As many Americans struggle with the rising cost of everything from food to fuel, more homeowners are turning to early mortgage-payoff plans in the hopes of becoming financially secure. Mortgage accelerator programs like the United First Financial Money Merge Account and CMG Mortgage Inc.’s Home Ownership Accelerator, two of the most popular programs, go against advice commonly given by many financial advisers about not paying off mortgages early. But some homeowners are deciding they want the peace of mind of owning a home free and clear more than any tax write-off or other benefit connected to keeping a mortgage.

United First: software and coaching

For $3,500, United First Financial customers get access to the Money Merge Account, software and coaching that the company says can help pay off a 30-year mortgage in half to a third of the normal time. “It depends on what their income is and what their outgo is on a monthly basis,” says UFirst co-founder Skyler Witman. “The system has an algebraic formula that goes through and starts to learn what your habits are and learn what you’re doing on a monthly or yearly basis, and it starts to adjust based on what you do in your life.”

Homeowners must obtain a home equity line of credit from a lender (not UFirst). They deposit their income into the line of credit and use the account to make their mortgage payments and pay their other bills and expenses. Any discretionary income that might normally sit in a no- or low-interest checking or savings account is applied to the outstanding balance on the line of credit. The software calculates how much to pay to maximize the reduction of mortgage principal. It works, Witman says, because future interest payments are being canceled on the mortgage, while the interest on the line of credit is also being paid down.

Witman says people don’t have to change their spending habits because “our system is designed to work around your lifestyle.” The homeowner still makes the final call each month, deciding whether the recommended payments are manageable. In a lean month, that might be the minimum mortgage payment.

When Mary Bender of Denver received a letter in the mail three years ago about UFirst, she was understandably skeptical. “I thought, What is the trick? It sounds too good to be true.”

But now she says, “It’s probably the best financial move I made. I started out with a 27-year mortgage left at the time. I’m down to 3.9 years now. The key was to take every dime I could and put it over on my line of credit” and apply it to her balance of $136,000. Bender is so pleased that last year she decided to become an agent to sell the program in her spare time.

CMG: an all-in-one loan

CMG Mortgage’s service differs in that it is an “all-in-one loan. It works like the combination of a first and second lien with a line of credit,” says Doug Nesbit, national sales and marketing director. “You refinance a loan or loans into [the Home Ownership Accelerator], and it allows you to take a paycheck and direct deposit it into a loan. The day you get paid your loan balance goes lower.”

Income deposited into the line of credit, which has an adjustable rate, creates a balance to pay bills and reduce future mortgage interest payments. Many people who sign up pay points to get the lowest margin on their loan, which is tied to the LIBOR, the benchmark index for interest rates. The margin is the fixed component used to calculate the interest rate.

Unlike the Money Merge Account, the Home Ownership Accelerator is offered through mortgage brokers and doesn’t require software, but homeowners must have a credit score of at least 680 to qualify. “It’s probably one of the toughest loans to qualify for in the country,” Nesbit says. “If the house is over $1 million, you need two appraisals.”

The amount homeowners will pay to use CMG’s service depends upon their preferences; the costs are similar to taking out a regular mortgage. “If a person doesn’t want to pay for a low margin, then their closing costs are going to be less,” says Casey Moseman, a mortgage planner with Envision Lending in Las Vegas. “If the person chooses to buy down their margin to the lowest it can go, their closing costs are going to be higher, and each margin has an associated cost with it.”

Using disposable income

Nesbit says the plan works best for people with disposable income to apply toward paying down their mortgage. “If you don’t have extra income you shouldn’t be accelerating home payments. You should be getting your budget and bills under control,” he says.

Not everyone is a fan of mortgage acceleration programs. Robert D. Ashby, CMPS, of Solid Rock Mortgage Corp., in Pembroke Pines, Fla., doesn’t believe homeowners need to pay anyone a large fee to accelerate a mortgage. “Many [home equity lines of credit] can be set up with little or no fee at all. The homeowner just needs a little education and guidance and they can do it on their own, thus saving thousands.”

He also says there are a lot of people selling mortgage payoff products who “use misleading statements to gain business. The only way a homeowner can truly know which program or strategy is best for them is to meet with a fully qualified mortgage professional that can do a side-by-side comparison of all strategies, taking into account the homeowner’s financial and investment plans, and develop the winning solution.”