f you haven’t yet heard of “mortgage acceleration,” you will hear of it soon. It is creeping across the country (and somewhat internationally) like a slow burning grass fire. When it reaches the hills and the winds pick up, flames will leap 100 feet into the air.
Mortgage acceleration is technically any methods or techniques that achieve paying off your mortgage principal sooner than scheduled on your 30-year or 15-year note. However, most people use the term to refer to a single technique that draws from the equity in your home to acquire a lump sum to apply to the mortgage principal. In effect, by cycling your equity, you’re reusing the same money you made payments with the first time around, only this time to make a lump sum payment.
Aside from the cleverness of using the same dollars twice, this technique also cancels mortgage interest at an inspiring rate. I employed equity cycling four times in a 2-year period, using only $5000 from my home equity line of credit (HELOC) each time. Paying down $20,000 additional principal with the same dollars we’d used to pay month after month in a more pedestrian manner cancelled nearly $70,000 interest off our mortgage principal and interest pay back.
You can see how following a practice similar to this for a period of several years could completely eliminate home mortgage debt in 5-8 years, depending upon the price of the house and the spread between the buyer’s income and usual monthly expenses.
There are quite a few companies selling software to manage the equity cycling process. Not to deliberately leave anyone of them out, here are a few names you might recognize. United First Financial (aka UFirst) sells a product called the MMA (money merge account) through a multi-level marketing structure for $3500. Sydney Financial Group’s software also goes for about $3500. CMG Mortgage Services sells a similar product; though, their website is not working right now so I can’t confirm the price. Other companies, such as The Mortgage Miracle, represent one of these bigger players, in this case Sydney. UFirst is alleged to have about 30,000 independent sales reps. Norm and Mike, typically referred to as “the two guys from California,” sell a software product for $1295.
A few people are achieving the payoff of equity cycling without the benefit of software. There are books on the subject such as Harj Gill’s “Own Your Home Years Sooner” and John R. Barker and Lin Ennis’s Let Your Mortgage Make You Rich! There are a handful of eBooks that claim to explain the technique, but not every Internet marketer is a writer, so all books are not created equal.
It could also be said no all equity cycling software programs are created equally either. Though I have personally not seen any that don’t work, do not assume they are identical. Unless they’re from the same parent company, regardless of the name of the outfit selling them, they are not exactly alike in every way.
And if you’d like to see how much the equity cycling software might benefit you, go to http://info.equitycycling.com and click on “Free Analysis.” It’s the fourth button across the top under the Equity Cycling logo.