If you happen to be a homeowner, chances are you’ve already heard about the velocity banking strategy. Whereas some people view it as the perfect way to pay off their mortgage hassle-free, others term it to be a scam. Well, you can never judge something unless you understand what it is all about. In this article, we will take you through some of the things you need to know about velocity banking. Keep on reading to find out more. =
What is Velocity Banking?
Before going any further, you need to understand what velocity banking entails. To cut the long story short, it is a strategy where you get to use your line of credit as your primary account and pay off a loan in lump sums. The secret behind this strategy lies in using your cash flow and extra money to meet your expenses while at the same time paying off your mortgage hassle-free.
Your should, however, keep in mind that velocity banking mostly tends to utilize a Home Equity Line of Credit (HELOC). In fact, the HELOC serves as your primary expense account rather than a checking account. For this reason, there is no essence of having a savings account with you.
Does Velocity Banking Work?
Even though the principle of velocity banking happens to have a solid logic behind, you need to do the Math and figure out whether it is the most viable route to take. Keep in mind you are better off taking advantage of velocity banking if you fully understand what it is all about. One of the most important things to keep a close eye on is the interest savings as it keeps an open line of money available in the form of equity.
The Bottom Line
Velocity banking has more to offer than some people tend to think. If you are yet to take advantage of what it has to offer, then there is no better time to do so than now. Be sure to do your homework before you can finally jump to conclusions.
Lina Mark is the Partner and Editor-In-Chief at Keulj.us. She loves technology and is always hooked on new technology in the market. You will often find her browsing the web for interesting content (mostly sci-fi and tech). She is addicted to movies (mainly action) and loves to read interesting books every once in a while.