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Subject Author Date
Converting mortgage to Equity Accelerator Matt 09-22-2006
Posted by Matt on September 22, 2006, 12:54 pm
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 After 3 years, I have converted a 30-year fixed rate mortgage payment
from monthly payment to bi-weekly "Equity Accelerator" payments.
Rather than paying with Bill-Pay, these will now be deducted
automatically from my bank account. Has anyone dealt with this before
and figured out what changes to make in Quicken? (Q2007 Premier)

Posted by John Pollard on September 23, 2006, 4:32 pm
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> After 3 years, I have converted a 30-year fixed rate mortgage
> payment
> from monthly payment to bi-weekly "Equity Accelerator"
> payments.
> Rather than paying with Bill-Pay, these will now be deducted
> automatically from my bank account. Has anyone dealt with
> this before
> and figured out what changes to make in Quicken? (Q2007
> Premier)

I had never heard of "Equity Accelerator" before your post; what
I found when I looked it up on the internet sounded suspiciously
like a scam. Why would someone pay fees to make extra principal
payments?

It sounds to me like you would be better of computing the amount
of extra principal you can afford to pay each month, and adding
that to your regular loan payment and save yourself the fees.
(A practice which you can change unilaterally at any time with
no hassle ... should you become cash strapped).

In any event, if the formula for computing interest is the same
formula used by Quicken, you should be able to modify the loan
characteristics to correspond to things like changes in payment
frequency, or additional principal payments and have Quicken
create a corrected loan payment scheduled. You can make a
backup of your file then experiment with those changes, noting
the differences in the loan payment schedule ... planning to
revert to the backup if your experiments don't yield useful
results.

--
John Pollard
First initial underscore Last name at mchsi dot com
Please reply to newsgroup



Posted by DP on September 23, 2006, 6:54 pm
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>> After 3 years, I have converted a 30-year fixed rate mortgage payment
>> from monthly payment to bi-weekly "Equity Accelerator" payments.
>> Rather than paying with Bill-Pay, these will now be deducted
>> automatically from my bank account. Has anyone dealt with this before
>> and figured out what changes to make in Quicken? (Q2007 Premier)
>
> I had never heard of "Equity Accelerator" before your post; what I found
> when I looked it up on the internet sounded suspiciously like a scam. Why
> would someone pay fees to make extra principal payments?
>


For what it's worth, my sentiments exactly. I think you've been scammed
You could have done what the "accelerator" is doing on your own. Just put in
an extra amount in your monthly payment so that it comes out to the equiv of
making 13 payments in 12 months.
What are you being charged for this "accelerator"?

I'd never heard that term before, but I have had people cold-call me
offering their service, through which I would pay them twice a month and
they would "accelerate" my mortgage payoff.
There must have been some kind of charge for their service.If you don't know
what the charge is, you should find out quickly.

If I sound harsh and preachy, it's only because it ticks me off that people
still pull this scam off. And I also think you should act quickly to get
yourself out from under this thing. I suggest you do some internet
searching yourself if you don't believe us.











Posted by DP on September 23, 2006, 9:22 pm
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> After 3 years, I have converted a 30-year fixed rate mortgage payment
> from monthly payment to bi-weekly "Equity Accelerator" payments.
> Rather than paying with Bill-Pay, these will now be deducted
> automatically from my bank account. Has anyone dealt with this before
> and figured out what changes to make in Quicken? (Q2007 Premier)


Upon further review:

1) I jumped to the conclusion that you are using a third party to handle
your mortgage acceleration. Is that in fact what you are doing? Or is the
original mortgage holder doing the acceleration? Or is this something you
are doing on your own? The problem comes in when a third party gets
involved, because they are charging you for something you could do on your
own by simply paying additional principal with each monthly mortgage
payment.

2) I may have overstated when I said it was a scam. What I meant was the
third party is charging you a fee to do something you could do on your own.
You're making uncessary payments to the third party. Scam or not, it's not
necessarily a good deal.
One accelerator I looked at just now charges $195 up front and it wasn't
clear to me how much of the biweekly payment they would be taking as well.
Do you know what the fees are on your acceleration program?
Also, here's a brief mention of such programs on the Bankrate site:
http://www.bankrate.com/brm/green/mtg/basics7-2a.asp?caret=36




Posted by Matt on September 24, 2006, 12:14 pm
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I agree that I am paying for a service that I could be doing on my
own, but I think that as Bankrate states, this is a good budgeting
tool, and I am paying for convenience. The fees are negligeable
relative to the size of my payments (0.6%). The savings are much
greater. The upfront fee was $45.

I did do this manually on a previous mortgage, and when the house was
sold I found that the bank had not credited my early payments to
principle as I had anticipated. There are hidden tricks that banks
have to take advantage of customers, such as debiting an account prior
to crediting deposits made the same day in order to charge overdraft
penalties, even though funds were deposited to cover. I just don't
trust the banks to properly credit my account, but since this was sent
to me under the authorization of the bank -- with everything written
out, I accepted it.

Thanks for the advice.


>
>> After 3 years, I have converted a 30-year fixed rate mortgage payment
>> from monthly payment to bi-weekly "Equity Accelerator" payments.
>> Rather than paying with Bill-Pay, these will now be deducted
>> automatically from my bank account. Has anyone dealt with this before
>> and figured out what changes to make in Quicken? (Q2007 Premier)
>
>
>Upon further review:
>
>1) I jumped to the conclusion that you are using a third party to handle
>your mortgage acceleration. Is that in fact what you are doing? Or is the
>original mortgage holder doing the acceleration? Or is this something you
>are doing on your own? The problem comes in when a third party gets
>involved, because they are charging you for something you could do on your
>own by simply paying additional principal with each monthly mortgage
>payment.
>
>2) I may have overstated when I said it was a scam. What I meant was the
>third party is charging you a fee to do something you could do on your own.
>You're making uncessary payments to the third party. Scam or not, it's not
>necessarily a good deal.
>One accelerator I looked at just now charges $195 up front and it wasn't
>clear to me how much of the biweekly payment they would be taking as well.
>Do you know what the fees are on your acceleration program?
>Also, here's a brief mention of such programs on the Bankrate site:
>http://www.bankrate.com/brm/green/mtg/basics7-2a.asp?caret=36
>
>

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