The NY daily news posted the article entitled Be wary of line of credit mortgages by Asa Aarons.

He writes about mortgage checking accounts that started in the U.S. about two years ago and came from Australia.

From the article Here’s how the mortgage works. A line of credit is usually a second mortgage. But in this case, it is set up as the primary, or first, mortgage. Rather than making a monthly payment from a checking account to a mortgage company, homeowners use a line of credit mortgage the way most consumers use a checking account. They deposit their entire paycheck into the line of credit mortgage account, immediately reducing their mortgage balance. Because they slightly lessen the mortgage balance, they slightly lessen the interest to be paid on the account.

Read more in the article entitled Be wary of line of credit mortgages by Asa Aarons.

It is very interesting and now I have to find out how much of an impact it makes.