There are many schemes out there today for speeding up the rate in which you finance in your mortgage off. These range from simply adding extra finance to your payment to apply towards the principal every month to formalized programs offered by your mortgage lender. Finance Merge Accounts are simply another form of this type of expedited mortgage payoff plan.
A finance merge account is simply a bank account that is set up to pay all of your discretionary income toward your mortgage principal.
You set up the finance account
So that you retain a certain amount of your income to finance for the necessities and other mandatory expenses each month everything else goes to the mortgage. Typically, this will result in your paying off the mortgage in less than half of the original mortgage term.
The drawback to this setup is that there is literally no flexibility built in. If you should have some type of emergency arise while this program is ongoing, you will need to already have finance set aside to address the emergency. For this reason, it is absolutely necessary for you to consider ALL of the implications and plan for them before deciding to go with finance merge account.
Another drawback to this type of account is the fees involved in setting one up. Typically, the lender will charge an additional $3000 in setup fees to get a finance merge account going. This is added to the principal of your mortgage right at the start, which represents, at the least, an additional finance to you will have make in the long run.
A finance merge account may be the right choice for those people who cannot trust themselves to maintain the fiscal discipline to make regular additional finance on their mortgage. For the most part, though, a better plan would be to independently make additional principal finance independently and avoid the additional costs and inflexibility of a finance merge account.
Keep in mind that no matter which course you decide to take, paying down principal ahead of time will save you thousands of dollars in interest charges over a 30 year term. Not paying down your principal as quickly as possible would be tantamount to flushing finance down the toilet.