The first step of Mortgage Cycling is to secure a line of credit. Many people already have a line of credit tied to the equity in their home, called a Home Equity Line of Credit (HELOC). If you’re in this position, this is great. You’re ahead of the pack and you can start your Mortgage Credit Cycling plan right away.
I also understand that others may have no equity in their homes or have maxed out their home equity This is fine. Securing a line of credit isn’t as hard as it seems so don’t be intimidated. You can also use Mortgage Cycling to pay off your existing, maxed-out home equity credit line.
If the latter scenario sounds like your situation then you’ll need to find a bank that will open up a personal line of credit for you. There are dozens of organizations out there that offer credit lines to consumers. Try your own bank first. They know you and your history. If they won’t play ball, then go online. Some websites will allow you to apply for lines of credit at several lending institutions at once. Some lenders specialize in loans to people with less-than-perfect credit. If you are having difficulty finding a lender to grant you a line of credit, you may consider one of these. The drawback for most people with low credit is that you will be charged a higher interest rate. Be careful with this situation. As I highly recommend not using a cycling plan unless you can obtain a line of credit which is lower than your existing mortgage rate. The interest rate on your line of credit must be lower than your current mortgage rate in order for the cycling plan to work properly.
If you are unable to secure a credit line due to a low credit score, you’re going to have to wait until you can build your credit score to use this plan. Depending upon your credit score at this moment, it could take up to seven years to regain good standing. This is the worst case scenario. This doesn’t mean you should disregard this report or discontinue learning how to cycle. Instead, this should give you extra incentive to start building your credit back to acceptable levels.
Learn Mortgage Cycling now even if you can’t immediately put it to use. You’ll gain valuable insight into money management techniques that can make a huge impact on your financial success in the future.
Don’t worry if this seems confusing or daunting at first. This report will take you step by step through the entire process.
If you determine that obtaining a line of credit doesn’t fit your budget or lifestyle, don’t stop reading this information. I’ve developed an alternative to using a line of credit by replacing it with a cash savings instead. This method works just as well if not better. However, in order to accomplish a reduction of your mortgage you must understand the base principal behind Mortgage Cycling first. I’ll explain this alternative method in a later chapter.
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