This is part 3 in a six part series.
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Strategy 3: Optimizing daily cash flow and limiting interest accrual using alternative financing vehicles
Debt requires an investigation into all available vehicles used to finance debt to ensure you are using an efficient method of paying it back. Especially when it could cost you hundreds of thousands of dollars and keep you locked in a perpetual cycle of debt. There are several types of loans you can take out to buy a home. Which one you choose should be determined by how your cash flow can be used in the loan and how interest is calculated.
Conventional loans, the most popular, handcuff the consumer from optimizing cash flow and could cost hundreds of thousands of dollars in interest most of it paid up front. Signing a contract for 30 years of fixed payments, regardless of what the principal balance is, no longer sounds like conventional wisdom. Especially once you compare it to some alternative financing mechanisms that have been proven for decades to be much less costly and much more efficient when structured properly. They are specialized variable rate credit lines that can essentially be used like a checking account. They are secured by personal assets or home equity.
These alternative vehicles calculate interest based on what your average daily balance each thirty days. As your balance decreases your so does your monthly payment. The end result is you pay up to 80% less interest than you would using conventional loans. Another feature is that any money you run through the account stays in a liquid position. This puts you in a much safer position in the event of an emergency, provides a lower payment to make in case of loss of income and makes you your own banker, never having to rely on costly loans or payments again. It utilizes your monthly cash flow to immediately impact any principal balance and puts your money to work for you. You actually save interest rather than loaning it to your bank at 0% interest. These credit lines are not easy to find. Most banks put restrictions on credit lines and charge expensive fees for using the line. Before signing on the dotted line you should consult a self banking expert who can review the terms of the agreement to make sure the credit line is compatible with this strategy.
Determining the ideal way to structure your debt into one of these credit lines is perhaps the most important aspects of this strategy. You must get proper advice from an expert who has the resources to accurately forecast potential inflationary pressures and forecast future cash flow and liquidity fluctuations. Looking to maximize every dollar you make, improve your cash flow, and limit interest accrual? Using this unique strategy will get you immediate results. For a free consultation call Stephen Vincelli at 727-502-7157 or visit www.faithandyourfinances.com.