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jasonreed · Joined: 07 Nov 2007 Posts: 1 3.02 Dollars($)

i am interested in the homeownership accelerator program offered throuhg cmg, but cannot find much information on it. sounds to good to be true. actual unbiased customer reviews would be great.

jenkin7

Hello Jasonreed,

CMG's Home Ownership Accelerator program or Mortgage Accelerator shortens the time period for paying off mortgage by using home equity borrowing and borrower's pay checks.

You will find more information on this program here http://www.mortgagefit.com/predeal/about5964.html

Guest

hi all,

I am a participator in this mortgage accelerator or homeownership accelerator program. It is an excellent plan. I make payments twice a month and pay more towards the principal. It saves a lot of money in interest.

Guest

I heard that they charge you for setting it up and require some processing fees per payment. If that is it, then it is not a good idea at all.

But you may go for it if that suits you.

Posted: Thu Nov 08, 2007 11:19 am Post subject:

Groan! Think of this A LOT before paying the fee. Charge around here is $3,500 but it's paid from the HELOC so "it's not real cash".

Program gets an "A" for a slick sales pitch. Uses the old "bankers secret" implication to get the marks hooked and does well in diverting you from asking the logical question - "why am I using another debt instrument with a higher interest rate for this?"

Sure you reduce the amount of interest paid over the life of the loan by making additional principal payments == no rocket science there. Laudable goal but why not do what most people do use a money market account where you are EARNING, not PAYING, interest on the "checking account" and gee, there's no front end fee.

a1sundevilsfan2 · Joined: 01 Nov 2007 Posts: 32 14.61 Dollars($)

Please don't get me wrong!! I do want to pay my house off as early as possible... AND, I am NOT totally against this type of program.

However, I have a problem with borrowing money to pay off a debt....Guess I am old school...

Second, your putting ALL your money into a firm/corporation...whatever.... and hoping they manage your money appriopriatley. And not throw it away.....

There are ways to do this without paying a dang fee as the guest above indicated.... I would research that more than this system....

just my 2 lincolns worth....

Peace

a1sundevilsfan2 · Joined: 01 Nov 2007 Posts: 32 14.61 Dollars($)

Done a little research on the matter since my last posting.

Again, I am not opposing this approach.... Nor am I supporting it..

I just want ALL the facts and get past all of the fluff and slick advertisments.. So, I can make an educated decisions for my situation.

One thing to keep in mind is read the fine print... I try to remind myself this everyday!!

Anyway, heres an article in which I found that maybe useful in your situation..

"http://articles.moneycentral.msn.com/Banking/HomeFinancing/ANewWayToP ayOffYourHouse.aspx"

link edited per forum rules

livinginnky · Last edited by livinginnky on Fri Nov 09, 2007 5:40 pm

This program like most accelerated payment programs are just smoke and mirrors. It is an expensive way to get you to budget your finances better.

There is no magic in the payoff it is simply paying extra to your principle. The heloc's that go along with these are useless and can cost you more than paying the 1st mortgage directly.

As far as the fine print goes... these types of companies boldly lie in huge print... the fine print is irrelevant.

Let me know if you have any other questions.

a1sundevilsfan2 · Joined: 01 Nov 2007 Posts: 32 14.61 Dollars($)

First, I appologize for the link to the article.. It didn't occur to me that is a violation of TOS... It wont happen again....

livinginnky, I was thinking that it was a smoke and mirrors.... But, I wanted to get more info. before I jumped to conclusions.

livinginnky · Posted: Fri Nov 09, 2007 3:22 pm Post subject:

No problems whatsoever, how could you have known.

I personally think it is more than smoke and mirrors and it is funny because a major radio talkshow host was talking about United First Financials version today in fact. I say it is more than smoke and mirrors because these companies flat out lie as well as bend the truth.

I would be willing to help you with any math or questions you may have about the process.

kpatrick

Hi Jason,

I wrote an article on bi-weekly payments in my blog last week on this very topic...here is the short & sassy version...

The deal is that you have to pay your bank or an appointed marketing company $300-$400 to set you up on a bi-weekly payment plan. It also stipulates that you'll be billed another couple bucks each time you make a payment, OR they may give you the option to pay nothing up front but every bi-weekly payment will be assessed a higher per-payment fee.

This plan will have you paying half your monthly mortgage payment every two weeks. That's the equivalent to 26 half-payments in a year, which when divided by 2 equals 13 payments per year. At the end of year, the marketing company, on behalf of your bank, makes one additional payment toward your mortgage.

So the end result is that you pay 13 months in a 12-month period. But because the bank doesn't make the extra payment till the end of the year, the bank held some of your money all year long and got rich off the interest.

Here's what you should do instead. Keep making monthly mortgage payments and add one-twelfth extra in the additional principal box on your monthly coupon. So if your monthly payment is $1,200, take that amount divided by 12 and the amount is $100, so each month you pay $1,300 instead.

For the full article, check out my blog; and I hope this helps!

Cheers,
Kim

livinginnky

kpatrick,

That is a good idea. And that is similar to how I show that these mortgage accelerator programs are useless. They say that with their very expensive products you can pay off your mortgage faster. Well as you are showing you can pay it off faster every month on your own. Or you could pay $100 extra in January, $500 extra in July, $300 in August, etc. etc. It doesn't matter how you break it down... the fact is... whenever you pay extra to principle you are shortening your total interest payments. I like to add that this does not change your interest rate just the amount you pay. There is no such thing as effective interest (it was made up by trolls like these companies trying to sell bunk products).

It's not complicated or rocket science. You simply pay the extra when you have it. Doesn't take a genius to figure that out.

a1sundevilsfan2 · Joined: 01 Nov 2007 Posts: 32 14.61 Dollars($)

I like livinginky and kpatrick's approach.... clean and simply AND you don't pay a start up fee!!

Hey kpatrick, I love your blog!! Its well written and organized well.

Guest

this is not a biweekly payment plan.

evolovik26

Here is the biggest thing about all this accelerated plan mambo jumbo.
Americans and people in general are procrastinators and cant manage their credit. If given an opportunity to take on more debtload they do. Just thinkof how much more money you would have left if you never paid interest on all that long term/short term debt you have. People spend thier entire lifes paying the "minnimum payments". This type of program forces a person to payoff their debt rather then to pay just the interest so it seems like you take care of debts faster. Anyone with a positive cashflow can do the same thing for free but they dont. So you can call the setup fee - a tax on mathematically challenged. Its the same concept as a credit card - if you pay it off each month you dont pay interest. (but who does that?) The setup fee is simply a fee for a financial advice wich alot of people need nowdays.

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