Mortgage-accelerator Loans Come to the U.S.

They’re already common in Australia and the United Kingdom, but are new in the States.  This is not the bi-weekly mortgage loan payment schedule that shortens a mortgage by paying the equivalent of an extra payments once a year (on the merits of how to do this, read this); instead, the mortgage-accelerator loan has borrowers deposit paychecks into a special account set up to allocate every unspent dollar to the loan balance.

The benefit to this program is being able to earn the mortgage interest rate on unspent cash deposits.  Hence, money not needed to pay bills reduces the mortgage balance, which has the effect of reducing the interest expense.

Two firms offering these mortgages in the U.S. are Macquarie Mortgages USA and CMG Financial Services.  You can learn more about the concept of this type of mortgage by reading this article at bankrate.com

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