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Do It Yourself Mortgage Accelerator Plan

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Joe of Bright Investing writes an article on mortgage accelerators. I didn't realize such things existed. Apparently the business sets up extra electronic payments to aid you in pay off your mortgage early. Most banks allow you to do the same thing for free, so it's a pretty bad idea for anyone except the accelators.

In the comments, Joe and I suggest that for many people, with good credit, who have bought homes in the last few years, it may be best to take that extra money and invest over the 20-25 year span and then buy the property outright. The advantage is that it's possible to earn 8-10% interest which compounds much better over the long term than some mortgages. Plus you can invest the DIY Mortgage Accelerator money in a way that it can help you if you should ever experience a hardship, such as losing your job.

Last updated on October 27, 2006.

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Money Management

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3 Responses to “Do It Yourself Mortgage Accelerator Plan”

  1. Making It Week 2 Week » Blog Archive » Mortgage Savings says:

    […] Bankrate.com has an article today, Mortgage rate high? Get same rate on savings and Lazy Man and Money has a post Do It Yourself Mortgage Accelerator Plan.  These both suggest you pay the mortgage faster. Bankrate goes as far as saying instead of saving the money, put it toward the mortgage.  Last week Five Cent Nickel posted about Opening a Bank of America Home Equity Line of Credit.  I was entrigued by his idea of linking the LOC to protect against checking account over drafts, I should check with my bank to see if they will let me set that up also. […]

  2. Toby says:

    Have you looked into some of the mortgage accelerator programs that are available now?

    I see that this article is from 2006 and so let me give you an update on these programs. You don’t have to refinance your home or make extra payments. Depending on your income and expenses you may be able to pay your home off in as little as 7-10 years.

    Check out http://mortgageaccelerator101.com to educate yourself on these programs.

  3. The main problem with a mortgage accelerator is the fact that it focuses on paying down the mortgage which is ok if you have no other debt and your retirement is on track to provide all the money you will need.
    If you have other debts or your retirement needs to be propped up, you should look at an automated debt management plan. They typically accelerate the mortgage last after the more expensive, compounded interest rate debts are paid off savings you far more money overall and don’t eliminate your tax write off while you need it.

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