All Forum Posts by: James Johnson

Hello BiggerPockets,

Has anyone purchased a primary residence using a HELOC in lieu of a Conventional Mortgage? And if so, may you please share how you secured the HELOC?

Thanks

@Manuel Rocha

Did you end up going with this HELOC? I'm in South Florida as well and I am looking for the best HELOC lender.

@Matt Jones

Thank you for sharing Matt. The HELOC in 1st lien position will allow us to make large payments every single month as well by depositing our entire monthly net income of $15k towards the principle balance. Which will drastically drive down the principle but also drives down the interest as well because the interest is calculated on the average daily balance. The difference is that the HELOC is an open ended product which would allow us to retrieve our income at the end of the month to pay our normal living expenses. Literally allowing our income to actually work for us even while we are sleeping. It's a simple math equation where we are substituting our checking and savings account with the HELOC by placing our cash flow positive income towards our principle. We are debt free minus living expenses, so it's a perfect strategy for our situation. To me, it's just a different product to purchase a home, which seems to be way more efficient than a conventional mortgage.

@Cynthia Andersen, I am very interested in knowing how your scenario played out. I am in the process of purchasing a home and want to use a HELOC to purchase. I have been studying this concept for several months now and it totally makes sense to me. It's very difficult to change someone's way of thinking. "They only know what they know". Please let me know what you ultimately ended up doing.

Thank you,

James

@Luis Crespo, just saw this post and wanted to follow up and see how this worked out for you. I am purchasing a home and I am planning on purchasing with a HELOC as well. I have found a few lenders but would like to hear some success stories from others. Thanks

@Andrew Postell thanks for the feedback. What would you recommend as the most efficient and strategic way to purchase and payoff a home. I keep comparing the Conventional Mortgage method vs a HELOC in 1st Lien strategy and its night and day. A traditional mortgage doesn't seem to help or benefit the buyer. If anything, it seems to heavily favor the lender by stacking interest upfront. At least with the HELOC speed equity strategy it seems to provide the buyer with a simple method of drastically reducing principle and driving down interest at the same time. I've heard so many success stories of how this method has allowed buyers to pay off their homes in a fraction of the time. I know that everyone's situation is different but this really seems like it would work for my situation.

Thanks @Brent Markham. Yeah this is a new concept for me. I did get a chance to speak to local credit union and they assured me they could do 90% ltv HELOC for a $500k max on new construction home purchase. I am just trying to finder a lender that may be able to do a larger loan amount.

I am purchasing a New Construction home in South Florida that will be complete in August 2019. I have already been pre-approved for a Conventional 30 year Jumbo Mortgage but I am looking to attack and pay off this home quickly. I recently came across several "speed equity" articles that share getting a HELOC in 1st Lien in lieu of the Conventional Mortgage. I am trying to find a lender that can do the higher amount, most lenders do a max of $500k. Please share if you know of any lenders.

Thanks