Types of Mortgage Acceleration
However, another type of mortgage acceleration concept appears to have been embraced by a variety of financial institutions and intermediaries, which offer products such as methods, software, mortgage-linked checking accounts, and home equity line of credit loan facilities advertised as being capable of assisting in achieving mortgage acceleration, and available at a range of premiums.
Most of these “mortgage acceleration” (also called “mortgage reduction”, “interest reduction” or “debt reduction”) programs or software are based on a trick.
The basic claim made is that by using a particular type of loan in a particular way (often following a “program”), the borrower can cut many years off the mortgage without making additional repayments – or similarly, that although additional payments are made, the savings increase significantly due to the use of a particular loan and/or strategy.
The concept usually involves a type of loan that allows the borrower to use the loan as their day-to-day transaction account. This loan may refinance the entire mortgage, be in addition to the mortgage (requiring regular transfers to the mortgage) or in some cases involves an “offset” account, that sits separately to the mortgage but offsets interest on any deposit against the mortgage interest.
Read more about this topic: Mortgage Acceleration
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