Home Ownership Accelerator Program

Home owners interested in paying off their mortgages as seamlessly and quickly as possible might want to consider one of the newest trends in the industry — a mortgage that basically doubles as a checking account.

A California-based mortgage firm has pioneered a program called the Home Ownership Accelerator. Financial experts at CMB Financial Services created a method of making principal payments that combines a traditional mortgage with the basic tenets of a checking account at your local bank.

Here’s a snapshot of how it works: Instead of writing a check for the mortgage each month, homeowners deposit their entire paychecks, as well as all other sources of income they receive, into their mortgage, completely bypassing a checking account. Those deposits eat away at the remaining principal on the mortgage, while interest is calculated at the end of each month based on the amount remaining on the loan.

Meanwhile, homeowners can access that mortgage throughout the month like any checking account, either by writing checks or using an ATM card. Withdrawals, of course, pull money back out of the principal payments made each week or month.

The loan pays off faster than a traditional mortgage because with a lower average balance, there is less interest charged and therefore more of the person’s income can stay in the mortgage in the form of principal, ” Doug Nesbit, a vice president with CMG, told The San Francisco Chronicle recently.

The company says the loan is “is ideally suited for homeowners with a stable salary, good credit and financial discipline.” In other words, it’s geared more toward people who can afford to sink their salaries into this type of fund. Those living more paycheck to paycheck should probably look elsewhere.

Mortgage Loan Place is here to help you make sense of the mortgage world and find options that fit your needs and lifestyle.