The Home Loan Buzz on Accelerator Mortgages

With the mortgage accelerator program, homeowners don't need a conventional home loan to buy or refinance property. Instead, they borrow using a home equity line of credit (HELOC)). For example, they might use a HELOC to acquire a second home, or do a refinance home loan (and pay off) their existing mortgages. When you use a line of credit, it works almost the same way as a credit card. If you don't use your available credit, you don't pay interest on it. You only pay interest on the amount of money you actually borrow. Otherwise, your credit remains available for you to draw upon as needed.

How the formula works

Those who use the accelerator formula begin each month by depositing their entire paycheck into the HELOC account. The mortgage portion is taken out first, reducing interest charges that might otherwise accrue over the month if they waited to pay the mortgage at the middle or end of the month.

Drawing from the line of credit as needed then covers other household expenses, such as groceries and utility bills. If you make more money than you spend, the extra money deposited stays in the account and works to pay off principal, rather than languishing in a low-interest checking or savings account.

The program is best suited for those who make more than they spend each month, because all their available cash is constantly working to either shorten the days that interest is charged, or pay off principal. Before long, the principal is reduced to nothing, and interest payments stop completely, because the entire house is paid off in full.

One out of every four homeowners in the UK uses this system, but it's still new in America. If you're interested in examining the options that an accelerated mortgage home loan refinance or purchase program represents, ask a home loan specialist to give you a detailed overview of the program. Compare it to the savings you can gain from a conventional mortgage, and you may find that you're an ideal candidate for accelerated mortgages.