When you become a homeowner, you’ll constantly hear about velocity banking strategy. For some people, it is the perfect way to pay off of your mortgage in 5-7 years. However, others view it to be a scam. Well, it all depends on how well you know this strategy. Lucky enough, we are here to clear some of the doubts you may have in mind regarding the velocity banking strategy.
In this article, we will take you through some of the things you need to know about velocity banking strategy. Keep on reading to find out more.
What is Velocity Banking?
First things first, you ought to understand what velocity banking is all about. To give you an insight, velocity banking is a strategy that allows individuals to use a line of credit as their primary account and eventually pay off a loan using lump sums. This is mostly the case when paying off a mortgage.
To guarantee the benefits you expect, the velocity banking strategy works on the idea that using a line of credit will ensure you use your cash flow and any extra money in covering expenses. Better, some of the extra money goes into paying off your mortgage.
How is the Velocity Banking Beneficial?
Velocity banking has a lot to offer than some people tend to think. First and foremost, velocity banking decreases debt rapidly. After all, you can take a 30-year mortgage and pay it off in 5-7 years. In fact, some people do better or worst depending on how well you handle it. But the reality is that velocity banking rapidly decreases debt.
If you think this is all that is destined to come your way, then you’re in for a big surprise.Aside from reducing debt rapidly, it also increases the monthly cash flow while at the same time increasing the interest paid. No wonder it is already attracting the attention of many homeowners in different parts of the world. These are just but some of the things that you ought to know about the velocity banking strategy.