For most people, a home is the biggest investment they will ever make. As such, some might be interested in exploring programs designed to save a substantial amount of money by paying off a mortgage in one-half the normal amount of time.
This week, we’re looking at the Home Ownership Accelerator program offered by CMG Mortgage to see if you may be able to save money.
In subsequent weeks, we’ll address other competing programs for paying your mortgage off quicker. 
The Home Ownership Accelerator program has been in existence in the United States for a few years. The idea is modeled after very popular programs offered in Australia, New Zealand and the United Kingdom for more than a decade. CMG Mortgage is located in San Ramon, and the program is powered by GMAC Bank.
Basically, the way the program works is that you have a line of credit in place of your traditional closed-end first mortgage.
Your paycheck is deposited into the line of credit when you get paid, and this lowers the loan balance. Also, you may wish to deposit funds that you normally keep in low interest rate checking and savings accounts into your mortgage line of credit. Then, whenever you need money to pay bills, you simply pay them via checks, credit cards, or bill pay that are directly attached to the line of credit.
Thus, you save interest on money you don’t need and you save interest on money you do need until you need it. All of this takes place with no change in lifestyle.
Since your paycheck and low interest rate checking and savings accounts are applied to the line of credit, your principal balance on the loan is lower and you have the potential to save a lot of interest.
How quickly you can pay down your mortgage depends on how much you are able to reduce the principal balance. The lower the loan balance, the less interest you pay over the life of the loan, and the quicker the line of credit is paid off. An important benefit of the program is since this is a line of credit, you can pull money out again whenever you want for any reason.
CMG Mortgage has an excellent Web site located at www.homeownershipaccelerator.net. It provides a five-minute video that explains how the program works, supplies testimonials from satisfied customers, gives answers to frequently asked questions, and provides information on write-ups in major financial publications.
The Web site also has a slick simulator program where you can plug in your take-home pay, expenses, debts and interest rates. The program will then demonstrate what your savings might be and how quickly you may pay off your loan.
The program also compares the interest paid versus a fixed-rate loan. Furthermore, you can determine the impact of an increase in interest rates.
This is a monthly adjustable-rate loan based on the one-month Libor index, plus a margin above the index ranging between 3.250 percent and 0.750 percent.
As an example, the April one-month Libor index was 2.709 percent. If the margin selected was 3.250 percent, then the interest rate in the first month would be 5.959 percent.
On the other hand, if the margin were to be bought down to 0.750 percent, then the interest rate in the first month would be 3.459 percent.
The company claims that 90 percent of the borrowers buy down the margin because of the low resulting interest rate and the speed at which their mortgage is paid off.
The loan has a lifetime cap of 5 percent over the start rate, and you can also select a temporary three-year or five-year rate cap. The overall pricing depends on the margin and the cap that you select.
Most homeowners would be reluctant to take an interest rate that is adjustable monthly. However, the one-month Libor index is currently low and the above rates compare quite favorably with fixed-rate loans.
So, what happens when the Libor interest rate goes up again? By using the simulator, the company is able to demonstrate that you may still be able to save a significant amount of money, based on your individual circumstances. To qualify for the loan, you need a minimum credit score of 680. Loans range from $100,000 to $2.0 million. Maximum loan-to-value ranges between 75 percent and 90 percent depending on loan size and whether the home is owner occupied or a second home.
The company stresses this program is not for everyone. For homeowners who don’t have savings from their paychecks, and don’t typically maintain much money in a checking or savings account, this program may not have any benefit since the mortgage balance would not be lower. For a loan officer to sell this program to you, they have to be certified by CMG Mortgage. If you sign up for a mortgage, a representative from the company will also call you to once again ensure that you understand how the program works.
Is this product for you? It might be worth your while to look at the videos and experiment with the simulator at the company’s Web site.
The next step would be to contact a certified loan officer who can further demonstrate the benefits.  Also, it would be wise to talk it over with your financial planner or CPA to get their objective input. As the company said, “you have nothing to lose but years off your mortgage.”
Mike Ferguson is with Windsor Financial Services located in Granite Bay. His Web address is www.windsorFS.com.