Mortgage Cycling – Brilliant or Risky

With mortgage rates hovering around 20-year lows, competition in mortgage industry is fierce. It seems like every day a new mortgage loan strategy comes out that is suppose to be best thing since sliced bread. Whether it's a mortgage with no closing costs or an interest only mortgage, everyone is claiming they can save you a ton of money. Now someone has come out with something called Mortgage Cycling. Mortgage Cycling could save you thousands of dollars or it could cost you your home.

Mortgage cycling is a program that advertises itself as a method to payoff your mortgage in 10 years or less without making biweekly mortgage payments or changing your current mortgage. Does mortgage cycling work as advertised? The answer is unequivocally yes – with a few caveats. I'm going to let you in on secret to mortgage cycling.

Mortgage cycling is based on making huge lump sum principal payments every 6-10 months. What this means is mortgage cycling works well for those who have at least a few hundred dollars in extra cash at end of each month. The problem is most people don't have that kind of cash available.

For most people, Mortgage Cycling relies on using a Home Equity Line of Credit to make huge lump sum payments against their original mortgage principal balance. When you take out a home equity line of credit, you pay for many of same expenses as when you financed your original mortgage such as an application fee, title search, appraisal, attorney fees, and points. You also may find most loans have large one-time upfront fees, others have closing costs, and some have continuing costs, such as annual fees. Home Equity Line of Credit interest rates are also higher than a typical mortgage loan interest rate.

THE SHADOW

THE ALCHEMIST by AL THOMAS THE SHADOW The Shadow knows. There used to be a radio program called The Shadow where hero, Lamont Cranston, Shadow, would overcome shadowy forces of doom by clouding vision of those around him. “Who knows what evil lurks in hearts of men” was their intro line. They were great shows and you can still find them on Internet. The stock market is kind of like shadow. As you walk along with sun at your back you cast a shadow. No matter which way you move shadow stays ahead. Fast, slow, right, left. It doesn’t make any difference. An equity market is shadow of economy staying out in front following every twist and turn. Depending upon height of sun shadow may be long or short. You can see it either as a long term or short term prediction of passage. If you did not know what a shadow was you would not realize it is telling you something about where you are going. If you see shadow fall across a hole you know you must step over or around it depending upon its width and depth. The path of our economy is predicted by direction of stock market. When things are good and everyone is making money shadow seems to go up and when economy slows (for whatever reason) shadow darker and heads down. At this time (11/04) sun is shining brightly and shadow stretches out long and friendly