Hi Greg:

      I read your post with a lot of interest.  I am in a position of considering doing this type of Mortgage Checking Account. 

       My wife and I live well below our means and always have extra money left at the end of the month.  It seems that if we can cut off 15 to 20 years off our mortgage (we are only two years into a 30 year mortgage right now), then it would be a smart thing to do.

      I read your post carefully . . . and my main concern was whether this "Scheme" was a scam or not.  I know that you mentioned that this plan does not address other mountains of debt and this may be true.  But, for our family . . . we have no other debt.

        Hence, I would like to find out about this MCA's validity for a family like mine--who has a 30 year mortgage and no other debt.  Do you know if the MCA type plans will really cut off 15 / 20 years off our mortgage?  We just don't want to be scammed to the tune of $3500.

        Any insights you can provide that is specific to our family's situaton would be appreciated.

      Thank you in advance.

 longtang

Dear Long,

I can't say if any specific MMA is a scam or not.

I can say there are less expensive and more goal oriented ways to achieve even better than the 15/20 years mortgage payoff claimed by MMAs.

Since you have no other debts and your spending is under control, achieving your desired debt-freedom goals should be a cinch.

Use my Demonstration software discussed in my Free Lesson 1 downloadable from:

http://www.debtintowealth.com/stretcher.html

to compare MMAs and another perspective.

Greg

Jeez...

whatever happened to common sense and basic financial lessons? 

ETA: this is not directed to any posters, it is directed at the idea of this MCA 

rolo:

whatever happened to common sense and basic financial lessons? 

ETA: this is not directed to any posters, it is directed at the idea of this MCA 

I know. We keep getting "offers" to help us pay off our mortgage for only $50 to $100 extra a month! Why would I pay a company $50 to $100 a month to split my mortgage from monthly to bi-weekly when I am perfectly capable of doing it myself? We are only paid once a month so a monthly mortgage (with paying extra on principal) works better for us. What we pay in extra principle every month is actually more than the "extra" payment that the bi-weekly mortgage would be. And I have complete control. I can tell my bank to pay mortgage lender $1000 instead of $800 a month (electronically) and it does not cost me anything. Note: we do not have a prepayment penalty clause.

As for MCAs, I think you could do it yourself and save the fees. We actually have a checking account just for our mortgage/taxes/insurance. (We do our own escrow). So I have $1000 from my paycheck put in this account and DH has $300 from his check put in this account. We pay all monthly mortage payments (plus extra) from this account plus insurance 2x a year and taxes 2x a year. The interest in this account belongs to us. It's a free checking account (nominal interest, of course).

Just some thoughts on doing things yourself rather than paying a company to do them....

 We did it ourselves and paid of a 30 year mortgage in 15 years. Babs

babs:

 We did it ourselves and paid of a 30 year mortgage in 15 years. Babs

That was the exact point of Greg's original message.  

You absoultely do not need any kind of special account to do this.  Just send an extra payment each month that says "apply to principle only" and you'll cut down that balance!  I had to call the auto loan company to find out what to write in the memo section of my payment (I make mine on line with my CU's free bill payer service) to get the payments to only apply to principle, they did reverse the entrys to reflect principle reduction payments.  It works especially if your additional payment arrives just after your regular payment.