In today's financial environment, we can't rely on the appreciation of our assets to improve our future financial position. With consumer and personal debt nearing ten trillion dollars, home values and equity declining, and personal investments gone south, consumers are concerned and are looking for solutions.



There are many debt management programs on the market designed to help us improve our future financial security. A suitable strategy designed to pay off our mortgage and other debt may be the best use of our personal financial resources.

Traditionally, financial advisors have made their living on the left side of the balance sheet and have provided little guidance in terms of effective debt management.

There has been an increasing interest in acceleration planning. An acceleration plan is a set of generic instructions or a "road map" to accelerating the payoff of mortgage debt. This would include the bi-weekly payment plans, the progressive payment plans, and "snowball" or "roll-down" type plans. While these plans can be effective, they have never gained popularity as an alternative to conventional mortgage amortization.

Technology has entered the picture with the recent innovation of the mortgage acceleration software program. Unlike a static plan, a mortgage acceleration software program is designed to take financial input from the homeowner, analyze that data, and formulate a specific set of instructions to follow until the mortgage and other debt is paid off.

If an acceleration plan is like a road map, mortgage acceleration analysis software is like a GPS navigation system because it utilizes continuous financial data to determine where we are at any point in time and makes strategic adjustments to keep us on course.

The advantages of a mortgage acceleration software program are: - It works faster and more efficiently against debt than static acceleration plans. - It adapts well to changing personal financial circumstances. - It provides real time reporting of our financial progress, giving us daily motivation to stay on track. - It has the ability to eliminate other debt and harness those vanishing monthly payments to step up the attack against mortgage debt.

Because of these advantages, mortgage acceleration software programs can be the fastest way to pay off a 30 year mortgage without necessitating lifestyle changes.

The benefits of using any mortgage acceleration strategy will depend on the owner having some positive cash flow. If your family, on average, makes more money than you spend, you can benefit from the use of these programs.

Those that are within the first few years of a 30 year mortgage will realize the most benefit because of the proportionately high interest payments during this period.

One of the most controversial but successful innovations in the field of mortgage acceleration is found in the "merged account" programs. This involves the combining of cash accounts with certain types of credit accounts for purposes of utilizing temporary and surplus cash flow to reduce interest costs associated with debt.

The original program was developed in Australia and calls for the combining of your checking account with a type of transactional mortgage account so that the short term liquidity of the checking account can reduce the balance on the mortgage and the interest charges accordingly.

Although this is an innovative and effective strategy, the disadvantages are that one must refinance into this type of mortgage, it has an adjustable rate structure, and it is not readily available in many states.

Another variation of this program utilizes an advanced line of credit which merges with the checking account. Specific amounts of debt are transferred from the primary mortgage into this transactional line of credit where the owner's cash flow can affect the balance and reduce the interest charges.

The owner's unspent or surplus income further reduces the balance over time, allowing the line of credit to absorb additional amounts of the mortgage debt until both accounts are at a zero balance.

The advantage of this variation is that the owner keeps their existing fixed rate mortgage, avoiding the refinance costs, and it is even faster and more efficient than the original Australian program.

These programs are not inexpensive due to the complexity of their programming.

The mortgage acceleration analysis software operates on-line only and is based on real time cash flow and account activity. Because this is a moving target, the company can only provide very conservative payoff and savings projections. This shortcoming has led to some debate as to whether the program investment is justified.

While mortgage acceleration can have some disadvantages, when properly utilized, it can be the fastest way to pay off a 30 year mortgage along with any other debt you may have and is a safe bet to improve your personal net worth.