*You don't pay off your mortgage, you make additional principal payments using the HELOC.*

IOW, you borrow money to make a principal payment on your mortgage. I guess it's better to borrow from a HELOC than from a credit card though......

I can see how that might work right now, with 1st mortgages at 6% and HELOCs at 5.75%, but what happens to your "Prime + 1%" HELOC when the prime rate jumps to 8% or 9%? Borrowing at 10% to pay off a 6% note doesn't make sense.

*All your income goes to the HELOC payment. You pay all your bills from the HELOC. *

Until your bank freezes your HELOC and won't let you write any more checks. OOPS! How do you pay your bills then? Especially, how do you make your upcoming mortgage payment on the 15th??

*According to the author, you save money on the "float" of the interest you will pay. You save on the mortgage more than it costs you on the HELOC.*

But saving on the float is a one-time occurrance. You can delay paying a bill by 15 days (due on the 1st but late on the 15th), but the next month you can't delay it another 15 days (you can't slip it from the 15th to the 30th). And you can already make money on the float by putting your paycheck into a Money Market savings account and paying your bills (including the 1st mortgage) as late as possible.

The sum you can float is the total of your bills times the number of days between your paycheck and the late date. It's not cumulative.

For example, if I can save/make money via a 5% HELOC, and my mortgage payment is $1500 PITI, can delay it from the 1st to the 15th and save/make $1500*.05/12/2 = $3.13 each month on the float. Whoopdee-doo!!! I can save more than that by buying one cup of coffee at McDonalds instead of Starbuck. If I can do that with all of my bills, I'll save/make maybe $10 a month on the float. That isn't going to pay off my mortgage 10-20 years early.

I can't see how this strategy could possibly work. On numerous forums I have asked the proponents to walk me through the numbers, and so far they have all either ignored my questions or castigated me for being a defeatist.

I went to the website and clicked on the HOW IT WORKS link. At the top of the page it says "Saved 22 years". That's paying off a 30 year mortgage in 8 years. So I ran some numbers.

To pay off a $200,000 mortgage in 30 years at 6% is $1,199/month.

To pay it off in 8 years at ZERO interest is $2083/month. That's $884 more.

To pay it off in 8 years at 6% is $2628/mo. That's $1429 more.

If you can somehow work the HELOC method and get an effective overall rate of 4%, an 8 year payoff will cost $2438/month. That's $1239 more.

To pay off a $200,000 mortgage you have to pay the entire $200,000 principal plus accrued interest. Simple math is divide the principal balance by the number of months and that tells you the required average principal per month that you must pay. Plus interest.

Where does this extra $1239/mo (or $1429/mo) come from?

I can see no way that an ordinary family is going to be able to make/save/earn $1239 a month by using a HELOC.