The Fast Approaching Credit Cliff

Click on the title to link. This is a huge issue that is coming at us like a freight train, yet nobody is talking about it. One of many reasons we believe the worst of this economic crunch is yet to come...

Mortgage Acceleration Programs

We get called periodically about ways to payoff your mortgage quicker. It usually pertains to two programs: 1. Bi-weekly plans offered by your lender, and 2. U First.

Bi-weekly plans are where you start paying your mortgage every other week as opposed to once per month. The net effect at the end of the year is you end up making an extra payment because instead of 12 payments you have made 26 half payments (which equals 13 full payments). That is the gist of how this works, and it does work. If you do not make any extra payments to principal then you will pay off your 30 year mortgage about 7 years early (which may save you tens or hundreds of thousands of dollars, depending on your balance.). Lenders will charge you an up front fee for this of roughly $350. The benefit to it, besides paying it off early, is that it is automatically drafted out of your bank account every other week. However, if you are a disciplined person then you really don't need this because you could just make an extra payment every year (or the equivalent of) and accomplish the exact same thing for $0.

U First is another popular mortgage acceleration program, and we will tell you upfront that we do not like it at all. Does it work? Yes, if you follow it. However, it is a multi level marketing program (MLM) where anybody (including you!) can sell it to others and receive a commission on the $3,500 fee for the program (yes, that's three thousand five hundred dollars). The program uses a sophisticated software that uses a second mortgage to pay down your mortgage based on the timing of you bills and income every month. Like we said, it works if you follow it. But we don't like that people who have no experience of education about mortgages are selling it to make money, it is ridiculous to pay that kind of money for a program you can do for $0 without the fancy software, and the same old adage still applies regardless...you CANNOT magically pay down your mortgage with some program. You still, no matter what, can only pay down a mortgage by applying more money towards the principal balance of the mortgage. So although U First is often presented like some magical potion that suddenly enables you to pay down your mortgage, it just is a "re-ordering" of you income so you can pay more towards it every month. So, once again, you MUST be committed and disciplined to make whatever necessary sacrifices in order to pay it down. Further, there are programs out there where you can accomplish the same exact thing, using the same exact method, without the cost. Now you don't get the software program they have, and to that we say, "Who cares?!" Keep your money and go to HEAPLAN to see your other options, should you choose this route.

If you have any questions about anything we discussed here, just give us at call at 505-830-9685 and we will gladly walk you through the truth.

A Debt Payoff Plan That Works

Click on the title to link. This is a variation of a debt payoff plan we have preached for years. It does work, but there is nothing magical about it. Just remember that the only way to pay off debt is with discipline and sacrifice. You cannot keep things "as is" and pay off debt. You have to work at it and commit to it. But if you are willing do that then this plan will work.

Just In Case You Are In This Situation...

Click on the title to link to this article about debt collectors, and how they are ready to deal.