Numerous companies frequently advertise that they can help you pay off your mortgage quickly. These programs, which are known by several names, most commonly "mortgage accelerator", state that they can cut as much as 10 years from your thirty year schedule. All you have to do to reap the rewards of their system is to apply by paying a hefty fee. Is it worth the expense?

These programs essentially offer what is known as a biweekly loan. The mortgage company will charge you a few hundred dollars to enroll in their plan, in addition to a fee every 14 days. By signing up, you agree to let them take one half of your mortgage payment out of your bank account every fourteen days. The plans do work as advertised, but not because of any monetary magic used by the companies that provide the programs. The plans work because you are making extra payments.

There are fifty-two weeks in a calendar year. By taking half of your house payment out of your bank account every fourteen days, you are making thirteen full payments each year, as opposed to the twelve you were making before. By making an additional payment every year, you are paying back your loan principal sooner and lowering the amount of interest that will be added to the remaining loan balance. This will, over time, take a number of years off of the time it takes to pay back your home loan.

Are these plans worth your while? They might be, but only if you are somewhat lazy. It is not required to sign up for a plan or pay upfront and pay monthly fees to exploit this method of debt repayment. Almost any lender will allow you to pay extra funds at any time, for any reason. All you have to do is note that the extra cash is to be applied to the mortgage principal. Quite a few lenders provide a place on the coupon that you put in the mail or use on their Internet site for that exact purpose. You may mail in some extra cash each month, or you could send in one additional payment each twelve months. The net result is the same either way.

If you are curious about making additional payments towards retiring your mortgage early, all you need to do is call your mortgage company and ask what opportunities might be available to you. You will likely discover that any one of a number of free options are there.




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