Avoid Mortgage Accelerator Programs Like the Plague

by Kevin on April 1, 2009

As I’ve written before we bought our first home back in September 2007. It’s been a great thrill thus far. Our mortgage payments are well below the upper range of “allowable” debt-to-income ratios. Everything is peachy.

A few months after we moved into the house we started receiving a plethora of offers from companies. Offers to make our lives easier by cutting or fertilizing our grass (wow who knew it was so expensive), to pick up our dry cleaning (we use Dryel, no thanks), to saving us interest costs on our mortgage by accelerating our payments.

Woah, hold up. That last one there makes me pay attention.

You’re saying you can save me money on my mortgage? Legitamitely? Legally? Okay, I’ll bite. I’ll open the envelope.

Imagine the car is your mortgage. Now imagine it accelerating… the smoke is just interest you are leaving behind.

(Photo by dodge challenger1)

How Mortgage Accelerator Programs Work

If you don’t own a home or you threw away all of the marketing materials as soon as you received them, let me give a brief explanation of how a mortgage acceleration program works.

With a typical mortgage you make monthly payments over the life of the loan. A thirty year mortgage is 360 months and 360 payments. Thus, each month once your payment is processed your mortgage is reduced by a certain percentage of your payment.

Obviously to pay off the mortgage faster you need to pay more principle, especially at the front when 90-95% of your payment is interest.

These mortgage acceleration programs promise to set this up for you while also not increasing the total amount you spend each month. So if your mortgage is $1,000 per payment, you’ll still end up paying $1,000 per month yet somehow pay the mortgage off faster.

Sound too good to be true? It is.

How the system works is instead of paying once per month, you pay once every two weeks. The bank receives your payments more frequently, thus you are charged less interest because the principle is paying down the loan more often. Essentially you are saving two weeks worth of interest on a tiny bit of principle and compounding it over time.

Up to this point everything sounds legit and it should work. But wait…

The Catch of the Mortgage Accelerator

There are two major problems to this system.

The first problem is they mention in very tiny print toward the bottom of the letter that this program will actually cost you money to participate. The letter I am looking at right now has a one time fee of $49 and then a bi-weekly cost of $4.15. In the first year you will be charged $156.90 (26 bi-weeks x $4.15 plus $49 one time) just to participate. Ouch.

The second problem is that you don’t make 12 payments in a year by making a half-payment every two weeks. Why? There are 52 weeks in a year. There are 26 bi-weekly periods in a year. If a month has four weeks (or two bi-weekly periods), then divide 26 by two and you get… ta da! 13 months in a year.

No, they haven’t extended time (I would sign up for that!) they have snuck an extra payment in during the year and charged you $107.90 for the service.

What a crock.

Set Up Your Own Mortgage Accelerator

Here’s a simple alternative: create your own mortgage acceleration “program”, don’t charge yourself for it, and pay your mortgage off faster. Sounds good, right?

If you wanted to mimic the program I described above just divide a regular payment by 12 and add that amount to each of your normal payments. If your mortgage is $1,000 per month that would be $83.33 extra each month. So each month pay $1083.33 and be happy to know that you are reducing your principle faster than normal. (And you get to keep all of that fee money, too.)

The best idea is to have a plan. That sound ridiculous I know, but planning is key. Can you afford to pay additional down on your mortgage? Or do you have other savings goals to meet (college education, retirement, credit card debt, etc.). That’s what this blog is about. I hope you’ll stick around.

Hey Readers — are any of you signed up for a mortgage acceleration program? Have you ever received one of these offers? Leave a comment or drop me an email.

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Garry - thisimprovedlife April 1, 2009 at 6:16 am

That is definetly one to avoid. We plan on starting mortgage overpayments later this year when we have got rid of some debt. That formula you applied at the end sounds a good one, thanks.

Baker @ ManVsDebt April 1, 2009 at 6:29 am

Fantastic explanation of a common financial mistake people make. You nailed it right on the head when you outlined how to set-up your own acceleration plan. Paying someone 100+ bucks to send in bi-weekly payments when you can do it will online bill pay in a matter of minutes? No way, Jose!

Do You Dave Ramsey? April 1, 2009 at 6:37 am

RUN AWAY… a mortage accelerator program in which you have to pay to participate if idiotic! You may as well tattoo “I’m a dumb a$$” on your forehead.

Most lenders will allow you to divide your payments, especially if you set up an autopay.

I AGREE…The truly dangerous part of this scan is that they claim no additional principle payments and only a “small” fee.

Later in the year when you’ve forked over the fees they’ll steal your Christmas money by demanding that 13th payment.

With friends like these….

tom April 1, 2009 at 7:00 am

I don’t own a home but have heard many stories about these debt elimination services, mortgage acceleration, etc. and I pretty much concluded that people can do these services themselves.

I mean lets say you have a lot of debt, why do you need to pay someone to consolidate or negotiate for you when you can just pick up the phone and call your credit card company?

Same with debt acceleration, go to the person who set up your mortgage and they can set that up for you without charging ridiculous fees.

I think people simply have become so used to debt and overwhelmed, and don’t understand it that they will do anything to get rid of it, and get rid of it fast thinking it is easy to do so.

Jason April 1, 2009 at 7:28 am

I like your advice on how to set up your own. We tried to simply pay bi-weekly ourselves once and were told that we weren’t allowed and would be hit with late fees because the payments were not enough.

Philip April 1, 2009 at 8:18 am

Plus the fact that they do their best to make the envelopes these come in look like an official letter that you have to do with your lender. Then at the very bottom in that tiny print explains what it really is!!!

I got really annoyed with the 50 plus of these offers I probably got when I purchased.

Brian April 1, 2009 at 10:31 am

Most of this plans also hold your 13th Payment and add it at the end of the year, thus making you pay for the privlige of allowing them to earn interest on your money. Don’t forget that you just want to divide you P+I when figuring out how much extra to send in, many different scenerios on how to do this at the Bankrate calculators.

Corporate Barbarian April 1, 2009 at 11:57 am

You could take a look at your mortgage schedule. If you don’t have one, you can easily set this up as an Excel spreadsheet. Just take the next month’s principal amount, and include that in your monthly payment. This should be a small amount at the outset, and will increase over time. This method will allow you to pay off double the amount of principal each month, cutting the mortgage time in half, and saving you lots of interest.

Kevin April 1, 2009 at 1:25 pm

@Garry: I think as long as you are making some sort of extra payment that’s better than nothing.

@Baker: Yup. It frustrates me that the mortgage information is either freely available or they sell it to these companies to offer this crap.

@DYDR?: Hmm, didn’t know most lenders would let you make the changes on your own. I prefer to set ours up each month so if we wanted to pay extra one month we could.

@tom: I think the reason these services survive is (well obviously) someone is using them. We are a very lazy culture. We think, hmm, I should really try to get rid of that credit card debt. Ho hum. But then we hear something on the radio that promises to slash the cost for us… and we pick up the phone so someone else does it. (Even though it ruins our credit.)

@Jason: I can see how you would have to be careful and check with your mortgage company.

@Phillip: Excellent point! That really bothers me. “URGENT PLEASE OPEN”…

@Brian: That’s awesome. I didn’t know that. How shady.

@Corporate: Yup that’s how a lot of people are making a 30-year mortgage act like a 15-year. If you had to stop the extra payments you could…

James Oates April 1, 2009 at 1:40 pm

Great information, thank you so much…nicely done.


Diane April 1, 2009 at 7:18 pm

I’ve never gotten one of these offers… Can’t believe the scams out there.

When I refinanced for 30 years I decided to make additional principal payments, rather than do a 15 year mortgage with higher payments required.

Originally I paid additional on the principal every month. I then decided to pay off my little remaining consumer debt, & save some extra money in the emergency fund. I’ve just started putting more on the principal again, but I know I don’t have to do that if money gets tight.

This plan is working fine for me, without any commitment of extra money.

Kevin April 1, 2009 at 8:25 pm

@Diane: I’ve actually recommended doing just that in the past, which you can find here.

Some people say the flexibility you would gain by not having to pay the full 15-year payment (if you got into a financial pinch) is likely to only be a few hundred dollars and it isn’t worth the difference. I say a few hundred dollars can make or break you in a financial pinch, so I’ll take the risk — especially if I intend to pay it off like a 15-year mortgage.

Kristy April 2, 2009 at 10:26 am

We signed up for the Wells Fargo mortgage accelerator program a few years ago without any penalities, hitches, or hidden fees. Believe me, I checked!

My husband gets paid on the 15th and 30th of the month but I have bi-weekly paychecks. Our ‘accelerated’ mortgage payments always fall on the same week as my extra paycheck so we can cover it. It keeps me from spending that extra windfall and puts it towards paying down our home without me having to do anything extra.

Clean Simple April 2, 2009 at 11:01 am

We get those all the time. Even from our mortgage company!

You can easily do this yourself by making extra payments. Add to your normal payment–the mortgage company will treat any extra paid as going toward the principal. Add an extra 1/12 of a payment each month and there you go, a faster paydown.

michael May 7, 2009 at 11:38 am

Your info on the “bi-weekly” MA plan is very outdated, but some people still try to push this.

What is you comments on the NEW MA plans using the Letter Of Credit not only for the mortgage but for ALL DEBT Iincluding credit card debt, student loans, etc.

Thank You

Steven July 22, 2009 at 3:08 pm

Mortgage accelerators work and that’s why people have used them for years. The ones that use a heloc or revolving credit line work best because they are customized for each user’s finances.
Not only does it offset mortgage interest, but it also gives the user a simple plan to follow and a way to manage how well they are doing over time. It’s like a trainer, providing motivation, instruction, and support. The name of the article is prejudicial, about “avoiding them like the plague”.
Just look at all the people over 60 with big mortgages today, or losing their homes – they followed that advice.
The best thing most people can do is to use a mortgage acceleration strategy. Forget about doing it yourself because most people don’t have the discipline.

Kevin August 2, 2009 at 2:05 pm

@Steven: Your comment is laughable. The people over 60 today with big mortgages don’t have them because they didn’t use a mortgage acceleration program. They have them because they bought houses they couldn’t afford, or just expensive homes, or because they got an adjustable rate mortgage.

The worst thing people can do is use a mortgage acceleration program that charges them for the “privilege”.

Steven August 2, 2009 at 4:13 pm

@Kevin: Anyone who needs to begin their post by denigrating an opinion opposite their own is someone to be suspicious of. You fit the mold. Not only is your comment rude, it flies in the face of all statistics. But, what do you care about statistics?
In fact, you are ignorant! Anyone who listens to you, about anything, deserves what they get!
People use services they can’t do themselves – weight loss systems to help lose weight, financial planning consultants for establishing a means to an end (of which a mortgage accelerator is part), and exercise trainers to stay focused at the gym.
All real, all good, and all a fact – but, ignorant people like you don’t believe in facts – you have an opinion to sell.
The worst thing people can do is listen to you – and not accelerate their mortgage payment.

Kevin August 2, 2009 at 5:35 pm

@Steven: You come across like you work for a mortgage acceleration program.

I can prove to you that what these programs charge you can be done on your own — without any cost.

I welcome you to show me how paying for a mortgage acceleration program is better than doing it for free.

Weight loss systems are a great example of how things don’t work. When was the last time someone went on a diet (which is what I would classify as a weight loss system) and kept the weight off?

No, what someone who is looking for weight loss is a lifestyle change. Americans are far too reliant on pills and programs that cost them a ton of money when simply eating better and exercising would suffice.

The same is true in most areas of finance. The “Turn Debt into Wealth” systems you hear promoted on the radio are garbage. Programs don’t work unless they institute permanent life change. This is true of all systems whether they be Dave Ramsey or someone on the radio. Unless you change the problem internally — at the core of the person — then inevitably they will return to their old ways.

What do I have to sell? Do I have a book out? (No.) I’m trying to show people what a crock many financial products are. I’d love to learn how to sell my opinion. I’d sell it to everyone if I could!

Again if you can show me how paying thousands over the course of a program ($107.90 per year plus the $49 set up fee) is better than dividing up the year into 13 payments on your own — and getting the same result — I welcome that.

You have also failed to show how people over 60 have big mortgages or are losing their homes because they didn’t use a mortgage acceleration program. Again these mythical people you mention aren’t in those situations due to not using a program like this. It is due to other poor decisions.

Steve Orris August 2, 2009 at 7:51 pm

Full disclosure: I am one of those people the author warned you about. I sell a “mortgage acceleration” product.
(To the author: if you consider this to be spam, please except my apologies and simply delete this. I’ll understand. [Author: I don’t mind it, but won’t allow you to link to your commercial product. Sorry.])

I first came across the concept a few years ago. I had intended on selling a system that charged a setup fee and a monthly servicing fee to “handle it for you”. The more I thought about it the more I couldn’t sell such a system. Although it works it is taking advantage of people. With a little education, most people could make some extra payments and achieve similar results on their own. A biweekly payment plan could take several years off a mortgage. But realistically most people don’t have the discipline to follow through and really see that much savings. If you are one of the few who do have that discipline and financial ability then you may think this whole discussion is a stupid waste of time. For the rest of you I offer something else.

I’ll be blunt here; a few people do think my company is a scam. These people are intelligent, well meaning people who have simply not experienced the program for themselves. Does everyone need our product? No. Does everyone qualify? Most, but not all. Can you save tens of thousands of dollars on your mortgage and other debts using our program? Maybe, maybe not. I, or another independent agent, can take a few numbers from your current financial situation to determine what our system can do for you. You can then decide if you want to use our system or not.

Can you do something similar without us? Yes. Of course you can. We make it simple. We take into consideration far more variables than you will on your own. We get optimal results saving people more than the cost of the program many times over. Many people have someone else prepare their taxes. It’s not that they can’t do it themselves, it is just easier and more effective to get help.

Many people have been skeptical of our company simply because it sounds too good to be true. What will it cost you to learn more and see what we can do for you? Nothing. What will it cost you to not use our program? (Something to think about.)

If you are honestly seeking answers you can see and hear plenty by clicking on my name above (Steve Orris).

Steven August 2, 2009 at 7:57 pm

@Kevin: The arguement about people losing their homes is not academic – over 3 million foreclosures projected in 2009 and 8 million in default as of now (Bloomberg). Many, as you say, are the result of aggressive recent lending (option arms), but there are also a large number who have owned their homes for over 15 years, and they are going under due to job losses, not by lending scams. Those are the people who would have been protected if they prioritized a mortgage acceleration plan.

You referenced one company that charges $3500, but there are others programs for under $500, and are just as effective. None are based on the 13 week bi-weekly system. Who wants to write a big check every 2 weeks? Also, bi-weekly plans save only about 5 years.

It’s obvious your argument is that people can do it for free; – a do-it-yourself system. You are entitled to your opinion, but if I can buy a system for under $500 that keeps me on target to pay off my mortgage early, (like in about 12 years) saving me over $150,000K, I’ll “risk” the $500.

I can also file my taxes myself, but I use an accountant. Do you also advocate doing that for free?

Lastly, I don’t need to “show you” anything – I am not trying to sell you anything, but you have your opinion, and I have mine. I want peace of mind, and I don’t want to have a big monthly mortgage payment if my employer downsizes ( you can’t depend on employers). Mortgage acceleration, whether you do it yourself or you buy one (for under $500), is one of my priorities.

Le’t just agree to disagree, OK?

Kevin August 2, 2009 at 8:23 pm

@Steven: I can agree to disagree, but I still don’t think you’ve made your point.

Yes there is a chunk of the population that has lost home to foreclosure. Some through aggressive lending some through job loss.

Using a mortgage acceleration would have saved these people? I’m not convinced. I think a substantial emergency fund would have been a pretty good remedy. Remember until recently the savings rate in the US was negative. If you’ve got 6 or 12 months of expenses saved up and lose your job you suddenly have 6 to 12 months to either get a new income stream or lose your liabilities (mortgage).

My point at the end of the day is why do something you can do yourself for free?

Do I do my own taxes? Yes. It costs me $16.95 to do federal and state taxes with e-file. I’m not an accountant, but I can use cheap web software to do it rather than being charged by the hour for an accountant. (I see your point: I don’t do my taxes by hand — so why not rely on someone else? I get that.)

I completely agree you can’t rely upon your employer. I’m just not buying that accelerating your mortgage with a paid program is the solution. For that problem a healthy emergency fund and paying your mortgage off early yourself should do the trick.

gotocollege August 19, 2009 at 11:32 am

Real mortgage accelerated products deal with taking out heloc’s and playing a game of interest rates, not bi-weekly payments like the guy who wrote this blog is talking about. Real acceleration products cost thousands of dollars and are way more complicated than paying a few more dollars each month to pay down the principle. No wonder you all are getting all upset about getting taken for this ‘scheme’

Kevin August 19, 2009 at 5:46 pm

That’s my point. The offers I received were just that: schemes. Ripoffs.

Steve Orris August 19, 2009 at 1:57 pm

“The highest form of ignorance is to reject something you know nothing about.” – Dr. Wayne W. Dyer

“Gotocollege” understands that there is a difference between real mortgage acceleration products and the schemes that look like them. However the most advanced product no longer requires a HELOC.

Kevin August 19, 2009 at 5:45 pm

@gotocollege @Steve Orris: Keep it up guys. I’m finding this hilarious. No one has been able to bring evidence to the table that the products they are promoting are not scams. If you can prove otherwise then I’ll read your evidence and possibly change my mind. (Yes, I am open to changing my mind when presented with solid facts.)

In short I base my opinions on what I can get my hands on. If I have to register at your (not you specifically, any of these products) website and give lots of personal information to find out about whatever great mortgage acceleration product you offer, I’m not interested. You should be able to give me enough details to make a decision without a lot of secure information. (Or at least an example that I could then apply my own situation to.)

It’s like anyone trying to sell you a product. You call a financial adviser and ask what they charge. “Well why don’t you come down to the office so we can discuss your individual situation.” Red flag. If you can’t be upfront and honest with me about your pricing, I smell something funny. (Again Steve this is not directed at you. I’m speaking in general.)

What I think happens in many situations is someone comes up with a new package for an older financial principle (or offers to does menial, repetitive tasks for someone) and charges money for it. They are reluctant, like the financial adviser, to disclose what they really do because if they did the person could figure it out on their own and save their money.

Nonetheless this post is about the offers that I received in my mail. The offers I received were ripoffs. The offers I received made no mention of using a HELOC in any kind of way. It was: pay an up front fee to get started, then pay a monthly fee. These fees would allow you to essentially pay one extra mortgage payment per year. I think we can all agree that paying one full extra payment per year is something that every person is capable of doing on their own, without fees.

Do you disagree?

Steven August 19, 2009 at 6:38 pm

@Kevin It seems you have a choice – avoid financial planning – they are all scams and you can do it yourself. Forget abour mortgage reduction, insurance, investment advice and do it yourself.


Purchase some knowledge (ie – a financial plan that doesn’t cost nearly as much as hiring a financial planning firm) and get the assurance of knowing you’ll have X amount of dollars in Y years. Mortgage acceleration is part of any smart financial plan – just do it all yourself.

Kevin August 19, 2009 at 7:15 pm

You continue to speak in concepts rather than providing evidence. I was using financial planning as an example.

Would I avoid financial planning? Absolutely not. But if you call a fee-only financial planner (that charges by the hour) they will likely give you a rate over the phone. This gives you something to base an initial decision off of.

I never said I wouldn’t use financial planning.

Insurance is another great example. You don’t need an agent. I wrote about the benefits and costs of having an insurance agent in the past. Bottom line is if you need help because your claim is moving slowly your insurance agent likely can do nothing to help you. This is why I shop for insurance quotes online and go with the lowest reputable quote.

Are there areas of expertise I am willing to pay for? Absolutely. I take major car repairs to a certified mechanic. But I make an informed decision first by doing research on how much the repair should cost, getting quotes from several shops, etc. I still end up taking the car to the mechanic, but I don’t go in blind. Does that not make sense?

These type of plans, from what I’ve read (which again I admit I am not an expert in), revolve around getting a HELOC, depositing 100% of your paycheck into an account that pays down your mortgage as soon as the money hits the account, then you draw off your credit line to fund your living expenses.

This leaves you open to interest rate fluctuations and the possibility that the bank closes or reduces your line of credit (which has been in the mainstream media lately). You are trading one debt for another… and the one you are trading for can have an interest rate that fluctuates grandly. Yes, your overall mortgage balance is likely lower at the end of the month (assuming you spend less than you earn — and Americans are bad at this, apparently) than at the beginning, but you’ve got a credit line floating out there with a majority of the difference funding your living expenses.

Provide evidence to back up your claims. How does your system work? Provide an example. Illuminate me to the mystery system that solves all debt problems.

Steve Orris August 19, 2009 at 8:25 pm

Kevin- Do you walk into a McDonald’s and ask them to prove they use real beef? Do you ask the gas station attendant to prove they are selling real gasoline at the stated octane rating? You want me prove my debt reducing system is not a scam? Prove that it is.

Now, please except my apology for getting that out of my system. It is just frustrating to me that people call something a scam just because they don’t understand it.

You bring up very good points. Can you do something similar to what we can do for you? Can you save a lot of money by using your money differently? Yes. We just make it easier. And we do it better.

Can people file their tax returns by themselves? Yes. Do they? Many people chose not to. With some help they can get more money back and save themselves some time and frustration. Sort of like the mechanic. So can you do something like what we do without paying us? Of course. But most people won’t.

So, I hope you were serious when you offered to take a look at what I sell. Here is a link where you can learn all about it. You don’t need to enter any personal information. And there is no link that goes to any particular independent agent. (I won’t even know you were there.)

[Link removed]

Enjoy your education.

Steven August 19, 2009 at 8:35 pm

@kevin – no, you are self sufficient, and you want to be sold – on something. I’m not selling anything. Personally, there’s too much evidence that shows that most people will be financially well off if they:
1. Adopt a plan that prioritizes mortgage reduction with interest reduction. (no, you’re not trading one debt for another – you’re trading higher monthly interest for lower monthly interest in absolute dollars)
2. Buy life insurance
3. Have a financial plan that incorporates both.

I believe in this – if you have other beliefs, follow them. I’m only saying that this type of plan is easy for most people to follow and is a conservative way of achieving risk-free wealth.

Kevin August 20, 2009 at 6:09 am

Steven the simple fact that you think there is a risk-free way to achieve wealth negates any argument you’ve made here.

I’m not arguing that people aren’t better by paying down their mortgage (“prioritizing mortgage reduction”)… or by buying life insurance… or by having a financial plan.

I am arguing that spending $3,500 for “sophisticated software using algorithms” (please… this reeks of scam) is not a good decision. If you want to track your money like this, go buy Quicken for $70 (2% of the cost), and set up an automatic payment of 100% of your extra income.

That is what this program does for you, but it charges you $3,500 for it ($2,500 of which goes to the salesperson — no wonder they are pushing it so hard).

Kevin August 20, 2009 at 6:07 am

Sorry guys, I’m not biting. Thanks to your continued push I’ve done just a little bit more research and discovered quite a bit of information about the scam that is United First (sometimes called the Jubilee Project, U1st, etc.)

For my readers, here are some great links listing out why this is a scam:
Fat Wallet discussion w/208 comments full of great information
Another FatWallet discussion
Another website breaks down why this is a scam
Another FatWallet Analysis
Another great FatWallet comment about a guy that was getting pushed by a salesperson to use his “tools”

The focus around these things is the salesperson pushes you to say “well most people won’t do that” “most people aren’t disciplined” to make the $3,500 software seem worth it. If they won’t do it on their own what makes you think they will use your software? Because it is completed automated? (Last time I checked I could setup automatic extra payments to my mortgage on my own.)

These programs also disguise the fact that you are using every cent of your extra income to pay down the mortgage. Not only is this perhaps not a good idea for everyone (should you be saving more for retirement, do you want 100% of your money tied up in your house), but you can do that on your own without paying $3,500.

The reduction in principal is tied directly to your extra payments not to having money sitting in an account before you withdraw it on the HELOC.

HELOC = risk. HELOCs have been frozen across the country. Or canceled. Or drastically reduced.

These programs are garbage. Please do not continue to promote them on my blog.

philip August 20, 2009 at 7:15 am

Thanks you Kevin for posting the links for your research into how these are scams. I have been enjoying reading the back and forth going on over this topic. Personally I am surprised that they will not either admit what some of their method is, or just disappear.

FYI, I completely agree with you on your points.

Steven August 20, 2009 at 8:36 am

@Kevin: Ok, possibly you’re fixated on the price that a certain company charges for their system. Quoting your email, ” I am arguing that spending $3,500 for “sophisticated software using algorithms” “…….
Let me stop here and address this: Almost all banks have bi-weekly (traditional) mortgage accelerators that are priced at about $500. In addition, there are several companies who provide the “Australian” model for under $500.

You can easily find them online.

So, if you are saying that the company whose price is $3500 is a “scam” (your description), you perhaps will not think so negatively about those who provide mortgage acceleration systems (traditional bi-weekly or Australian model) – including most banks.

Now, one more thing you should recognize, and it’s a big thing – virtually all the naysayers to any type of mortgage acceleration system are……….MORTGAGE BROKERS!!!!

I’ve checked around and this is universally true. All the loudmouths denigrating any type of mortgage accelerator are mortgage brokers!

Now, if you really want to know what a scam is (IMHO), it’s a mortgage broker telling people not to adopt a mortgage acceleration program (which requires no refi).

This is so obvious – the real “scam” artists are the mortgage brokers (who make a $5000+ commission on selling you a loan. Of course they’re working overtime to badmouth the system – maybe I would, too, if I were one of them (I’m not).

Where is the indignation in that?

Ok Kevin, who are you gonna believe – someone looking to get you into more debt (and make $5000 doing it) – or someone trying to get you OUT of debt and charges under $500??

Steven August 20, 2009 at 9:00 am

@Philip: Please read my last post to Kevin. In one of his posts, he says:
“I’m not arguing that people aren’t better by paying down their mortgage (”prioritizing mortgage reduction”)… or by buying life insurance… or by having a financial plan. ”

Now, first of all bear in mind that I’m in favor of a mortgage acceleration system because it provides a plan that “prioritizes mortgage reduction”

I also know of several good ones that are priced at under $500 – and are easier to use than the $3500 company – I don’t advocate spending that kind of money.

Lastly, Kevin mentions he doesn’t believe in risk free wealth – and that may be his real issue – believing it cannot be. However, using a mortgage acceleration system (I like the Australian model) and buying life insurance ARE the keys to risk free wealth. I can provide proof – to your accountant if you wish. I’m not selling you anything. Then, let HIM advise you – you’ll be quite surprised.

Kevin, if you’re reading this, I extend you the same offer.

Kevin August 20, 2009 at 10:09 am

Steven I highly encourage you to take an Economics or Finance 101 class if you truly believe in risk-free wealth. Risk and reward are a fundamental concept of how the economy works. (For a very basic example, why would anyone invest in stocks because bonds are much safer? You take more risk, you expect more reward.)

Term life insurance also does not lead to wealth. It’s insurance. If you are talking whole policy insurance that is a different ballgame and the math has been proven that you are much better off getting a term policy (for much less) and investing the difference on your own.

In regards to mortgage brokers: you keep moving the target around. First it was “no one has the discipline to do this on their own”, then it was the software is worth the cost, then it was it doesn’t cost $3,500, then it was mortgage brokers are the bad guys.

A mortgage broker wants to get you into a loan and collect his commission up front. That has nothing to do with when you finish the loan. Why would the mortgage broker care if you finished your loan early? His clients would be thrilled and he would get a ton of referral customers. Would he lose out on potential refi business? Sure, but he is risking that anyways. He would be happy to give up a potential refi in return for five referral customers… that lead to five more… that lead to five more (because all these customers are SO happy to be paying their mortgages off early!) This argument does not hold up.

Additionally who said you should use a mortgage broker in the first place? I’m not supporting paying $5,000 for a mortgage broker unless he finds you an interest rate (that you would otherwise not have access to) where you will quickly recover those costs.

Again you are moving the target. It isn’t mortgage brokers that are warning against this. It is the mainstream media, bloggers, financial advisers, etc.

Bottom line: these systems allow you to put every last extra cent you have toward your mortgage. You can do that yourself. (As we have discussed that may or may not be the best thing for you.)

These systems rely on a HELOC to fund your living and/or emergency expenses. You can do that yourself (although it is quite risky because you are relying on a loan for your expenses, and if the bank pulls the loan you are out of luck).

Your argument does not hold up. You have provided no solid evidence. At least Steve Orrin provided some information to me (although it was a ridiculous webinar). You have provided nothing and you have consistently moved your argument around.

Steve Orris August 20, 2009 at 10:39 am

A ridiculous webinar? I could give you far more information and testimonials but what’s the point? Your mind is made up and you would delete the links anyway. Continue helping people your way and I’ll continue helping people my way, somewhere else.

Kevin August 20, 2009 at 11:02 am

Steve here are my issues with the webinar:

  • One long video that you can kind of slide to see different portion of, but pretty much have to listen to the whole thing. A powerpoint show would have been more effective in sharing facts
  • The webinar is designed to create an emotional response from the viewer. The first portion focuses on “can you imagine how great it would be to be debt free”? The on screen information mixed with the voice over is designed to get the potential buyer to feel good about the product in order to get them to spend money.

Interesting that you ignored all of the evidence I have provided about the overall capabilities of the program (the FatWallet forum threads that go through these types of programs and examine if it is worthwhile, discover that it is not, and share that information).

Applying every cent of your additional income to pay down a mortgage is a questionable idea depending on your other goals. I think you realize there is a great deal of evidence against your firm specifically (U1st) and have no hope of not convincing just me, but my readers, that this is a good idea.

Because it isn’t.

Jana October 31, 2009 at 7:25 pm

I’m late to this party, but I am a loan originator for a correspondent bank, and I discourage clients from purchasing this product. Today I googled mortgage accelerator, looking for more education to show borrowers why this is a scam. Thank you for adding your original post, and for linking to the other websites. Very helpful for my clients.

As an LO, I don’t care about the refi – i focus on first time home buyers, mostly with minimal down payments. Therefore 95% of my clients don’t even qualify for HELOCs or unsecured lines of credit. Most of them have very minimal emergency funds. I discourage them from paying any fees for bi-weekly payment services too. Instead, I tell them to set up automatic bill payer in their checking account, and send them links to the charts online at Kiplinger and BankRate to decide for themselves if they want to make 13 payments / year, and how much extra to pay.

It has nothing to do with me upset that they might not refinance. Most of them won’t be eligible for refinance for at least 3 years anyway, they need time to build equity, and for property values to stabilize and hopefully modestly turn around.

That said, I probably get 3 calls a week from U1st and similar program reps, trying to convince me to pay $179 to ‘sell’ their product. First, any company that requires you to pay up front to sell for them, is a huge red flag. Second, there are zero licensing, background check, credit check or interviews to sell this product, which is essentially an expensive financial service – I have to be licensed, a CPA is licensed, and so are Financial Advisors….but not MMA advisors. Weird, isn’t it? Finally, 2 clicks with Google and you can read the Australian SEC’s complaints against MMA’s – especially the ones challenging the financial calculators in their software / online system. Forth – anyone advocating borrowing against a HELOC or unsecured Line of Credit in this financial environment is bat-crazy. Lines are being cut, closed and interest rates hiked. Fifth – everyone has life issues, and putting ALL your discretionary income against your mortgage when you have very little emergency funds to begin with….that is financially irresponsible….leaning towards unethical.

When I get calls about this, I usually pull up the borrower’s loan, and remind him/her of the PITI + MIP. I remind them if they double the “P” it’s not a very big jump in monthly payment, and the life of the loan savings in interest are significant.

Anyway, thanks again for your original commentary.

Don Rutter December 25, 2009 at 3:31 pm

Thanks for the advice and I agree you don’t need to pay for an acceleration program. Question. Do you need to notify your mortgage Co. to apply the extra payment amount to the principal or will they do that automaticly?

Eric January 3, 2010 at 11:19 am


Depending on who has your mortgage it can either be easy or slightly more complicated. My mortgage is with Wells Fargo and I was actually surprised that they prominently mention mortgage acceleration on their website (no fee) and how easy it was to setup one of their plans. I was able to setup my automatic withdrawal to include a principal only payment; I chose a total payment of $1800. The other thing I like about their site is that I can pay online and send any additional principal only payments.
Here is an example of a previous payment:
11/23/09 PRINCIPAL PMT ( Details) $90.00 $247,998.96
11/02/09 PRINCIPAL PMT ( Details) $131.10 $248,088.96
11/02/09 PAYMENT ( Details) $1,668.90 $248,220.06

The 1668.90 is my PI+T($250) no additional “I” for me (zero down VA loan), the 131.10 is the $1800-PIT and the $90 is another web principal only payment I made. It is my understanding from some of my friends that their mort. companies don’t come close to this type of ease of use, as a matter of fact, one of my friends was hit with a late payment because he tried to do a bi-weekly on his own but the bank would not accept anything less than full payment on the 1st (I think the bank offers a PAID bi-weekly program, I would have to ask him).

It was my understanding that some banks will merely hold what you send them (if not on the first) until the first before applying payment so you definitely want to call your mortgage company and ask about their policies.

Judy January 5, 2010 at 11:22 am

Thank you all for sharing such insightful information. I am currently enrolled in a mortgage acceletator program which I pay a one time fee of $39.00 several years ago. To be honest, I was so excited that I was going to be saving so much money over the life of my loan (or so I thought), that I don’t even recall if there is a monthly processing fee.

However, in light of all the knowledge and inforamtion I have received today, I plan to cancel mine and use the example provided to pay my mortgage.


Heath Macie February 10, 2010 at 9:04 am

Seriously… First things first… Stop wasting time reading this and go get EDUCATED. Boo hoo… you bought into something that someone told you was great and you could have been doing this on your own all along. So really… whos fault is it. If you really want to know what “Mortgage Acceleration” is, stop listening to people who don’t know. I have a mortgage that allows me to merge my income and savings accounts to pay the loan off in a little over 11 years. HOW CAN IT BE.. I must be a scam. the government will take your home…. aliens will visit you. Wake up america. REAL Debt acceleration requires you to let your money work for you counteracting the accrual of interest. The real problem is… that everyone wants the american dream and they are willing to do anything to get it. Go into debt, buy stuff that they know good and well that they cannot afford, and once they have money… spend it like it’s their last day on earth. All I’m saying is get the facts. Bi weekly payment programs are NOT debt acceleration. If you would like to know what the real deal is.. feel free to email me.

Kevin February 10, 2010 at 9:16 am

So what’s the magic? What’s the special product?

I’m guessing you pay a majority of your income onto the loan and pull your living expenses out on a HELOC.

I’m not saying doing that won’t work — what I’m saying is you don’t need to pay $3,500 for “special software” to set up the acceleration for you.

The programs also hide the fact that you’re applying every last possible cent you have to your mortgage balance. You have no savings — you are relying on the home equity line of credit if something were to happen and you need savings.

You can setup a HELOC with your bank on your own, and you can apply every last cent you own to your mortgage on your own. You don’t need to pay thousands of dollars for “software” to have someone set it up for you.

Mike O. July 20, 2010 at 8:07 pm

I have a 6% fixed with 22 years remaining. My HELOC is now at 3%. I figured I can pay off my fixed in 1 year and 8 months using weekly payments from my HELOC and my regular monthly from regular income. The HELOC will then be paid off in about 6 years just using a mortgage spreedsheet.

PS: No need to pay for what you can do yourself.

Matt Peebles October 4, 2010 at 4:26 pm

I see a Coldwell Banker banner ad on this web site. So is there a financial benefit to keeping this argument running? Be honest with us.

Keep in mind that everything is free to the person with enough time. You can build your own house, grow your own food, make your own furniture, discover the Theory or Relativity, invent Calculus. It’s all free if you just have enough time and discipline.

Real life is a trade off. People trade time for money and then trade that money for something that required someone else’s time. Our decisions of what products and services are worth trading for are unique to every person. One family trades money for Big Mac’s and another trades it for Organic produce. Both thought their decisions were the best at that time.

If someone sets up an autopay biweekly program for a small fee, that could be the best value for them. If they would have spent 12 months dragging their feet before finally starting it, the cost would have been several thousand dollars for waiting. There’s also the cost of not having the equity available in the event of an emergency. So the value of the program is all relative to the individual.

What is the value of this blog? Why keep coming here to post? Is it worth $120?

Kevin October 4, 2010 at 4:41 pm

You see there is a Coldwell Banker ad on the site. I see your profile is a link to your lending company. Is there a financial benefit to you commenting? Be honest with us.

Re: the Coldwell Banker ad: please Google “Google AdSense”. It is an advertising platform that Google offers. How it works: Google looks at the content of the webpage, and serves up a relevant ad. If this page was about cookie dough you would see ads for cookie dough.

Problem? No? Good.

I find it incredibly funny that you’re attempting to belittle me for blogging and running ads that I have no control over (other than running Google’s ad software) by leaving a comment with a link to your company’s website in the real estate industry.

Really, Matt? Really?

In fact I could remove the link from your comment, but I won’t. I’ll play nice. I just find it odd that you’d make that point while leaving a link to a company that benefits you directly.

Now if you had come here to point out the value of incentives and trade offs, then we’re good. I get where you’re coming from. If someone would never set up automatic bi-monthly payments on their own then yes, of course, they might as well pay for someone to do it for them.

But my blog is not about that. My blog is about educating people on how to do some of these things on their own.

Your points about building your own house, growing your own food, and building your own furniture are theoretically on target, but in reality a bit of a stretch. Unless you know of a house/food/furniture that can be completed with a few clicks within your mortgage company’s billing system.

In other words it would take maybe 5 additional minutes per month to pay your mortgage bi-monthly rather than just monthly. I’m unaware of any home, food, or furniture that can produce that much value in 5 minutes per month.

So yes, it makes sense to have someone build my house for me or grow my food for me. It would take months or possibly years for me to learn how to do it myself, then the actual time invested to do the tasks.

Not the case with the mortgage. Write the extra check and mail it off. Log on to the bill payment system and click submit. Very easy, lots of saving.

Re: the value of my blog: I love the below the belt comments. But know that comments like yours and others that push extraordinarily expensive products (like the HELOC version of mortgage acceleration mentioned above for thousands of dollars) is the reason I continue to blog. There are a lot of garbage financial products out there, and the fact that some readers have found this page and discovered exactly why they shouldn’t use them is more than enough benefit for me.

Thanks for stopping by.

Brad January 22, 2011 at 4:14 pm

All you did was explain a bi-weekly mortgage. A home accelerator merges your checking account and mortgage into one, making it one giant home equity loan. Since HELOCs are adjusted daily the longer your money sits in the mortgage (before writing checks) the more you save on interest.
These loans are often referred to as macquarie loans since they were started by macquarie bank in Australia. CMG mortgage also offers them here in the states. They are great tools for people who are operating at a surplus each month and manage money well.

Landon February 10, 2011 at 2:18 pm

I used the system you described with Wells Fargo mortgage. Initially I made the payments through my online billpay and if a month had 3 Fridays as paydays I skipped one of them. Then I found out they were rejecting the payment because they don’t accept patrial payments. They had me set up an automatic withdrawal with their system pulling it from my account rather than me pushing it to them. I had to be a month ahead on the payment. My bi-weekly payment was $442+/- and I increased it to $500 even. So far I like it better than paying a lump sum once per month. And even though I’m a control freak I’ve grown accustomed to trusting their system. Great article. Thanks

Karen F March 16, 2011 at 9:55 pm

Nice article-I thought about doing a Heloc to pay my mortgage but then the bank froze it!! So now I send extra money when I have it. Someone tried to sell me the $3500 dollar scheme so I did some research and found other ones for alot less but I don’t want to tie up my extra income if I lose my job. I have a 10 year arm that will readjust in 3 years. I tried to refinance it but I’m underwater on the house. Back when I got the ARM I was also a mortgage broker and was amazed at the housing bubble building and the unscrupulous lenders who enticed borrowers into buying homes they couldn’t afford just so they could line their own pockets!!! One of my friends lost her home due to this against my advice so I quit the lending business since no one trusts them anymore. I know not all lenders are crooks but there should be a bunch of CEO’s in prison right now for putting the economy in the position its in right now. Having said that I also tell my friends to always do research and shop around for any loan or even buying anything to get the best deal. Some people are just not good with money and the sharks feed on them but I feel we work too hard for our money to get ripped off!!!! Everyone needs to take a financial class and economics to understand how capitalism works and if there’s a buck to made off the weak and ill-informed then the wheel keeps turning!! Business ethics is non-existant in this country anymore and its very sad. SAVE YOUR MONEY AND INVEST IN GOLD AND SILVER!!!! The dollar will be worth zilch in about ten years
GOD HELP US ALL!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

John April 4, 2011 at 7:52 pm

Hi nice article but what about the “New” Mortgage programs that are now being offered.www.Mygpsformoney.com is one. These somehow play off your Home equity or interest bearing account? Very expensive about $1500 for the program heavy commission and what you to join for $150.00 so you may resell. has anyone seen this?

Chad Brinkman April 11, 2011 at 10:09 pm

The huge thing that is missing from this discussion is that most consumers have approx 7 different debts that they pay on (mortgage, car payment, credit cards, store credits, student loans, etc…)all with different balances, interest rates and minimum payments etc… Without any financial direction or math, the consumer is blindly putting extra money to what? How does the person know they are putting the most efficient and exact (to the penny) amount of money to a debt that most allows that to work for them? Just putting extra money to a mortgage doesn’t account for all the other debts the person has. Software like MyGPSforMoney.com and U1st factor in ALL debt with different terms, balances, and interest rates to get the person COMPLETELY out of debt in the fastest time possible.

I don’t know about some of you, but if you have time to sit down and re-analyze your finances every week or month and re-calculate that – that’s fine…. I would rather use a piece of software for 5 – 10 minutes and head to the beach and just not think about it. Just like in a car…. I could drive without a dashboard and guess at how much gas I have left, or how many miles my car has, or even how fast I was going… or I could just install a guage panel and have it tell me those important things so that I don’t get a speeding ticket, run out of gas and know when to change my oil. Simplify your lives.

Kevin April 13, 2011 at 6:05 pm

So if you’re swallowed in debt it’s okay to stick your head in the sand (at the beach, no less) and hope the problem goes away?

If you have a debt problem you NEED to be looking at your finances a lot. You obviously didn’t in the past. Understanding the math behind your debt is critical to only getting out of debt, but avoiding getting back into debt in the future.

Bill April 13, 2011 at 5:44 pm

What we did (and people who aren’t self-disciplined shouldn’t do this) is take out a HELOC (home equity line of credit). We put every single penny we make into it and then write checks out of it. Thus, it is our checking account. In a traditional mortgage, once you put the money in, you can’t get it out, so the tendency is to only pay the “normal” payment or if you pay ahead, you hold some back for a rainy day. If the rainy day never come, you are holding onto money that could have been used to pay down the house. Also, since we deposit the money as soon as we receive it (or it is automatically deposited) it is lowering the amount owed (priniciple) thus, lowering the amount of interest paid. As a result, we were able to pay off the house in 4 years. But again, this only works if you are self-disciplined. I have had family members who have told me that since I have that money available to borrow against, I should use it to take a vacation or buy a big screen TV, etc. These are not the types of people who should do this. You must have the goal of paying off the house ASAP!!!

Kevin April 13, 2011 at 6:08 pm

What happens when your bank freezes or shuts down your HELOC as happened to thousands of people during the financial crisis? You’re planning to borrow your monthly expenses this month and write checks and all of a sudden you can’t. What happens then?

What allowed you to pay off the house in 4 years wasn’t a HELOC. It was dumping every last penny of your money into paying off the house. If you used a HELOC but only ended up putting $100 toward the house every month (meaning you “deposited” $2000 and “withdrew”/wrote checks for $1900” then you wouldn’t make that big of a dent in the mortgage balance.

Jc December 2, 2011 at 12:18 am

Using a variable rate heloc as a checking account? I will tell you what I have told my customers for years. Equity does not buy bread. You sound like you have the means to manage something that would benefit you so much more and leave you vulnerable to so much less risk. Seriously, has no one read the Federal Reserve book on ARMs? (Have an ARM, I read the book. Did your financial institution even provide it first?)

Bill April 14, 2011 at 7:59 am

I must respectfully disagree. If we had a traditional mortgage rather than a HELOC we could not dump every penny into the house. Since I am self-employed I have quarterly tax estimates as well as an annual contribution to my SEP. By putting this money into the house and then withdrawing it when needed, I was able to reduced that amount of interest paid. With a traditional mortgage I would have held that money back and ended up paying interest on it. Also, as a fan of Dave Ramsey (with this HELOC issue being an exception) I know I need to have an 3 to 6 month emergency fund built up. The same principle applies. And if the emergency never arrives we have taken advantage of the additional funds being applied to the house. Finally, your math is absolutely correct and $100 wouldn’t make much of a dent in the house, however applied the money to the loan as soon as it arrived at our door and we deferred payments until the last day or two of the billing cycle. As such we would get the effect of having most of the $2000 (using your example) applied toward the house. I realize that this requires considerable diligence. We micro-managed the account and lived in a manner that most would consider beyond frugal. So, granted, it was more than the HELOC that allowed us to pay the house off early, but there is no way we could have done this with a traditional mortgage.

Jc December 2, 2011 at 12:10 am

Ok, Lets add some sanity to this very long discussion. Background on me: I used to work for a bank very focused on sales and shareholder equity. I now work for a mutual savings bank very focused on customer service and customer equity. Not here to sell and honestly, this being the internet, you probably don’t qualify for what I offer anyways based on location. I’ll also say I have no idea about the HELOC/Accelerator build wealth programs. I didn’t buy them because well, a horse with a paper towel roll taped to his head is not a unicorn.

Early on, Steve and Steven, appear to be the same guy. Just saying.

Now, any offer that says it will build equity by doing biweekly payments and charging you is not a scam. It does do it. Is it worth it. No. In my 10 years of banking, I’ve never heard of a bank that doesn’t do a simple interest loan(not saying they don’t exist). This means, you can do your own biweekly plan(as said above. If you haven’t discovered your own bank’s online bill pay service. Run to the branch now before paying someone else. Works the same except you have more control)

Now to my make this for the times. Things have changed since this article was written. Google “prime through the times”. Or something similar. It’s very low now. My thoughts: Get a low-fixed rate mortgage right now. That extra you’d put towards it, put towards savings/ira/other non-risky investments(I just don’t prefer to take the risk with my money. My 401k is another story). Build up your emergency funds and retirement money. 5 years ago a CD was paying 5% for 12 months and 4% for 60. History tells the story of tomorrow.

Now: For the 60 y/o with a huge mortgage, most of the ones I’ve dealt with choose it. They have reserves, they have income to pay it and someone finally told them they can do a 15 year mortgage without regards to their age. The old idea of getting rid of debt(especially mtg debt) before retirement is lost now. Especially when you consider that rates are so low(and were still considered low when this article was written.)

And to end, Wells Fargo is who I have my home loan through. Not where I work. They do offer free equity programs. Probably the best I’ve seen. I did my loan with them rather than my bank because I bought a large house that needed a 203k loan. My bank didn’t offer it. The plan doesn’t work for me though coz I’m on a bimonthly pay schedule and wouldn’t save me any money.

Dave Burke February 1, 2012 at 5:09 pm

I see a lot of great conversation about mortgage acceleration. Though I will not comment on everything I read let me just say that Mortgage Acceleration is a methodology…it is not a mortgage type or a loan. Using a 1st lien heloc to implement can be very dangerous but I have seen many people pay off their homes early using it. There are many other ways to implement the methodology with no risks. Every person has its own sets of circumstances and barriers in terms of credit and home equity so getting a heloc is not often available to many wanting to execute mortgage acceleration. I am considered by some an expert on Mortgage Acceleration and have coached vast quantities of people to use it and pay off all of their debt. If you are seeking solutions to pay off your debt as agreed this is probably the best solution I’ve ever been a part of. But do not pay someone to implement this you can learn on your own for free. I am doing weekly webinars teaching families how to do this at no cost. To learn more go to http://www.daveburke.me

jan March 26, 2012 at 12:09 pm

I just spent $27 on a plan that requires you to take out a HELOC. Had he said that up front I would never have bought it. The rest of his plan was trying to sell more of his ebooks and software. I know I can be a naive, hopeful individual, but this really ticked me off. Once of these days I’ll learn.
Has anyone heard of John Schepcoff? He claims to have a great plan, but again never really gives any details.

Dave Burke March 27, 2012 at 9:41 am

Never heard of John. But I created a Mortgage acceleration plan that does not require a Heloc. The program is no cost. I will begin to do weekly online classes soon. If your interested you can goto http://www.daveburke.me

Adam April 3, 2012 at 11:54 am

Avoid John Schepcoff Home Mortgage reduction plan at all costs. This guy is hawking his website and sells you a scam. I bought his plan and he says to wait for 6 months for it to kick in. After 6 months, your plan does not work and there is no refunds!! AVOID JOHN SCHEPCOFF!!!

Dave Burke April 7, 2012 at 5:41 pm


Dave Burke May 13, 2012 at 2:59 am

Ok so now I have put my entire mortgage acceleration class on video so no more excuses you can view them for free on my website http://www.daveburke.me. You do not have to pay a dime to learn it. And you do not have to get a heloc to execute it

James June 10, 2012 at 5:33 pm

that’s not how the program i was offered and am thinking of doing is at all. I came across this while researching on the topic and was wondering if you or anyone else know’s about this program which can be seen at
it sounds good to me, just wondering if anyone has been on a program like this, its not a bi-weekly thing

Dagney August 6, 2012 at 2:54 pm

I teach at a community college and find that I often teach life skills along with reading and math. One of my international students came to me today because she was confused about why her mortgage changed. She brought me the paperwork, and it turns out it was one of those loan accelerator programs. I was shocked when I saw that her mortgage company was charging her a $300 enrollment fee! What a scam. Fortunately, she was smart enough to know that something was wrong, but since the friendly mortgage company didn’t give her an adequate explanation, she came to me.

Connie August 19, 2012 at 7:15 pm

Thanks for the info, Dave. Finally, the fussing is over and we can get on with paying off our homes in less than 30 years. Go, Seahawks!

Sue September 2, 2012 at 6:36 pm

The internet is full of “experts” on every topic imaginable. But people are not the same. What is good advice for one, might not be for another. What one person can do quite easily – another struggles with.

Here’s the thing. If you can pay off your mortgage and debt very quickly on your own… GREAT!

But you are rare – very VERY rare.

You would naturally assume that people who seek out the services of a financial planner are more motivated than the average person when it comes to getting ahead financially, wouldn’t you?

But of all the people that go to a financial planner – only 14% of them are still on track with that financial plan at the end of year one. By year two – another 3% has dropped off. Almost 90% of them fail to stick to their financial plan – and these are the more motivated folks.

EVERYONE can get out of debt on their own. They always could.

Here’s the “catch” though. Just like Kevin pointed out… getting out of debt slowly – versus getting out of debt the fastest way possible, can leave $20K, $40k, $60K, or more, in interest laying on the table. Savings you could have had – but won’t now because you didn’t accelerate that debt fast enough.

So a DIY or spreadsheet program might be cheap or free – but it also could cost you tens of thousands of dollars in lost savings, if you are like the average person and have a hard time disciplining yourself to stay on course.

On the other hand… what if there was a financial management tool that has a great track record (such as 95% of clients have stuck to it after 4 years and the average client getting 20% better results than projected)? If you think that you could stick to something that 95% of other people can stick to… would getting a program like that really be such a “bad” investment?

Would spending $3 on something guaranteed to save you $100 be foolish?

If investing a few thousand dollars helps you stick to your goals and saves you an extra $30,000 – would you be embarrassed at that?

And what if it not only paid off your mortgage, but also paid off ALL your debt and helped you to build a savings or investment account quickly as well?

How about this idea? Isn’t it true that the program only has to save you a little bit more than what you paid for it to justify it’s existence? As long as it does that…. then you basically have a free tool that helps to motivate you to stick to your financial goals as well as some other things like tracking your tax deductions, printing detailed reports for your taxes or doing online bill pay to make life easier.

Why would investing in a technology tool like that be a bad decision?

In my mind (I’m a business person so I look at things differently perhaps), there is spending money on things that don’t improve the quality of your life. To me, that is wasting money (in my opinion).

Then there is “investing” money in things that bring you a “return on investment.” That could simply be that they DO improve the quality of your life in some way; they save you time, they make life easier, or they help you to save more money then you could do on your own.

I see people driving around in new cars all the time. A new car loses $2000-$4000 more in depreciation (by just driving it off the lot) than a used car of similar quality. People spend that extra money for a new car smell, the status of a new car, or perhaps they feel it improves the quality of their life. But one thing it didn’t do…. it didn’t save them tens of thousands of dollars, help them build a college fund for their children, or help them to get a half million dollars or so ahead of where they would have been otherwise.

Some people are highly disciplined with their finances (about 5% of the population), but most people are not. They might not even recognize that they are not.

But some people ARE more aware than others. They have the ability to asses their own strengths and weaknesses. If those people invest money in a tool that they can see will help them to achieve greater results than they have been able to achieve on their own, why would someone else feel the need to belittle them for that choice?

I’m a great cook. I find cooking easy and everyone that eats my food uses words like “amazing.” I don’t think it makes me special. And I certainly don’t think that there is anything wrong with someone that can’t seem to get the hang of cooking. Those people are probably great at lots of other things that I’m lousy at.

Let’s just support each other in our path to achieving greater financial freedom for ourselves, and our families.

James September 14, 2012 at 3:04 pm

Kevin what’s your job?
Just wondering because I use a program like the u1st but its $40 and I can stI’ll save money for retirement and I’ll be done paying my house and all the student loans in 9 years

Sue September 14, 2012 at 5:41 pm

I wonder what Kevin does too – he’s smart. He IS right about the “mortgage accelerator” programs that he describes… they are not doing anything you couldn’t do on your own – because in reality you are simply making one extra payment a year on your mortgage. They really only knock off about 6-7 years and the reason they are set up that way is just to instill a “discipline factor.”

The program I use is quite a bit different. It’s a financial management system that has banking strategies built into the algorithms of the software that actually calculate (like a financial GPS system) the quickest way to zero debt – paying the least amount in interest. The math of this program beats every other program I’ve ever seen and the average client pays off a 30 year mortgage in 7-11 years – not 23 or 24, AND they are paying off ALL DEBT at the same time – not just the mortgage. The difference in savings is obviously a lot more as well… average being over $120,000 in interest savings.

This is why it has won TWO awards, two major banks tried to buy it, and why the company has an “A” rating in the Better Business Bureau.

However what really makes it stand out is the “discipline” factor. 95% retention rate after 4 years – and the average client getting 20% better results than originally projected is HUGE. A lot of my clients have tried other types of programs in the past… and just didn’t stick to them.

Knowing that 95% of people DO find it easy to stick to this is really reassuring to people. They only have to ask themselves… “am I as disciplined as 95% of people?” – LOL.

Also – our program can actually be “free” as the company has a referral / affiliate program. By referring 3-4 other folks to the program – you’ll make more in affiliate / referral fees than you paid for your program. This allows the program to be marketed “virally.”

For those that want to – they can even make a full time income out of it. I have had realtors, mortgage brokers, insurance folks, etc, who were making more with this than with their full time profession.

With the economy crash, people have had a “wake up call” and are realizing that being out of debt and being financially sound is something they want to focus on.

Our company is launching the biggest “attack on debt” this country has ever seen.

Jerry December 6, 2012 at 1:38 pm

I’m looking for a good debt elimination program that works. I bought the John Commutta get out of debt program and it is not working for me. I guess I just wasted more money. Does anyone have any suggestions? Does Mortgage acceleration really work?

Alix December 6, 2012 at 1:42 pm

I have researched many programs out there and the best that I found is a program called debt eliminator plus. I believe it sold for $3500 at one time but I did not have to pay for it. Im not sure if it’s a limited time thing or some sort of beta test but it is working really well for me. Software and videos. I believe you can still get it for nothing. The last time I checked the website address was http://www.debteliminatorplus.com

Jerry December 6, 2012 at 1:43 pm

Thanks ALIX!

James December 7, 2012 at 8:43 am

Hi Jerry,
Check out myliberte.com

I’m not going to try and convince you just look and see for you’re self

Joshua January 29, 2013 at 6:27 pm

Just because you can do something yourself, and others charge to do it for you, doesn’t make it a scam or a rip.

Of course you can make the extra payments yourself. Just like you can eat healthy, exercise regularly, or mow your own grass, all by yourself without anyone’s help.

People pay for external accountability all the time, in the form of dieticians (should be replaced by google?) DVD’s on how to work out (like P90X), or hire people to mow their grass for them.

Your argument is based on the concept that because someone else is charging you to do something that you can do for yourself, then it’s a rip or a scam.

Wrong. Dumb.

The idiots that mock others for buying “accountability” do so in their own lives, all the time. Hypocrite much?

Planet April 7, 2014 at 5:57 pm

What you failed to mention is that some mortgage companies pay or waive the fee for you. Mine did and I have been grandfathered in ever since. My mortgage company does not allow me to split my mortgage in half so I don’t have one big payment during one paycheck. The accelerator program does all ow me to do that which is easier on my budget. I recommend doing more homework before you write something like this and include all the alternatives.

Mimi August 16, 2014 at 2:42 pm

Thanks for your explanations; very effective and eye opening. I just talked to a company that asked me to pay $300.00 enrollment fees for the program and $5.42 monthly. Perhaps, they have increased their enrollment fees.

Trevor Bennett May 26, 2015 at 8:02 pm

Hey thank you so much for writing this article I was about to make a really stupid mistake

Sue May 28, 2015 at 9:58 am

Joshua is right… I DO work for a company that sells a financial management system… it’s not just “mortgage acceleration” because it’s really a cash flow management system, accountability system, and it pays off any kind of debt… some clients buy it to eliminate student loan debt so they can qualify for a mortgage.

We have well over 70,000 clients and an “A+” rating in the Better Business Bureau.

Can people do it on their own? Sure. But paying off long term debt is not like horseshoes or hand grenades… paying off debt slower can cost you tens of thousands in unnecessary interest.

So let’s pretend you spend $3000 for a software system that helps motivate you to stay on track, reduce impulse spending AND that calculates the math EXACTLY to insure you are paying off the debt in the way that saves you the most, without putting you at risk (in reality, you might even earn an extra few hundred a month referring other clients so the system could easily cost you nothing in the end). But for the sake of this example, let’s pretend you never refer anyone.

Over the life of the average debt pay off… doing it yourself you’d have to be within about $20 of the RIGHT number, every month, to justify not buying the tool to do it the exact RIGHT right. How accurate is your math… how disciplined are you to sit down every month to do calculations? How are you doing with controlling impulse spending? how DISCIPLINED are you (because if you are really disciplined… why do you have debt or why aren’t you already make great strides toward paying it off?)

The closest I’ve ever seen a client come with his own “do it yourself” plan was still a little over $6000 short of what our program would save him. It took him over 40 hours to make those calculations… took our program seconds. He did this to PROVE to me that he could do as good a job as our program. At the end… he bought ours.

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