More to Financial Security than Not Paying Interest

A friend sent me a link for You First Financial. (Look it up if you are interested, I won't give it to you because I think it is not in any one's best interest)

This link proposed setting up a Home Equity Line of Credit along side your first mortgage. By manipulating the $ in the Home Equity with your income and expenses they claim you can save thousands on your mortgages and pay off your debt quicker. Their fee is only $3500 which they show you never comes out of your pocket (but it is real money when it goes in their pocket and YOU do get to pay it back)

My first caution is that even if (and it is a big if) their method really works, it is dangerous to combine your assets and your debts. Their system takes 10 years to achieve. If anything unplanned happens in your life in the next 10 years where you cannot make scheduled payments, your house is at risk of foreclosure. When you put money into a debt, even a line of credit, you are not guaranteed you can take it back out.

You know if you prepay your amortized 1st mortgage, the next month your payment is still due in the same amount. You just have more equity in your home. If you miss a payment or if some other condition in your note on the home equity loan is not met, the note can be frozen from further withdrawls and amortized payments can be required.

I could pick apart their system or teach you how to do it yourself without paying them the $3500 but more importantly, your income needs to go into a bank account. When you have enough assets, get Money Market account that pays higher interest. When you earn interest or have some extra $ in the bank we can talk about another conservative investment so you can make payments should something bad happen in your life.

MMM