Comments on: Avoid Mortgage Accelerator Programs Like the Plague http://www.nodebtplan.net/2009/04/01/avoid-mortgage-accelerator-programs-like-the-plague/#utm_source=rss&utm_medium=rss&utm_campaign=avoid-mortgage-accelerator-programs-like-the-plague A personal finance blog teaching you how to live debt free and use credit wisely. Fri, 10 Feb 2012 15:18:07 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Dave Burkehttp://www.nodebtplan.net/2009/04/01/avoid-mortgage-accelerator-programs-like-the-plague/#comment-223342 Dave Burke Wed, 01 Feb 2012 23:09:33 +0000 http://www.nodebtplan.net/?p=2374#comment-223342 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 www.daveburke.me 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

]]> By: Jchttp://www.nodebtplan.net/2009/04/01/avoid-mortgage-accelerator-programs-like-the-plague/#comment-202284 Jc Fri, 02 Dec 2011 06:18:58 +0000 http://www.nodebtplan.net/?p=2374#comment-202284 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?) 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?)

]]> By: Jchttp://www.nodebtplan.net/2009/04/01/avoid-mortgage-accelerator-programs-like-the-plague/#comment-202280 Jc Fri, 02 Dec 2011 06:10:11 +0000 http://www.nodebtplan.net/?p=2374#comment-202280 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. 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.

]]> By: Billhttp://www.nodebtplan.net/2009/04/01/avoid-mortgage-accelerator-programs-like-the-plague/#comment-140012 Bill Thu, 14 Apr 2011 12:59:50 +0000 http://www.nodebtplan.net/?p=2374#comment-140012 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. 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.

]]> By: Kevinhttp://www.nodebtplan.net/2009/04/01/avoid-mortgage-accelerator-programs-like-the-plague/#comment-139927 Kevin Wed, 13 Apr 2011 23:08:19 +0000 http://www.nodebtplan.net/?p=2374#comment-139927 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. 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.

]]> By: Kevinhttp://www.nodebtplan.net/2009/04/01/avoid-mortgage-accelerator-programs-like-the-plague/#comment-139926 Kevin Wed, 13 Apr 2011 23:05:06 +0000 http://www.nodebtplan.net/?p=2374#comment-139926 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. 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.

]]> By: Billhttp://www.nodebtplan.net/2009/04/01/avoid-mortgage-accelerator-programs-like-the-plague/#comment-139924 Bill Wed, 13 Apr 2011 22:44:40 +0000 http://www.nodebtplan.net/?p=2374#comment-139924 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!!! 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!!!

]]> By: Chad Brinkmanhttp://www.nodebtplan.net/2009/04/01/avoid-mortgage-accelerator-programs-like-the-plague/#comment-139657 Chad Brinkman Tue, 12 Apr 2011 03:09:12 +0000 http://www.nodebtplan.net/?p=2374#comment-139657 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. 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.

]]> By: Johnhttp://www.nodebtplan.net/2009/04/01/avoid-mortgage-accelerator-programs-like-the-plague/#comment-138861 John Tue, 05 Apr 2011 00:52:44 +0000 http://www.nodebtplan.net/?p=2374#comment-138861 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? 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?

]]> By: Karen Fhttp://www.nodebtplan.net/2009/04/01/avoid-mortgage-accelerator-programs-like-the-plague/#comment-136158 Karen F Thu, 17 Mar 2011 02:55:50 +0000 http://www.nodebtplan.net/?p=2374#comment-136158 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!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 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!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

]]>