The purpose of this calculator is to help you determine where you can save more on interest and reduce the initial capital required to accelerate the payment of your mortgage, according to your current situation. This exercise involves analyzing and comparing two things: how much interest I will pay in total from today until I finish paying off my mortgage under the current conditions, and how much interest I would end up paying if I apply a 'velocity banking' strategy, such as taking out a HELOC (Home Equity Line of Credit) or making direct payments to the mortgage principal.
Historically, taking out a HELOC on the accumulated equity in your property has been considered the best way to pay off your mortgage faster and save on interest, often referred to as 'Velocity Banking'. However, although a HELOC can be effective in achieving these goals, it is not always the best option. Sometimes, simply making additional payments to the principal of your mortgage can result in significant savings without the need to explore more complex strategies that could have adverse effects.
This calculator is designed to allow you, by entering the details of your current mortgage and the information provided by your bank about the HELOC you could acquire, to compare and decide which is the best option for you: obtaining a HELOC or making direct payments to the principal of the house.
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Enter the Data of your HELOC
Select the Options
Entrada de Datos
Enter the Data of your Mortgage Information
Entrada de Datos
Resumen de los Pagos
MITOS O PREGUNTAS QUE PERSONAS TIENEN SOBRE LA COMPARACION ENTRE UNA HIPOTECA Y UN HELOC
Si utilizas un Heloc para pagar una Hipoteca donde el Heloc tiene las mismas condiciones que el Hipoteca terminarías pagando más intereses por usar el Heloc que si terminas de pagar tu Hipoteca.
EJEMPLO:
Para demostrar esta hipótesis usaremos un ejemplo donde tanto el Heloc como la Hipoteca tienen un Balance de: $300,000, un Interés de: 7% y un Tiempo de: 30 años. En la vida real la mayoria de las veces los intereses de los Heloc además de ser variables son mayores que los intereses de las Hipotecas por lo que cada vez que esto pase se pagaría más en interés por el Heloc que por la Hipoteca.
Resultados
Para un Heloc de $300,000 a 30 años con 7% de interes se pagaría $468,215.23
Para una Hipoteca de $300,000 a 30 años con 7% de interes se pagaría $418,526.69
Por lo que podemos concluir que si se utiliza un Heloc de $300,000 para pagar una Hipoteca de la misma cantidad se pagaria $49,688.54 más en intereses.
Heloc
Heloc 2
Mortgage
HELOC - MORTGAGE
HELOC - MORTGAGE
Datos Heloc
Datos Mortgage
Datos Heloc
Heloc
Mortgage
Comparison between using Heloc to lower interest on the mortgage once against use it several times.
This comparison shows us the difference in interest of the mortgage payment after using a HELOC to pay the mortgage.
Mortgage with Heloc has One Time Payment
Mortgage with Heloc has Multiple Time Payment
Graphic Section
Select the options
- No.
- Date
- Balance
- Monthly Payment
- Principal
- Interest
- Cumulative Interest
- Time
- No.
- Date
- Balance
- Monthly Payment
- Principal
- Interest
- Cumulative interest
- Time
BREAKDOWN
Heloc
| # | Date | Beginning Balance | Minimun Payment | Principal | Interest | Cumulative Interest | End Balance |
|---|
Mortgage
| # | Date | Beginning Balance | Minimun Payment | Principal | Interest | Cumulative Interest | End Balance |
|---|
BREAKDOWN ROI
| # | Date | Beginning Balance | Minimun Payment | Principal | Interest | Cumulative Interest | Remaining Interest | End Balance | Remaining Interest (NO EXTRA) | Inversion | Neto | ROI |
|---|
Retorno de la Inversion (ROI)
Otros analisis
Resultados
Selecciona las diferentes comparativas
VS
Analisis Mas Profundo
Ganancias Casa
| No | Año | Inversion | Ahorro Intereses | Ganancia | ROI |
|---|
S&P500
| No | Año | Inversion | Valor Futuro | Ganancia | ROI |
|---|
What is best for me?
Where do I save the most interest?
En este caso, no se puede reutilizar el HELOC debido a que este termina el FECHA y la hipoteca termina el FECHA. Por lo tanto, al no terminar de pagar tu HELOC antes que la hipoteca, no puedes reutilizarlo para volver a ponerlo en la misma. In this case, the HELOC cannot be reused because it ends on 05/14/2024 and the mortgage ends on 05/14/2024. Therefore, since you will not finish paying off your HELOC before the mortgage, you cannot reuse it to apply it to the same one.
PAYING EXTRA TO THE PRINCIPAL VS USING TO HELOC
Interest Saved if you get a HELOC to paid a MORTGAGE and you do not pay EXTRA MONEY to the PRINCIPAL of the HELOC Details
Mortgage Original
( From $0 to $0 )
$0( From $0 to $0 )
$0( From $0 to $0 )
$0MORTGAGE WITH ONE TIME PAYMENT OF () FROM THE HELOC TO THE MORTGAGE
( From $0 to $0 )
$0( From $0 to $0 )
$0( From $0 to $0 )
$0Mortgage Varios Heloc
( From $0 to $0 )
$0( From $0 to $0 )
$2,000 + $fees $0( From $0 to $0 )
$0Mortgage Interest Paid
$0Using a Heloc
Mortgage Interest Paid ONE TIME Payment of
$0Difference
Interest Gain
Heloc
Heloc Cost
Profit or Loss
Profit or Loss
Date
Time
Interest saved using a Heloc Only One Time as One Time Payment to the Mortgage Principal. For this example we most pay monthly extra to the Heloc Details
Mortgage Original
( From $0 to $0 )
$0( From $0 to $0 )
$0( From $0 to $0 )
$0MORTGAGE WITH ONE TIME PAYMENT OF () FROM THE HELOC TO THE MORTGAGE
( From $0 to $0 )
$0( From $0 to $0 )
$0( From $0 to $0 )
$0Mortgage Varios Heloc
( From $0 to $0 )
$0( From $0 to $0 )
$2,000 + $fees $0( From $0 to $0 )
$0Mortgage Interest Paid
$0Using a Heloc
Mortgage Interest Paid ONE TIME Payment of
$0Difference
Interest Gain
Heloc
Heloc Cost
Profit or Loss
Profit or Loss
Interest Savings from Not Using a HELOC: Instead, Apply the Funds You Would Have Spent on the Original HELOC (Without Making Extra Payments to Its Principal) to the Mortgage Principal. Details
Mortgage Original
( From $0 to $0 )
$0( From $0 to $0 )
$0( From $0 to $0 )
$0MORTGAGE WITH ONE TIME PAYMENT OF () FROM THE HELOC TO THE MORTGAGE
( From $0 to $0 )
$0( From $0 to $0 )
$0( From $0 to $0 )
$0Mortgage Interest Paid
$0Using a Heloc
Mortgage Interest Paid ONE TIME Payment of
$0Difference
Interest Gain
Heloc
Heloc Cost
Profit or Loss
Profit or Loss
Date
Time
Si comparas el 1 vs 3 el ahorro es de asd
Interest Savings from Not Using a HELOC: Instead, Apply the Funds You Would Have Spent on the Original HELOC, Plus the Money You Would Have Spent on Extra Payments to Its Principal, to the Mortgage Principal Details
Mortgage Original
( From $0 to $0 )
$0( From $0 to $0 )
$0( From $0 to $0 )
$0MORTGAGE WITH ONE TIME PAYMENT OF () FROM THE HELOC TO THE MORTGAGE
( From $0 to $0 )
$0( From $0 to $0 )
$0( From $0 to $0 )
$0Mortgage Interest Paid
$0Using a Heloc
Mortgage Interest Paid ONE TIME Payment of
$0Difference
Interest Gain
Heloc
Heloc Cost
Profit or Loss
Profit or Loss
Si comparas el 2 vs 4 el ahorro es de asd
Interest saved using a Heloc Multiple Times as One Time Payment to the Mortgage Principal Until the Mortgage is pay off. For this example we most pay monthly extra to the Heloc Details
Mortgage Original
Mortgage Varios Heloc
Mortage Original
Mortgage Interest Paid
0Monthly Extra Payment
Mortgage Interest Paid with multiple Heloc
0Saving
Interest Gain
0Amount Needed
0Profit or Loss
0Interest Savings from Not Using a multiple HELOC: Instead, Apply the Funds You Would Have Spent on the Original HELOC, Plus the Money You Would Have Spent on Extra Payments to Its Principal, to the Mortgage Principal Details
Mortgage Original
Mortgage Varios Heloc
Mortage Original
Mortgage Interest Paid
0Monthly Extra Payment
Mortgage Interest Paid with Extra Payment
0Saving
Interest Gain
0Amount Needed
0Profit or Loss
0Ganador
Perdedor
Winner
Heloc Original
Adding extra to the Principal
Winner
Mortgage Interest Paid ONE TIME Payment of
$0Mortgage Interest Paid With an Extra Payment of a mounth until we spend the save amount that you use to get the HELOC
$0Mortgage Interest Paid ONE TIME Payment vs Extra Payment
Extra money needed earlier in order to save Interest
$0Amount needed in order to save Interest
$0Amount needed in order to save Interest
Mortgage Total Time
$0Mortgage Total Time
$0Mortgage Total Time
Ganador
Perdedor
Winner
Heloc with Extra Payment to the Principal
Adding extra to the Principal
Winner
Mortgage Interest Paid ONE TIME Payment of
$0Mortgage Interest Paid With an Extra Payment of a mounth until we spend the save amount that you use to get the HELOC
$0Mortgage Interest Paid ONE TIME Payment vs Extra Payment
Extra money needed earlier in order to save Interest
$0Amount needed in order to save Interest
$0Amount needed in order to save Interest
Mortgage Total Time
$0Mortgage Total Time
$0Mortgage Total Time
The Best Options
Interest Saving
$0Gain vs Cost
$0Amount Needed
$0Time
conclusiones
Analysis of Savings vs. Monthly Payments Analysis
. Using the HELOC to pay off the mortgage faster by adding the monthly HELOC payment plus an additional .
. What would happen if I use the HELOC monthly payment plus an additional to pay down the principal of the mortgage instead?
With the tools mentioned earlier, you could verify that if you request a HELOC from the bank with the balance you owe on the property and put it towards the principal of the mortgage, you would end up paying more in interest on the HELOC, in addition to closing costs and fees that you would have to pay to acquire the HELOC. This could demonstrate that although obtaining a HELOC can reduce property interests, if the wrong amount is used to pay off the mortgage principal, you could end up paying more money in interest and fees than what you would have to pay with your current mortgage. On the other hand, if you use a very small HELOC balance, you might fail to save on interest when applying the velocity banking strategy.
That's why we've created this section where you'll be able to indicate the closest possible amount of the HELOC that you could use to maximize the amount of interest savings on the loan you currently have, saving you thousands of dollars on your current mortgage.
For a better understanding of how to use this form to save as much as possible on your current mortgage, call us at (702) 297-6053
Once you're seated with the bank to request the HELOC, a question that you or the banker will ask is, "For what amount do you wish to obtain a HELOC?"
I calculate to find the amount of Heloc to be requested in a bank to obtain the maximum interest savings when using Heloc to accelerate the payment of a Mortgage (Single Use without Making Extra Payments).
In this case we are going to give you a suggestion for each Heloc in which by putting a small monthly amount to the Heloc principal during the Interest Only period you could obtain great benefits in interest savings with respect to what you have at the moment.
In this case we are going to give you a suggestion for each Heloc in which putting a small amount monthly to Heloc principal during the Interest Only period you could Make big profits in interest savings with respect to what you have at the moment and also reuse the HELOC.
| # | Heloc Balance | Heloc Cost | Save | Interest | Options |
|---|
Summary
Taking into account the mortgage balance you initially entered of and the Heloc of , the system calculated that if you have an extra plus what you pay in interest for a Heloc of you could have a savings of . This savings comes from having used a Heloc with the respective values shown in the table.
| # | Heloc Balance | Heloc Cost | Save | Interest | Options |
|---|
Summary
After the system calculated that the amount of Heloc that you can save the most in interest, comparing it to the Heloc you initially introduced is the system also tells us that if you have an extra of plus what you pay in interest for a Heloc of you could have a savings of . This savings comes from having used a Heloc with the respective values shown in the table.
| # | Heloc Balance | Heloc Cost | Save | Interest | Options |
|---|
Recommended Higher Savings Option according to the Mortgage balance.
After the system calculated that the amount of Heloc that you can save the most in interest, taking into account the balance of the mortgage that you initially introduced is also the system tells us that if you have an extra of plus what you pay in interest for a Heloc of you could have a savings of . This savings comes from having used a Heloc with the respective values shown in the table.
Amortization Table
This table shows the distribution of payments on a mortgage or loan to over time, detailing how much of each payment goes toward principal and how much toward interest, plus the remaining balance after each payment.
| # | Balance | End Balance | Heloc Balance | Principal | Interest | Extra | Remaining Interest | Cumulative Interest |
|---|
In this case we are going to give you a suggestion in the case of what is extra to the principal of the Heloc is not enough so that the amount owed is Can pay in the interest-only period and that it can be reused so that it can be paid in the interest-only period. form by putting a small monthly extra amount to the Heloc principal during the period interest-only you could get great benefits in interest savings with respect to what you have right now.
Solo para quiarme y solo cuando el ahorro del cliente no cubra el mejor HELOC en solo interes
| # | Heloc Balance | Heloc Cost | Save | Interest | Options |
|---|
In this case we are going to give you a suggestion for each Heloc in which putting a small amount monthly to the Heloc principal during the interest-only period you could Make big profits in interest savings compared to what you have at the moment and In addition reuse the HELOC.
| # | Heloc Balance | Heloc Cost | Save | Interest | Options |
|---|
Summary
Taking into account the mortgage balance you initially entered of and the Heloc of , the system calculated that if you have an extra plus what you pay in interest for a Heloc of you could have a savings of . This savings comes from having used a Heloc with the respective values shown in the table.
| # | Heloc Balance | Heloc Cost | Save | Interest | Options |
|---|
Summary
After the system calculated that the amount of Heloc that you can save the most in interest, comparing it to the Heloc you initially introduced is the system also tells us that if you have an extra of plus what you pay in interest for a Heloc of you could have a savings of . This savings comes from having used a Heloc with the respective values shown in the table.
| # | Heloc Balance | Heloc Cost | Save | Interest | Options |
|---|
Recommended Higher Savings Option according to the balance of the Mortgage
After the system calculated that the amount of Heloc that you can save the most in interest, taking into account the balance of the mortgage that you initially introduced is also the system tells us that if you have an extra of plus what you pay in interest for a Heloc of you could have a savings of . This savings comes from having used a Heloc with the respective values shown in the table.
Amortization Table
This table shows the distribution of payments on a mortgage or loan to over time, detailing how much of each payment goes toward principal and how much toward interest, plus the remaining balance after each payment.
| # | Balance | End Balance | Heloc Balance | Principal | Interest | Extra | Remaining Interest | Cumulative Interest |
|---|
Seccion Comparativa
| # | Balance | Principal | Interest | Minimun Payment | Cumulative Interest | Balance End |
|---|
| # | Balance | Principal | Interest | Minimun Payment | Cumulative Interest | Balance End |
|---|
How Velocity Banking Can Transform Your Mortgage: A Beginner's Guide
Introduction
In the realm of personal finance, the term "Velocity Banking" has emerged as an innovative strategy for homeowners looking to pay off their mortgages faster and save significantly on interest. By utilizing a HELOC (Home Equity Line of Credit), individuals can leverage their home equity to reduce their mortgage's principal balance, dramatically altering the loan's duration and the total interest paid. But how exactly does it work, and where do you begin? This guide breaks down the basics of Velocity Banking to help you understand its potential and how it can be applied to your financial situation.What Is Velocity Banking?
Velocity Banking is a financial strategy involving using a HELOC to pay down a mortgage's principal balance faster than the standard amortization schedule allows. This can reduce the total amount of interest paid over the life of the mortgage. The key to success with Velocity Banking lies in effective cash flow management: using the available funds from a HELOC to make additional principal payments while managing daily expenses and strategically repaying the HELOC balance.Benefits of Using a HELOC for Your Mortgage
Reduced Payment Time: By decreasing the principal balance more rapidly, you shorten the duration of your mortgage, moving closer to financial freedom.Success Stories and Testimonials
Many homeowners have transformed their finances using Velocity Banking. For example, Juan and Maria managed to pay off their 30-year mortgage in just 22 years, saving over $30,000 in interest by consistently and diligently applying this strategy.Conclusion
Velocity Banking is a powerful tool for those looking to reduce their mortgage debt more quickly and save on interest. However, as with any financial strategy, it's essential to do your research, fully understand the risks and benefits, and consider if it's the right choice for your unique situation. With careful planning and financial discipline, Velocity Banking can be a path to greater financial freedom.Key Questions to Ask Your Bank to Choose the Best HELOC for Paying Off Your Home Faster Introduction
When it comes to using a HELOC (Home Equity Line of Credit) to accelerate your mortgage payments, choosing the right offer is crucial. A well-chosen HELOC can provide you with the financial flexibility and terms needed to maximize your payment strategy and achieve your financial goals sooner than anticipated. Before committing, ensure you ask the following essential questions to your bank or financial institution.1. What Is the Interest Rate and Is It Fixed or Variable?
The interest rate will determine how much you will pay over time for the money you use. Fixed rates offer predictability, while variable rates may offer lower initial rates but with the risk of increasing over time. Understanding this aspect will help you calculate potential costs and decide which aligns best with your financial situation and goals.2. Is There a Draw Period, and How Does It Work?
The draw period is the phase during which you can access the HELOC funds. It’s vital to understand how long this period lasts, how you can access the funds (e.g., through special checks or online transfers), and what options you have once the draw period concludes.3. What Are the Associated Fees and Charges?
HELOCs can come with a variety of charges, including closing costs, annual fees, and transaction fees. Asking about all associated fees will help you avoid surprises and calculate the total cost of the HELOC. Don't forget to inquire about potential penalties for early repayment or charges for inactivity.4. How Are HELOC Payments Calculated During and After the Draw Period?
It’s important to understand how your payments will be calculated, both during the draw period (when you might have the option to pay interest only) and afterwards (when you might start paying both principal and interest). This will aid in planning your cash flow and payment strategies.5. What Is the Maximum Credit Limit and How Is It Determined?
The credit limit of a HELOC is based on the value of your home and the amount of equity you have in it. Knowing how your bank determines this limit will help you understand how much money you will be able to access for paying off your mortgage.6. Is There a Minimum Draw Requirement or a Minimum Balance That I Must Maintain?
Some HELOCs require that you withdraw a minimum amount each time you access your funds or that you maintain a minimum balance. These requirements can affect how and when you decide to use the available credit.7. How Will the HELOC Affect My Credit Score?
Opening a HELOC can influence your credit score in several ways. It’s important to ask how the initial inquiry and the ongoing use of the HELOC might impact your credit, especially if you plan to apply for other types of credit in the future.Conclusion
Selecting the right HELOC is a crucial step in maximizing this financial tool and speeding up your mortgage payments. Asking these questions will not only help you find the product that best suits your needs but also provide you with a clear understanding of the terms and conditions, ensuring your decision positively contributes to your financial health and long-term goals. Before signing, take your time to evaluate the answers, compare different offers, and consider how each HELOC aligns with your overall mortgage payment strategy. The right choice can save you thousands of dollars in interest and bring you much closer to full home ownership much faster than you might think.DISCLAIMER
Legal Disclaimer for Mortgage Calculators.
The purpose of the mortgage calculators provided on this website, operated by [Juan Carlos Carrera
Pena
Prof.
Corp.], is purely educational and is offered as a tool to help users gain a general understanding of
how
banks
may use amortization tables to make decisions related to mortgage loans, refinancing, and other
financial
situations involving amortization formulas.
These calculators are for informational purposes only and should not be used as the sole basis for
making
significant financial decisions. The results provided by these tools are approximate and are based
on
the
information and default parameters entered by the user. It is important to note that each bank may
apply
different variables and criteria in their calculations, which can result in significant differences
in
the final
terms and conditions of any offered financial product.
Therefore, [Juan Carlos Carrera Pena Prof. Corp.] and Juan Carlos Carrera assume no responsibility
for
any
decision or action taken by the user based on the information provided by these calculators. It is
strongly
recommended that before making any financial decision involving a significant amount of time and
money,
users
consult with a licensed banker or financial advisor to obtain personalized and specific advice
tailored
to their
particular situation.
By using these calculators, the user acknowledges and agrees that [Juan Carlos Carrera Pena Prof.
Corp.]
and
Juan Carlos Carrera will not be held responsible for any direct or indirect consequences arising
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