you will have that temptation to buy cars and boats, then stick to a traditional mortgage and add extra to the principle.

Also, in order to be approved for this type of loan, your credit scores must be decent (650+), you must make more money than you spend, and make sure you don’t have any liens on your home. If all the boxes are checked, then I would encourage you to study this method. If I knew what I know now, I would have refinanced my mortgage into a HELOC several years back. It’s so simple to set-up and easy to manage.

The information for this is available to the public, it’s not some scheme or get rich tactic, it’s a mathematical method that will help you pay off your mortgage quicker than a traditional mortgage. Many wealthy and people overseas do this. We just have not been informed.

With this method, owning a bigger home is doable and we are confident that for our next home we can pay it off even quicker with rental income added to the mix.

I hope this post was of value to you. Applying all of the methods of getting rid of debt, adding 1K to the principal from time to time, living off one income, and refinancing into a HELOC helped us achieve financial independence from our mortgage. If we can do it, so can you!

Until next time.