I wondered what these “mortgage accelerator” loans that advertise on the radio all the time were all about.
It turns out a Peoria Realtor, Chris Butterworth, has done all the leg work for us on mortage accelerator loans.
The ads say they are big in Australia but here is a note from an Australian!
The misleading and deceptive conduct included showing clients comparisons between loans arranged by the company and standard loans, that represented that by switching loans they would save money and pay off their home loan sooner but failed to adequately explain that to obtain this benefit clients would need to make extra repayments.
Despite the action from the regulators above, there is still some promotion of this type of scheme, but much less than in the US.
{ 2 comments… read them below or add one }
Robyn Robertson 08.30.07 at 3:31 pm
The accelerator loans are like having a huge home equity loan on your house. As with any home equity loan it takes discipline to use the loan correctly to take advantage of the way it works. If you are not careful you can get upside down in a hurry.
MARY ANDES 09.16.07 at 4:53 am
1/3 of the Austrailians are using this loan. As usual, with any advertising campaign, there are brokers who promise too much and the Government is going after those companies.
However, this is about the only loan I know that actually takes your savings left over per month and applies it to the loan balance every month, thereby reducing your loan balance and monthly payment.
This loan only works for those who save and rewards them. WHAT A NOVEL CONCEPT for Americans to be rewarded for saving!!!
Mary Andes