Different ways to calculate how much you pay in Interest

Interest Paid When Investing Your Money

Simple Interest as an Investor

Compount Interest as an Investor

VS

Interest Paid When Borrowing Money

Interest Paid Credit Card

Compound Interest Amortization

"Understanding the Theoretical Basis of Amortization: Formulas Explained in a Step-by-Step Guide"

Simple Interest Vs Compound Interest. Which one pays off a house the fastest

To illustrate the difference between compound interest in the context of an investment (such as in the case of a savings account or an investment in the stock market) and The context of a loan (such as a mortgage)

"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. 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."

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

MORTGAGE ORIGINAL INTEREST PAID IF YOU NOT USE ANY STRATEGIC

MORTGAGE INTEREST PAID WITH ONE TIME PAYMENT OF () TO THE MORTGAGE

THIS IS THE AMOUNT OF MONEY THAT YOU NEED IF YOU GET A HELOC

TOTAL BALANCE

TOTAL TIME

TOTAL BALANCE

TOTAL TIME

HELOC TOTAL BALANCE

$2,000 + $fees $0

HELOC TOTAL TIME

Mortage Original

Mortgage Interest Paid

Using a Heloc

Mortgage Interest Paid ONE TIME Payment of

Difference

Interest Gain

Heloc

Heloc Cost

Profit or Loss

INTEREST SAVED IF YOU GET A HELOC AND PAY AN EXTRA MONTHLY TO THE PRINCIPAL OF THE HELOC (putting the Heloc amount as One Time to the mortgage)

MORTGAGE ORIGINAL INTEREST PAID IF YOU NOT USE ANY STRATEGIC

MORTGAGE INTEREST PAID WITH ONE TIME PAYMENT OF () TO THE MORTGAGE

THIS IS THE AMOUNT OF MONEY THAT YOU NEED IF YOU GET A HELOC

TOTAL BALANCE

TOTAL TIME

TOTAL BALANCE

TOTAL TIME

HELOC TOTAL BALANCE

$2,000 + $fees $0

HELOC TOTAL TIME

Mortage Original

Mortgage Interest Paid

Using a Heloc

Mortgage Interest Paid ONE TIME Payment of

Difference

Interest Gain

Heloc

Heloc Cost

Profit or Loss

INTEREST SAVED IF YOU DON'T USE THE HELOC; INSTEAD, APPLY THE MONEY SPENT TO GET THE ORIGINAL HELOC BY MAKING PAYMENTS TO THE PRINCIPAL OF THE MORTGAGE.

MORTGAGE ORIGINAL INTEREST PAID IF YOU NOT USE ANY STRATEGIC

MORTGAGE INTEREST PAID, SAME AMOUNT THAT YOU ARE USING TO PAY OFF THE HELOC

TOTAL BALANCE

Mortage Original

Mortgage Interest Paid

Monthly Extra Payment

Mortgage Interest Paid with Extra Payment

Saving

Interest Gain

Amount Needed

Save

Amount Needed

INTEREST SAVED IF YOU DON'T USE THE HELOC; INSTEAD, APPLY THE MONEY SPENT TO GET THE HELOC WITH EXTRA PAYMENTS BY MAKING PAYMENTS TO THE PRINCIPAL OF THE MORTGAGE.

MORTGAGE ORIGINAL INTEREST PAID IF YOU NOT USE ANY STRATEGIC

MORTGAGE INTEREST PAID, SAME AMOUNT THAT YOU ARE USING TO PAY OFF THE HELOC

TOTAL BALANCE

Mortage Original

Mortgage Interest Paid

Monthly Extra Payment

Mortgage Interest Paid with Extra Payment

Saving

Interest Gain

Amount Needed

Save

Amount Needed

Ganador

Perdedor

Winner

Heloc Original

Adding extra to the Principal

Winner

Mortgage Interest Paid ONE TIME Payment of

Mortgage Interest Paid With an Extra Payment of a mounth until we spend the save amount that you use to get the HELOC

Mortgage Interest Paid ONE TIME Payment vs Extra Payment

Extra money needed earlier in order to save Interest

Amount needed in order to save Interest

Mortgage 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

Mortgage Interest Paid With an Extra Payment of a mounth until we spend the save amount that you use to get the HELOC

Mortgage Interest Paid ONE TIME Payment vs Extra Payment

Extra money needed earlier in order to save Interest

Amount needed in order to save Interest

Mortgage Total Time

The Best Options is:

Interest Saving

Amount Needed

Time

conclusiones

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?"

To give an answer as to how much HELOC is, two things need to be taken into account:

1- In the case of being able to request a HELOC for the amount of the loan that remains what would be the ideal amount to put into the principal of the current mortgage.

2- In the event that the maximum amount of HELOC that the bank gives me is less than the amount remainder of the loan I have left on the mortgage to be able to determine what the ideal amount would be to put the principal of the current Mortgage.

If you could get a HELOC with the same amount you owe the house, the ideal amount you would you You will use to put the principal of the mortgage would be: this It would generate savings of:

Mortage Original

Mortgage Interest Paid

Using a Heloc

Mortgage Interest Paid ONE TIME Payment of

Difference

Interest Gain

Heloc

Heloc Cost

Profit or Loss

These are two examples of how your savings would look if you put 5000 above and below the Ideal Amount to Bet to the principal of the mortgage on the house.

Mortage Original

Mortgage Interest Paid

Using a Heloc

Mortgage Interest Paid ONE TIME Payment of

Difference

Interest Gain

Heloc

Heloc Cost

Profit or Loss

Mortage Original

Mortgage Interest Paid

Using a Heloc

Mortgage Interest Paid ONE TIME Payment of

Difference

Interest Gain

Heloc

Heloc Cost

Profit or Loss

If you could get a HELOC with less you owe the house the ideal amount you would you You will use to put the principal of the mortgage would be: this It would generate savings of:

Mortage Original

Mortgage Interest Paid

Using a Heloc

Mortgage Interest Paid ONE TIME Payment of

Difference

Interest Gain

Heloc

Heloc Cost

Profit or Loss

These are two examples of how your savings would look if you put 5000 above and below the Ideal Amount to Bet to the principal of the mortgage on the house.

Mortage Original

Mortgage Interest Paid

Using a Heloc

Mortgage Interest Paid ONE TIME Payment of

Difference

Interest Gain

Heloc

Costo del Heloc

Profit or Loss

Mortage Original

Mortgage Interest Paid

Using a Heloc

Mortgage Interest Paid ONE TIME Payment of

Difference

Interest Gain

Heloc

Heloc Cost

Profit or Loss

Enter the HELOC or Credit Line Information to Compare

HELOC Balance

Period in Days

Annual Interest Rate from You credit Card(APR)

Annual/ Daily Rate Method

HELOC Pay of Time

HELOC Interest Paid

HELOC Total Balance Payment

Schedule

HELOC Without Extra Payment

HELOC with Extra Payment

#	Date	Beginning Balance	Minimun Payment	Principal	Interest	Cumulative Interest	End Balance

Enter fixed values that you could afford or spend each month for the duration of your line of credit

Annual/ Daily Rate Method

Months with 30 days

days

Options Advanced

Enter the Data of your Mortgage Information

Balance Remaining

Terms

Interest

Period

Start Loan Date

To determine the most efficient way to pay off your mortgage, input the additional amount you can pay towards the mortgage principal each month and the total amount you have borrowed from your HELOC. This approach helps simulate savings on interest and identifies the faster method to repay your home loan, factoring in your extra contributions.

Extra Payment

Every time a HELOC (Home Equity Line of Credit) is used to reduce the principal of a loan and save on interest, the strategy involves paying off the HELOC with all the income from your salary. At the same time, you use the HELOC to cover your personal needs. However, the most important point is to leave a surplus in the principal of the HELOC, rather than in a bank account, to pay off the HELOC more quickly and avoid paying more interest on it.

To make a fair comparison, we have created this section. This way, we can simulate what would happen if, instead of applying your salary surplus to the principal of the HELOC, you applied it to the principal of your mortgage. This helps us determine whether it's better to get a HELOC to pay off the mortgage faster or simply to make extra payments to the mortgage principal.

To decide which of the two options is better, we will use this section where you will enter any extra amount that you add monthly to the principal of your mortgage payment, and in another section, the amount you requested from the HELOC.

The idea is to simulate how much you would save on interest using each strategy and, at the same time, calculate how much more we need to contribute from our pocket to generate those savings. Additionally, the calculator will tell us which method allows us to pay off the house more quickly. By analyzing all these factors, the calculator will help us determine which is the best option, saving us a lot of money.

Closing Cost

Annual Fee

Extra Payment Monthly

Extra Payment Start Date

Schedule

#	Date	Beginning Balance	Minimun Payment	Principal	Interest	Cumulative Interest	End Balance

One Time Extra Payment

One Time Start Date

Minimun Pay

Time

Interest Total

Total Payment

Schedule

Original

Extra Payment

Extra Payment With Heloc Extra

One Time Payment

#	Date	Beginning Balance	Minimun Payment	Principal	Interest	Cumulative Interest	End Balance

Select the options

Original

Extra Payment

Extra Payment Heloc

One Time Payment

Payment
Date
Balance
Monthly Payment
Principal
Interest
Cumulative Interest
Time

Seccion Comparativa

Simple Interest

Compound Interest

Interest Card

Interest Amortizado

#	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.

Interest Savings:

A lower principal balance means less accrued interest, translating to significant savings.

Financial Flexibility:

A HELOC provides access to funds that you can use as needed, giving you control over how and when to reduce your debt. Steps to Get Started with Velocity Banking

Assess Your Financial Situation:

Before opening a HELOC, it's crucial to understand your monthly cash flow and ensure you can handle additional payments towards your mortgage without compromising essential expenses.

Obtain a HELOC:

Research and apply for a HELOC with a competitive interest rate. Make sure you understand the terms and conditions, including any closing costs and annual fees.

Plan Your Payments:

Use the HELOC to make significant payments toward your mortgage's principal. Then, direct your monthly income to repay the HELOC balance. Repeat this process to maximize the Velocity Banking effect.

Monitor and Adjust:

Keep track of your progress and adjust your strategy as needed. Financial situations can change, so it's important to remain flexible and adapt to new circumstances.

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 from the use of these tools and reliance on the provided results.