The Pros and Cons of Velocity Banking
Velocity Banking is undoubtedly the most effective and the quickest way to pay off a mortgage. But like all other business shortcuts, Velocity Banking also comes with its fair share of highs and lows. To have quick and fruitful results of this strategy, it requires one to adhere to certain stipulations religiously and use this method to pay off your mortgages.
Here are some of the advantages that Velocity Banking brings to the table when one uses this approach to swiftly pay off the mortgage sum as quickly as possible.
Advantages of Velocity Banking
1. Quick payment of mortgages:
There are many mortgage payment strategies that work pretty well when it comes to paying off the mortgages on time. But nothing is as effective as Velocity Banking because this approach is verified to bring quicker results. So what Velocity Banking actually does to pay off the mortgage is that this strategy significantly improves the time period it usually takes to pay off the home loan and makes you enable to subsequently pay it in a reduced time period.
2. Freeing up of Equity
Usually, mortgages do not allow one to tap into their equity. But in case you have a HELOC account due to Velocity banking, you will be able to access the money that you can normally not access during the streamlining of your mortgage payment process.
3. Less interest to pay:
One of the important requirements of Velocity Banking is the utilization of free cash flow and with this, the length of mortgage is substantially decreased down and it allows for less compound interest on the original amount borrowed.
4. Easy and quick access to cash:
Using a HELOC lets one access and subsequently utilize the money that they otherwise cannot put to use and is not readily available. For instance, you have a sudden urgent need for money, your HELOC is there to help you out of this emergency.
Disadvantages of Velocity Banking
1. Adjustable HELOC rates:
Some monetary establishments may not deliver settled rate HELOCs that puts a touch of vulnerability on the measure of interest you will be charged later on about the item.
2. Requires free cash income
Velocity banking is a procedure that requires additional cash to be utilized to satisfy the exceptional equalization of a mortgage. However, on the off chance that you come up short on the additional pay or have awful ways of managing money, then sadly, Velocity banking might not be for you.
3. Appraised value versus Home loan balance:
While you apply for a HELOC, the financial establishment will take a gander at the assessed estimation of the land, i.e., the Appraised value of the land. There are often times when the housing market isn’t doing admirably, you may owe more than what the property estimation. And an LTV additionally necessitates that you have been paying on your home loan for quite a while before the banks will give you a chance to take out a Line of Credit.
4. Ordinarily utilized in MLM plans:
An investigation on Google and on the other platforms on the web shows that Multi-Level-Marketing plans are pervasive with this kind of home loan reimbursement methodology. They pull in property holders hoping to satisfy their home loan faster, and without any risk. MLM tricks may endeavor to offer courses or have you fund through a bank where they get a commission. Be careful with this plan, since finding out about the idea of speed banking or velocity banking is free. Whenever MLM and fund are alluded to in a similar sentence, you can wager there’s an irreconcilable situation.