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Response to Bunnahabhain (Original post)

Tue Aug 13, 2013, 02:54 PM

20. I like the Australian System

http://activerain.com/blogsview/258297/what-is-an-australian-mortgage-
Basically:

1. A HELOC (ALOC) is acquired as a first on the subject property.
2. This HELOC will be used as your primary checking account, ATM and on-line bill pay account. In essence it replaces you current checking and savings account.
3. Your monthly income from paychecks, dividends etc is deposited directly into the HELOC which dramatically drives down the principal balance on your mortgage.
4. All your expenses, including bills, grocery shopping, entertainment etc is paid out of your mortgage. The longer the money stays in the account, the less interest that you pay on your principal balance. This uses the money that is currently sitting in your checking account, earning little or no interest, and keeps your loan balance lower.

With this concept, less of your income is going towards paying interest which leaves more money to pay down principal which pays off your home mortgage faster with no change in spending habits.
--
I was helping out with this product for a bit and it helped quite a few friends. I was doing this with United First Financial.

You really need discipline with this though, and if you don't have that, then forget it.

I think this should be built in with some mortgages. It helps out quite a bit, especially if you have a financial planner to show how you should pay and what to allocate for expenses.

Heck, I did that part as pro-bono at some points.
---
Still, they really have to fix things here first. The way mortgage companies have done things here, particularly the way they repackaged and bundled that debt is insane.

The mortgage system, in relation to the individual level, I don't think should change much. It is the behind the scenes that I have a problem with. The way they tied up the loans to the point that you have no idea who owns things is ridiculous.

It is also gouging the consumers since the new banks don't always adhere to the mortgage terms as signed initially.
That is why interest rates also go much higher at times.

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Bunnahabhain Aug 2013 OP
oldhippie Aug 2013 #1
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PoliticAverse Aug 2013 #56
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Adam051188 Aug 2013 #13
LineReply I like the Australian System
Xyzse Aug 2013 #20
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customerserviceguy Aug 2013 #40
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