My feel is that – as with all things – discipline is the key. The main idea is the company wants to sell its proprietary software at inflated prices and capitalize on a down market. That being a given…
Example:
If I have a 300,000 dollar mortgage and I net 5,000 dollars a month and have fixed expenses of 4,000 dollars per month. My discretionary income is 1,000 per month. I either have or open a HELOC. Month 1: I make a lump sum payment to principal of say 3,000 dollars. Now my HELOC balance is 6,500 dollars (Lump sum payment + cost of software 3,500! – outrageous I know). I then deposit my total income (5,000) as a payment to the HELOC – now the HELOC balance is 1,000 – this is the amount I owe and additional payment towards – but everything else is paid. Month 2 (this schedule is for example purposes only) I don’t make additional payments to principal I just draw fixed expenses from the HELOC and deposit my income as payment to the HELOC. Month 3 I make additional payment to principal of 2,000 dollars. So the idea is without any change to my current standard of living I can rapidly pay down my mortgage – and the overpriced software holds-my-hand through the whole process.
Upon hearing this concept which on the face seemed to the skeptic in me said too good to be true…why wouldn’t this be more widely used? The company says banks don’t what you to know – but that’s what I expect them to say –us against the banks.
