Question:

How to pay down mortgage balance with checking account?

Answer:

To pay down mortgage balance with checking account is possible for an off-set mortgage. This type of home loan product started in the UK and Australia, and is now hitting the U.S. Massachusetts and California are states where it is generally easy to locate this mortgage offer. However, though, you need to have refinanced with the bank that offers it, and your loan has to be an ARM - that is, an adjustable rate mortgage.

How does paying down mortgage loan balance with checking account work?

Offset mortgages tie the existing funds in a checking or savings account to the mortgage principal. While the funds remain deposited, they lower the loan principal balance that earns interest on it.

This program, however, can be of any significance for people with large amount of cash in a checking or savings account. For the others, it doesn't pay off at all to have your paychecks deposited and then draw cash from it.

Be careful with pay down mortgage with checking account programs.

Some banks offering those products are Wells Fargo and Salem Five. The program is usually marketed as Home Ownership Accelerator by a variety of scammers, so beware. Only approach legitimate and large loan providers, as this is a pretty new product and you can end up paying costly for it in terms of inflated interest rate.

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Common misspellings: mortage and morgage