I recently learned of a strategy that apparently originated in Australia to use a HELOC like a checking account to pay down a mortgage and save thousands in interest. You simply would take out the HELOC apply the money to the mortgage, and then use it like your checking account (setting up direct deposit and paying bills from it). Then wash, rinse, and repeat. It sounded simple enough, the only caveat was that you have to be living on less than what you make. Apparently this works because the way that the interest is calculated differently, and the fact that your income getting direct deposited will satisfy the monthly payment on the HELOC.
Has anybody heard of this, or used this strategy before? It could be something I want to pursue when I get my first place, thanks for any input.
