Good Morning Now that I have the loan Mod I want to be done with the house but I owe more than it's worth. I heard about Equity Optimization. It doesn't sound bad. What are your thoughts? I think I can hang in there for another 6 or 7 yrs if the equity opt really works. Thx in advance

Hey TheBlessesWest!
There are 3 things you need to make Equity Optimization work:
1) You have to have equity in your house. You can't be underwater.
2) You have to be able to qualify for a HELOC (home equity line of credit) 680+ credit score
3) You have to have positive cashflow. That means you have more money going in than going out during the month.
This is a great video further explaining how Equity Optimization works: <<MAKE SURE TO WATCH
AFTER watching the video, the following below will make more sense... I promise. :)
How Equity OptimizationREALLY works:
You dump your entire paycheck into the HELOC account (home equity line of credit), then pay all your bills using the HELOC.
As far as I can tell, the real trick is simply that you pay more than the scheduled payment. If you have $200 leftover after your expenses at the end of each month, then that $200 would normally set in your checking account.
After a year, you'd end up with $2400 more in your checking account when you started. By using a HELOC as your checking account, that $2400 ends up as extra payments on the HELOC rather than in your checking account. If you take that $2400 and spend it, though, you're at the exact same point you'd be if you were just paying the scheduled payment.
One flaw is that a HELOC usually only has a limited time "draw" period (the time you can take out your money whenever you want). Five years seems typical. After that, your balance is locked down and you can't take anything out.
So, the whole process breaks down at that point. If you dump your entire paycheck in you've just made a nice big payment. But you can't pay the rest of your bills and that's baaaaad news. :/
My suggestion? If you don't want the house, look into a short sale (when you sell it for less than it's worth), or a deed-in-lieu of foreclosure. That's basically when you sign the house back over to the lender.
I'm not a mortgage professional, but I have had my home go underwater and explored both options. Make sure to sit with a pro to discuss your options as well. These are merely my opinions and should not replace professional advice. :)
The Budgetnista

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