Earning decent rates on my savings/checking accounts has started a domino effect through my personal finances. Not only am I itching to cancel my escrow and PMI, I now realize participating in Wells Fargo’s Equity Enhancement Program was a huge mistake.

(For the uninitiated, an "equity enhancement" program works by effectively scheduling the borrower to make one additional mortgage payment a year. This reduces the loan principle faster and saves interest in the long run.)

Every lender is probably different, but Wells Fargo funds their program by charging a one time $295 fee to enter and then a $2.50 for each withdrawal. I had mine setup to remove money ($X) every two weeks, immediately following the electronic deposit of my paycheck. Wells Fargo would hold this money and then make my mortgage payment for me at the beginning of each month. They also, I must admit, provided me with some decent customer service and occasionally even some basic feel-good numbers on the amount of interest I had saved to date and how much I would save through loan payoff.

I have no recollection of the $295 initial fee (perhaps I suppressed the memory?), but even the $2.50 fee every two weeks makes the program not worth using – at least not when I have a nice interest-bearing checking account. Instead of letting Wells Fargo charge me to hold (and lend) my money, I can simply set up a recurring payment from my ING Direct account to pay the full amount ($X * 26 / 12)each month. This way my money is earning interest from the moment I get it to the moment it needs to be paid.