| u want to own your home free and clear and you | | | | they will deduct the money automatically, either from |
| know that you are years away from being able to do | | | | your bank account or from your paycheck. This will |
| it, then you should check out a mortgage accelerated | | | | help you make the payments whether you "want to" |
| ownership program. These programs will help you to | | | | or not, because they are coming directly out of your |
| pay off your mortgage faster by adding one interest | | | | cash flow before you even see it. |
| free monthly payment to the premium to your | | | | Because there are an extra two paychecks in this |
| payments each year. This one payment can really add | | | | kind of plan, the balance of those two payments goes |
| up, especially since the payment goes entirely to your | | | | directly onto your mortgage, reducing your debt. This |
| principal and not to the interest on your mortgage | | | | can take a good deal of time off of your mortgage, |
| account. | | | | especially if you are settled into a 30 year mortgage |
| So how does it work? The theory behind the | | | | already, and are looking for ways to shave off a |
| mortgage accelerated ownership program is simple | | | | couple of years. |
| and easy to understand. Start with this: | | | | If your bank or lender does not have an accelerated |
| There are 52 weeks in a year. | | | | mortgage repayment program, then consider doing it |
| You are paid (in most cases) every 2 weeks. | | | | yourself. You should write out a check for half the |
| That means that you get paid 26 times in a year. | | | | amount of your monthly mortgage payment every |
| In most cases, you take your 2 paychecks a month | | | | time you get paid without fail. If your bank will not let |
| together to pay for your mortgage. | | | | you send these checks in individually, then hold onto |
| So you pay your mortgage 12 times a year - that's 24 | | | | your first check until you can send both together. Send |
| paychecks. | | | | them two at a time rather than waiting and writing out |
| Where do the other two paychecks go? In most | | | | one every other paycheck, or you may start to allow |
| cases, nowhere. Those two "extra" paychecks get | | | | yourself to slide back into only 12 payments a year. |
| placed into a savings account or worse yet; they are | | | | Also check with your bank to make sure that you will |
| spent as soon as they come in since they are "extra". | | | | not be penalized for making an extra monthly payment |
| With a mortgage accelerated loan program, however, | | | | during the course of the year. If they are charging you |
| those two extra paychecks go right onto your | | | | heavy fees for paying "too much" on your mortgage, |
| mortgage to create a 13th monthly payment every | | | | then it might not be worth the money that you put onto |
| year, dropping your principal balance by the full amount | | | | your premium because of the high cost. If this is the |
| of a month's mortgage payment. | | | | case, then you might want to consider refinancing to |
| There are several ways to do this kind of program, | | | | get rid of this stipulation. You will still have to pay the |
| one of which is to simply add a certain amount to your | | | | fees for an early repayment, but it might be less if it is |
| own monthly payment all by yourself. The problem | | | | done all at once, at least. |
| with this is that because you are not enrolled in any | | | | Another option, especially if you like your bank, is to |
| special program with your bank, you might be tempted | | | | warn them that you plan to refinance because of the |
| to slack off when there are other better things to | | | | high fees on extra payments. Ask if they would be |
| spend your money on. Unfortunately, it seems as if | | | | willing to waive those fees in return for the continuation |
| there is always something better to spend your | | | | of your patronage. They might not agree, but it is |
| money on than extra mortgage payments, and the | | | | always good to ask, and you might get just what you |
| "program" simply doesn't work unless you are | | | | are asking for if you talk to the lending division and |
| dedicated to making it work. | | | | make your position clear. With no extra payment |
| A better option is to find out from your bank if you can | | | | penalties, your mortgage accelerated loan program or |
| enroll in a mortgage accelerated loan program through | | | | the decision to accelerate your payments will help you |
| them. They will either bill you every other week for the | | | | own your home free and clear much earlier. |
| amount of half your normal mortgage payment, or | | | | |