Section 1: Using the BLOC to Manage Your Money

What is a BLOC?

1. The BLOC is a Home Equity Line of Credit Account:
   
   the account is a 2nd mortgage that is secured by the equity value of your home.
   
   Example:
   if your home's market value is worth $200,000, and the remaining principal amount on your first mortgage is $150,000, your equity value is $50,000.
   
   Banks will open a line of credit account on your behalf for $50,000 at 100%LTV.
   
   Two important links:
   
   
• click here to understand how LTV works
  
  
• you can get a quick assessment of your home market value
  
  
  
2. Home Equity Line of Credit Accounts are different than Home Equity Loans:
   
   home equity credit lines are open lines of credit where you can advance yourself money at anytime by simply writing a check against your line of credit.
   
   Equity loans are one-time loans that work like mortgage loans. Banks will give your a loan based on the LTV value of your home. You will then repay the loan over a period of time at a fixed APR rate.
   
   For the BLOC program, you need to open a home equity line of credit account:
   
   
• download the product characteristic requirements for the BLOC
  
  
  
3. The BLOC to Function as a Money Account:
   
   instead of using your bank checking account for receiving and paying funds, you will use your BLOC as your money account. All of your income and living expenses come into and out of the BLOC.
   
   

   In other words, all of your wages, paychecks, and other related income will be deposited into your BLOC.
   
   And all of your expenses such as your mortgage payment, food, clothes, transportation, and all other living expenses will be paid by writing checks using your BLOC.
   
   let's review this further in the next slide