Ameriprise Bank FSB is offering the Home Ownership Accelerator product created by CMG Financial Services. CMG first introduced the product in July 2005 and modeled it after a product found in Australia.
Home Ownership Accelerator combines a checking account with a home equity line of credit. The borrower deposits his or her paycheck into the checking account. Any cash left in the account at the end of each day is swept into the HELOC, driving down the principal balance and lowering the amount of interest owed.
Borrowers can withdraw money from the account to pay bills and cover expenses.
Jeff Williams, president of Ameriprise Bank, said in a statement, “When evaluating a traditional mortgage, borrowers tend to look at two things—the monthly payment and the interest rate—without considering the overall cost. Many would be astonished by how much money they’ll spend on interest over the life of their home loan. With the Accelerator, the equation changes. The homeowner’s idle cash is applied to the principal balance first, lowering the amount of interest they owe."
Ameriprise Bank is a unit of financial services company Ameriprise Financial.
A call to CMG was not returned by press time.
