| Accelerated Equity - Legit or Scam? |
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dnoll
New Poster
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| Accelerated Equity - Legit or Scam? |
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My parents are shopping around to refinance their home mortgage. Recently my mother has been in contact with a company call Accelerated Equity (www.acequity.com). They offer a program called a Principal First Account. The company claims you can pay off a 30-year loan in less than 15 years by depositing your paychecks in this special account each month and allowing the balance to reduce your interest rate on the loan. The company recommends that you deposit as much into the account as possible each month and use a credit card to pay for monthly expenses. Then at the end of each month pay off the credit card. This technique is supposed to maximize the average daily account balance, and therefore, the interest rate reduction. They claim to have a patented software program that does the calculations and require almost $4000 in fees to start the program, which is much more than the fees for the other loan options in consideration. I haven't been able to find any impartial information about the program, so I am a little concerned about its legitimacy. What is your opinion of the program?
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Sat Oct 22, 2005 7:23 am |
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Rolo
Yo' Daddy
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Location: Colorado/Florida
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| Re: Accelerated Equity - Legit or Scam? |
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quote:
Originally posted by dnoll
require almost $4000 in fees to start the program
Bahahaooooo...RUN!
"Expect me when you see me."
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Sat Oct 22, 2005 12:10 pm |
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dnoll
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The $4000 in fees includes the cost to inititate a first and second mortgage on the house, which just considering the loan would be on the high end. But is that amount unreasonable for the loan and the Principal First Account?
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Sat Oct 22, 2005 4:30 pm |
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efflandt
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Location: Elgin, IL USA
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Who holds their existing mortgage, interest rate, and how many years remaining on that?
Sometimes they can get a deal from their existing mortgage company (maybe not best interest, but improvement with lower closing costs). I lopped 7 years of payments ($62k interest) off of my existing mortgage for all of $170 closing costs (no other fees) and about $30 more per month (refinanced 3 yrs into 30 yr to 20 yr at lower fixed interest). And they threw in a free HELOC (no annual fee) at less than prime to borrow paid principal, and interest bearing checking account for escrow (from which I pay tax/insurance myself).
Why the double loan? The acequity.com website does not give any info on their Principal First Account (one link gives a 404 page not found error and another requires login). Last I knew a by-weekly payment plan to somewhat shorten the terms of a loan cost about $300. But if they have no prepayment penalty, it should cost them nothing to pay down principal at any time to end the loan early. Although refinancing "might" give them a lower interest rate.
A quick Google search does not find any complaints about them. So the question is whether the projected savings are worth lost investment value of $4k price of admission (vs. paying down principal yourself when able). Difficult to say when their website provides no details (red flag).
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Sun Oct 23, 2005 7:18 pm |
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