Don't Fall for This Mortgage Pitch

You may have received e-mails touting a system that promises to help you pay off your mortgage early. This mortgage-acceleration package -- which includes a software program -- relies heavily on the use of a home-equity line of credit. The software analyzes your financial data to reveal when and how much extra you should prepay.

The Money Merge Account system, sold by United First Financial, costs $3,500. For the price, you may also receive a recruiting pitch. United First is a multilevel marketer that encourages salespeople to bring others aboard, passing the profit up the food chain.

With or without expensive software, the fact is that the more discretionary income you can commit to prepayment, the quicker the mortgage becomes history. We suggest you keep your $3,500 and do it yourself without having to fend off a pushy salesperson.

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For example, divide your monthly payment by 12 and pay that much extra each month. Doing so would allow a homeowner with a $230,000 mortgage at 6% to cut about 5.5 years off a 30-year mortgage (see our How Advantageous are Extra Payments? calculator).

Is prepaying your mortgage even a good idea? That depends on whether you have better things to do with spare cash. You could create a reserve fund so that you don't have to borrow in an emergency or stash the money in a tax-deferred college- or retirement-savings account.

Salespeople challenge whether you'll follow through on your own -- as if spending $3,500 for software will ensure that you'll use it. Tell that to couch potatoes whose high-end exercise equipment gathers dust.