@Rustico I agree one would be hard pressed to find a heloc that made this work out but it has potential based on the fact that the Heloc is working like a high yield checking account.
HELOCs don’t have a positive yield.. they have a cost. You get charged the interest… it is not paid to you. The interest rate charged on an HELOC is higher than a standard mortgage.
Depending upon the mortgage, most mortgages charge interest on the monthly balance (not biweekly or daily). There are some exceptions. no_such_reality covered how the HELOC works earlier. There are really two issues here; the ‘MMA method’ and the software that supposedly helps you at it. If you use the general technique of paying down the most expensive money(loan) first, you will come out ahead of what this program would do. All this software program does is identify the most expensive money.. for roughly $3500. Amortized over 15 years @ 8%, that is more than $11,000 (this amount is in addition to your other bills so it gets carried to the end). The definition of the most expensive money is the loan that is costing you the most in interest rates and fees, adjusting for taxes.
