How does HOMEOWNERSHIP ACCELERATOR work? Can you do it yourself? Without the program? How much does it cost?

Question

It seems to good to be true!!! Has anyone paid off their mortgage this way? Does anyone have the complete details on this system? How do I get started? DO YOU BELIEVE THIS WORKS??????

Answer 1

The previous three answers are not exactly right. They are not familiar directly with the product. The HOA will work as advertised if you have all three of the following.
1. great credit
2. at least 20% equity in your property
3. you spend less than you make on a monthly basis

I have complete details on how the program works. It is not magic, it is just math. It is a zero balance sweep acct that has two components. A checking acct and your home loan. Any money deposited in your checking acct gets swept against your home loan at the end of each day. Any money that you spend gets swept back to your checking acct when you spend it.

That way every dollar you earn gets applied to your mortgage balance and you do not pay interest on it. If you have ever looked at an amortization schedule of a mortgage and have seen what an extra $100 to $200 does to pay off your loan faster (it saves you thousands of dollars of interest) you can see how depositing your enter paycheck against your mortgage can pay off your home loan extremely fast.

It is not something that you can do your self, the key is getting every dollar working for you the second you earn it, than have it still available to spend when you need it.

I hope this helps.

Answer 2

I don't have direct experience with their program, so use at your own risk. However, it seems like they are getting you into a HELOC in addition to your mortgage. There is certainly a cost for that, and they don't indicate what interest rate they're offering, so it's hard to see how they can save you money, especially if you have to use the HELOC. I think a cheaper and more efficient way of doing this is to prepay your mortgage on a biweekly basis with automatic online bill pay service. Make sure that your mortgage doesn't have any prepayment penalty and set up an payment every two weeks. This basically makes one additional payment per year, and therefore reduces your interest rate significantly. If biweekly doesn't work, then you can do it on a monthly basis by adding 1/12 of your payment to your normal payment to achieve the same thing.

Answer 3

These bi-weekly programs save you money by creating a hypothetical 13th monthly mortgage payment using 26 payments instead of 12. This ultimately helps you pay off your mortgage in about 23 years instead of 30 if you start from the beginning.

For example, if your monthly mortgage payment (excluding escrow) is $2400, adding 1/12 extra is $200 for a total of $2600. The extra $200 goes toward paying down your principle loan balance. In the first few years of home ownership, roughly 90% of your payment goes toward interest and only 10% toward principle. That means your early payments are $2200 in interest and $200 in principle. By adding the $200, you now pay down your principle by $400 per month in the beginning. That saves you a fortune in the long run--but here's the big if--if your budget can afford that extra 1/12 payment.

They also charge you several hundred dollars for the privilege of setting up the arrangment.

Save yourself a lot of money and just add 1/12 of a payment extra to each regular monthly mortgage payment. This costs you absolutely nothing and you can cut back to the regular payment if your budget gets really tight.

These folks are bottom feeding scum who offer nothing special.

The same goes for declaring your California Homestead Exemption. They charge you $100-200 to file a standard form available from your county assessor's office.

Answer 4

The ONLY way to pay off ANY loan faster is to pay MORE than the required amount. You can do that on your own. Most of the plans involve making half of a monthly payment every 2 weeks. That make 26 half payments, equal to 13 full payments each year. Sending and extra monthly payment once a year will do almost exactly the same thing. Sending 1/12th of a payment extra each month will come even closer. If your loan does not allow you to do this, it will not allow the program either. 99% off all home loans WILL allow you to make extra payments.