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DIY: Mortgage Acceleration

  1. The decision should be made if you can benefit from Mortgage Acceleration. The following three conditions are necessary conditions:
    1. You have a mortgage.
    2. You have a HELOC still in drawdown phase.
    3. You also have a stable incoming check every month.
    Stop here if either condition is NOT met.

  2. A copy of Mortgage Acceleration software will help you out tremendously. This is not as critical as the conditions in first step. In the forum, we have listed a few software including one FREE.

  3. Read this article on mortgage acceleration reseach. Get yourself familiar with the concept. If you are not a disciplined person, you can stop here now.

  4. Deposit your income into HELOC as soon as you get it. Any penny you saved into HELOC will save your interest.

  5. All your monthly expense is paid from the HELOC. The later you pay the more interest you save. However, please pay before due date. Since the interest saved is minimum compared to late fee.

  6. This is most exciting step. The software from time to time, will ask you to transfer money from HELOC into primary mortgage.

  7. Keep going until mortgage is paid off.

The third step is not optional. Both Mortgage interest and HELOC interest change after a few years. Especially HELOC interest can vary dramatically from year over year, or month to month. The software is the key to steeling yourself in changed situation. In our web site, we have detailed cases studies. You can do the same with your particular situation and you do this every time your rate changes. You can benefit tremendously from doing this.

And the last point is to emphasize the importance of financial disciple. In some extends, mortgage acceleration share some similarity with option ARM. They save money for homeowners with discipline. However, in real world, so many people get into trouble with option ARM suggests mortgage acceleration is not for everyone. One main failure with mortgage acceleration will be using HELOC as an ATM. This is doomed to fail and should be avoided.

Peter Lewis is a senior software manager working for an asset management firm. He enjoys working with numbers and computers (read nerd). Lately when he is not working with numbers, he also likes to write article.

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