Paying down principle fast using an open ended line of credit?

[Stuart Grazier]

Mortgage and lending professionals, 

I signed up for a program a few months ago that's basically a budgeting tool (kind of like Quickbooks online) that shows you how to use an open line of credit (like a credit card or a HELOC) to pay down your closed ended debt (like a car loan or mortgage) really fast by taking advantage of how the interest is calculated on an open line of credit (daily simple interest) verse a closed ended line of credit (30 year amortization). It doesn't really change your monthly budget, but takes advantage of the two types of debt, just like banks do, to help you pay down the principle on closed ended debt quickly so you aren't paying so much interest up front.

Is anyone else using this strategy, or teaching their clients how to do this? It seems like a no-brainer once I've learned the system, but I don't see or hear it being talked about a lot. Am I missing something? It seems like it would be a great way to pay down the debt on investment properties too! I'd love to hear your thoughts on it. 

[Stuart Grazier]

@Jason Shackleton Yep! I totally get that...and I am too. That said, the way I understand this program, you can do both - take advantage of low rates to lock in low payments, but then also use this strategy to force equity by paying down the principle faster by using the two different types of credit to maximize the paydown without changing  your budget. 

@Aaron Smith What program are you using to do this? I'm curious if it is the same one. Feel free to DM me if you're more comfortable with that. Also, I'm curious about your comment about having a bigger tax write-off...how so? Why are you having a bigger tax write off by paying down your principle? Because of your HELOC interest being paid?