Depending on your credit history, you may be approved for a large line of credit or a smaller amount. If you’re unable to secure much credit, that’s not a big deal. What you need to do is use the credit line wisely.
The following is an overall view of the strategy. As you read further, the report will go into greater detail, thus allowing you to understand the cycling theory better.
Imagine that you get a line of credit with a $10,000 limit and your income is $3,600 a month. In this exercise, you use $6,000 of your credit line to pay towards your mortgage. This leaves $4,000 in reserve in your credit line. Use the reserve as a way to pay off unexpected expenses or emergencies so that you never have to worry about getting sidetracked or losing sight of your main goal. It is important you never use your reserve for impulse purchases. In fact, it’s advised that you never use this reserve money at all. You don’t need a home theater system. You need to get your mortgage paid off early! Don’t let yourself be tempted.
I do want to mention though…and make note of this because this is a major factor and advantage over traditional pre-payment plans. The reserve money in your line of credit plays a very important role in cycling because it supplies a buffer of security in case a financial emergency does arise.
If you tried to mimic the effects of cycling by just placing all your monthly surplus money directly against your mortgage principal then you would be left without any money to handle financial emergencies.
Once you have the credit line set up, choose one credit card that you will use to take care of your monthly bills and expenses (I’ll explain that process shortly). You do need to keep in mind that the card you use for these regular expenses must be paid in full every month. Don’t leave one dollar on the card or this strategy will not be effective.
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As you read this report, it’s important that you don’t become discouraged early on. Since the techniques require using credit to accomplish the goal many people automatically shy away because they’re unaware of how to utilize this credit to their advantage. It can seem intimidating. However, it’s those who are poor money-managers that are usually not disciplined enough to “play” or cycle credit to their advantage that feel this way.
If followed properly, this plan will give you the confidence, skill and knowledge needed to effectively manage your money. Thus, allowing you to accomplish your financial goals.
A lot of people don’t know this but it’s probably one of the most important things to know about large loans and the interest that is applied to these loans. In this country our loans are front-weighted. This means that you are required to pay off most of the interest during the beginning of the loan and then taper the interest amount paid off later on. So most of the money from your initial payments is going towards interest and not the actual amount borrowed, the principal.
In fact, even after paying 15 years on a 30-year mortgage, you will still owe approximately 90% of the principal. So, many people are surprised when they make a call to their lender after paying their mortgage for a few years and find out how much they still owe. I think most people believe they have a lot more equity built up in their homes than they really do.
Keep this in mind as a goal to overcome as you read on. Don’t get discouraged.
You may want to read this over a couple of times to fully understand how it works. Just remember the savings from the calculator (link on page 9). This is money that belongs to you. You owe it to yourself and your family to follow through with this program. Keep in mind your main goal: to get out from under the interest trap as quickly as possible. If you stay focused on this it will make your transition from the way you were used to handling your finances to this new way much easier. Besides, this new way will allow you much greater financial freedom in the long run.
Everything you are about to learn in this report is perfectly legal and quite simple to initiate.
Read on because you’re about to learn how mortgage cycling will not only produce results far greater than a bi-weekly plan, but will also teach you the power of credit and the important role it plays in financial success.
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