subject: Get Information About An Access Bond [print this page] People are choosing an access bond as one method to lower a home loan balance. The homeowner deposits his or her paycheck into the bond account. Because of the calculations involved, it lowers the daily increase of the loan interest. It actually reduces the time it takes to pay off the loan. But the homeowner still has complete access to the money in the account.
This is one way people are looking at in trying to save money on their house loan. The first way to save of course, is to get the best price on the property in the first place. Once the deal is done though, a home owner can still sign up for ways to save on the loan, or to reduce the time it takes to pay if off.
There are advantages and disadvantages with the access bond. It can reduce the daily interest rate of the home loan, which of course is a long term benefit because the lower the interest rate, the less the borrower will pay for the loan. Those who need money can access the account at anytime, so there are no limitations on a person's money.
Some homeowners also use the account to apply for an equity line of credit. But this will raise the monthly payment. But if someone needs cash for the short term, it might be a reasonable option. And the line of credit will be charged a lower interest rate relative to a typical bank loan.
But money removed from the account will negatively impact the home equity. Each time the property owner takes money from the account, he is taking money that has built up as equity. Many realize this happens, but they justify the withdrawal because they need the money at the time.
But when the house is sold, he will see the results of the withdrawals. Because the account has to be cleared when the land is sold, the equity will be reduced by that amount. Sometimes a home owner will only break even on the deal.
This account can be started when the mortgage takes effect or one can be established once the home loan is in place. The economy is tight and credit applications are examined carefully these days. So it is not a given that the access bond will be approved. But people should apply if they are interested in this account.
