Founder, FirstLienHELOC.com
What We Mean by "Good Fit"
When we say a first lien HELOC and the velocity banking strategy may be a good fit, we mean the strategy is likely to work for your household's cash flow. It's our view of the strategy, not a lender's decision. Lenders set their own guidelines and decide every application.
We look at fit through monthly surplus, not income level. A household earning less with a steady surplus can be a better fit than a household earning more that spends nearly all of it. All reliable income counts the same, whatever its source: wages, self-employment, retirement income or anything else that arrives consistently.
What We Look At
What's left each month after all expenses. The strategy runs on this number. The larger and steadier it is, the faster the balance comes down.
Whether income arrives on a predictable schedule and expenses stay within a predictable range from month to month.
A HELOC is an open line of credit. The strategy works only if the available credit isn't used for non-essential spending.
Credit cards and other high-rate balances change the math. Paying those first, or consolidating them, can matter more than the mortgage.
Savings or available credit you can fall back on if income drops or a large expense comes up.
How long you expect to stay in the home and keep the strategy going. Short horizons leave less time for the savings to build.
When It's Not a Good Fit
The strategy is usually not a good fit if your monthly cash flow is negative or unpredictable, if you tend to carry balances on open credit lines, if you have no reserves, or if a variable rate would strain your budget. In those cases a fixed-rate mortgage and a plain savings plan may serve you better.
Our Lending Partner's Guidelines
Separately from our view of fit, the lender we work with sets its own product guidelines. These are the lender's guidelines, not ours, and they can change at any time:
State: available in all states except Texas, Hawaii, Alaska and Maryland.
Property type: not offered for manufactured, mobile or modular homes.
Credit score: 680 minimum.
Other lenders use different guidelines. Meeting these guidelines doesn't mean a loan will be approved, and FirstLienHELOC.com never tells anyone whether they are or aren't approved. That decision is always the lender's.
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