Open end mortgage - What is it all about?

Yeah....I heard that same guy, which is why I'm here. As I understood the concept: There is a mortgage "account", with fixed-rate interest. The "owner" has a checkbook, and can pay bills off the acct. My pay check goes into the acct, and I use the principal as a loan if needed. I think the theory of paying down more quickly is that, with a pay check being deposited regularly, the interest paid is based on an increasingly smaller amount. Does that make sense? But I haven't found any bank that has this "product".

I don't think it makes sense and thus you are unable to find a bank which offers such a "product".

there are no banks offering that product. it is something that has received a lot of publicity in the last couple of years. whether it's been proven to be pure folly or something that works well is an answer i don't have.

i have to tell you that i am very much a skeptic about it, though.

The way this idea seems to work is that money is saved by depositing most of one's income into the mortgage account. The money is applied as principle thereby reducing interest accrual. Also the borrower should save on loan fees that result from not being able to access their equity in a close ended mortgage without taking out additional loans. ie an home equity line of credit. (responses welcome)

It can be simply defined as a mortgage in which the borrower is allowed to re-borrow against principal that has been paid so far.

i'm still not convinced that it's a workable solution to anyone's problems.

I saw the same guy trying to sell the book. I am looking for his name, in order to buy the book. GOT IT?

It will be better if you could name the book.

you can get the book by calling 1-800-958-8046

i saw the same infomercial and they also specifically said not to refinance.
so how do you convert the loan??

If you have an open end mortgage and if you want to refinance it, you should speak to your lender or other lenders of your area. This will help you know whether you would be able to refinance it or not.

The book is called "Mortgage Free for life: secrets banks and lenders don't want you to know". The infomercial I saw had this number to call: 1-800-708-8967

WelCome..!!

Open end mortgage :
Mortgage under which the mortgagor (borrower) may secure additional funds from the mortgagee (lender), usually stipulating a ceiling amount that can be borrowed.
Mainly two Mortages One is closed mortage second is Open ended mortage.
In Closed mortage,no more indebtedness can be incurred.And In Open Ended, the amount authorized under the terms of the mortgage has not been reached.
Most conventional mortgages are packaged into pass-through mortgage-backed securities.

Thanks
Hari
Conventional Mortgage :In which the underlying terms and conditions meet the funding criteria means market condition.

Must an Open End Motgage be paid off before selling the property?

a mortgage would be paid off concurrent with the sale of a property. to do so before selling would be a hardship for most people.

I just converted my loan over to an open end mortgage with Citizens Bank.
I was able to pay off all my debt and lower my monthly payments. You have to pay the interest on the loan for the first 10 yrs. During that time you can pay and borrow as much as you want. After that for the next 15 years you have to pay back the loan. I am happy with this so far. I am out of debt and I have the freedom to adjust my payments if need be.