Can you use a HELOC for velocity banking without a sweep account? Karam asks, and the speaker explains whether this debt removal strategy works without that specific banking feature.
Grom says I already have a HELOC on my owner occupied home. But that HELOC provider has no sweep account capability. But they do provide checks I can write. Can I still do velocity banking? I do have lots of high interest credit card debt, about 100,000 at 25% make 12k a month. Can you tell me the name of the bank? I also get 7,000amonth in rental income from tenants. Okay, tell me the name of the bank and if the bank has online banking, if the bank has online banking, then in addition to you writing checks, you can also log in to the bank and make a digital transfer in and out of the heloc. And you'd be able to do velocity banking pretty simply. So understand that not every bank provides what's called a sweep account and that's not what's needed to do velocity banking. Does it make velocity banking easier? Does it create automation? Yes. But sweep accounts typically only exist on a first position heloc. If you have a second position heloc, then typically you're not going to get that sweep account function. For those of you that don't know what sweepaccount means, it just means that by 12 o' clock midnight, if you have $500 in a checking account and that checking account is linked to the HELOC at the same bank, that's the only way you get a sweep account. So you have to have a checking and the HELOC at the same bank. By 12 o' clock midnight it automatically takes the $500 and sticks it inside of the home equity line of credit. This way you, you pay as little interest as humanly possible. Okay. All right, Karam, I have not seen you respond, but I would just simply that that was my 2 cents there. Can it be, can velocity banking happen? Absolutely without the, the sweep account? If all you have is writing checks, it's going to be much slower in terms of money in, money out. So it would make that HELOC undesirable and then I would want to look somewhere else depending on how long you've had that HELOC for.
