cptacek - Basically my Graphing calc is just doing what your spreadsheet did lol. Depending on the difference in the interest rates between the HELOC and the 1st mortgage and other assumptions made you can save some money using these programs. The best scenario I could come up with was around 10 - 15 dollars a month. Of course I did not calculate the cost to refinance or monthly and upfront fees these programs charge you. On another forum I did exactly what you just did and got pretty much the same reply as willowstudios gave you. I give up as far as I am concerned if someone wants to pay someone for telling them through magic they can pay their 30 mortgage with no extra payments in 10, 15, 20 whatever years earlier then I say go for it. I will just trust the old sayings, NO SUCH THING AS A FREE LUNCH and IF IT SOUNDS TO GOOD TO BE TRUE THEN IT PROBABLY IS. Of course I also trust my calculations.
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A consumer advocacy group spokeswoman, Carolyn Bond, of the Consumer Law Action Centre in Melbourne, Australia, has written in to comment on these loans. Here's what she has to say about this type of mortgage structure:
I have been tracking the "mortgage accelerator" industry in Australia for over five years, and after examining the programs offered to consumers and representations made, I am convinced that very few -- if any -- consumers save money using a HELOC in this way. In fact, many end up paying more for their mortgage. In almost all cases consumers are led to believe that significant projected savings are due to keeping funds in the mortgage, where they are actually due to the tight budget included in the example or program.
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A look at mortgage acceleration plans