Is a Money Merge Account a Good Way to Pay Off Your Mortgage?
Published on - October 1st, 2007 (Modified on - January 14th, 2009) (by J.D. Roth) 
Over the past few weeks, I’ve received several questions about money merge accounts (sometimes called “Australian mortgages”). I haven’t paid much attention to these because I’m unfamiliar the products. But when Abbie wrote last week, I decided to do some research. Here’s what she said:
My financial guy handed me a DVD for United First Financial the last time I spoke with him. Apparently they are a company that uses “sophisticated algorithms” to compute how to best pay down a mortgage using a HELOC and a Money Merge Account, with the end result being that the mortgage is paid off in fewer than 30 years. (Their preferred statistic seems to be 11 years.)
I’m new to the whole homeowner thing, and know there are differing opinions regarding paying off a mortgage early, but was wondering if you’re familiar with this system. I’d appreciate any information or opinion you have regarding money merge accounts or UFF; a bit of web research comes up with inflammatory chats and the company’s own claims, but nothing from a reliable third party.
I spent three hours researching money merge accounts, and was unable to find any better information than Abbie did. From what I can gather, here’s how they work:
- The homeowner sets up a home-equity line of credit (HELOC), borrowing against the value of his property.
- Some large sum is withdrawn from the HELOC and used to pay down the primary mortgage.
- The homeowner does not deposit his paychecks, etc. into a traditional savings account, but applies them to pay down the HELOC.
- From time-to-time, another large chunk of money is taken out of the HELOC and applied to the primary mortgage.
- In case of emergency, the homeowner takes more money out of the HELOC.
- Though the HELOC will likely have a higher interest rate than the primary mortgage, it’s actually cheaper to maintain because of the way the interest is calculated.
In the case of United First Financial, all of the timing for these actions is prompted by proprietary software, for which the homeowner pays a one-time fee of $3500. These prompts are not mandatory, but if they’re not followed, it defeats the purpose of the program.
The consensus on the web seems to be: yes, these programs can help you pay down your mortgage quickly; however, they don’t do anything that you could not do yourself for free. The expense might be worthwhile if:
- You want to pay off your mortgage.
- You don’t believe you’ll have the discipline to pay down your mortgage on your own.
- You do not intend to move — you believe you’ll be in your current house for many years.
But most people with the financial resources to accelerate mortgage payments are able to do so without the assistance of a third party. The easiest (and most flexible) mortgage acceleration program is the one you control yourself: simply send extra money to your bank on a regular basis (being sure to note that the extra ought to be applied to principal). You’ll save nearly as much as you would with a money merge account. (Proponents of MMAs admit this!) If you find after a couple years that you lack the discipline to do this on your own, then you might seek a reputable source for a money merge account.
You can read other discussions of money merge accounts at these sites:
- It’s important to note that the Australian Securities and Investments Commission doesn’t like money merge accounts. “Consumer organisations … concluded years ago that there were no savings to be made, and that promoters were engaged in unlawful conduct.”
- Fat Wallet Forums: United First Financial — Looking for the truth contains 52 pages of discussion on this subject.
- Fat Wallet Forums: Mortgage accelerator/offset accounts facts and myths
- Real Estate Blog: Money merge accounts: Good fairy or demon?
- The Simple Dollar: Money merge accounts: Are they a good deal for home borrowers? (742 comments and growing!)
- Asset Builder: Accelerated home ownership thru line of credit
Before you begin a mortgage repayment program of any kind, be certain that you understand the consequences. Accelerating your mortgage payments may provide psychological comfort, but there may be smarter financial choices. Last year the Federal Reserve Bank of Chicago released a study [PDF] that found:
About 38% of U.S. households that are accelerating their mortgage payments instead of saving in tax-deferred accounts are making the wrong choice. For these households, reallocating their savings can yield a mean benefit of 11 to 17 cents per dollar.
All of this discussion about money merge accounts is just theory. I’d love to hear from somebody who has first-hand experience with them. Do you love the idea? Hate it? Do you think it’s worth the cost? Let us know!
Note: Just as I was finishing this post, I recieved another e-mail about money merge accounts. They seem to have reached some sort of critical mass.
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@Lin Ennis #99
It is mathematically impossible to use a HELOC to shuffle your money around if you absolutely, positively spend all your money each month!
You know that “interest cancellation” they are always talking about? That only works if you can put off paying bills until the day before your next payday. Even if you are paid once a month, that means you owe HELOC interest on one day. Where are you going to get that money?
The only possible way to pay down your mortgage if you have no discretionary income is to keep your money in the highest interest rate accounts you can find and use the interest earned to pay down principal.
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On a different note, a mortgage is likely the cheapest money one will ever borrow. My current mortgage at 5.25% costs me 3.5% after taxes. A good dividend paying ETF such as DVY is now yielding 3.66% or 3.1% after the 15% tax on dividends. Do I expect the stocks in DVY to grow faster than .4%/yr over the next 10 years? That’s almost certain. Why should I or anyone be so obsessed with paying down a mortgage that has a reasonable rate?
I’ve met people who have ignored their company’s 401(k) match in favor of paying their mortgage faster. Makes little sense to me.
JOE
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#101–JimmyDaGeek: I appreciate the thought you’ve given to this. Obviously, there are a few steps to the “money shuffle” that I haven’t spelled out here, though others have alluded to them. So, you’ll have to 1) trust me, 2) buy a book on it, 3) figure it out for yourself, or 4) keep believing a banking inaccuracy. (Hint: yes, banks do this shuffle all the time–for profit.)
#102–JoeTaxpayer: You are so right about it being stupid, generally, to forego a matching fun. Yikes. But Joe, why are you paying so much income tax? Maybe you should look into adding on a home business or setting up some entities. I feel for you bro.
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#103-Lin Ennis
Trust you? Not if you are selling MMA and “interest cancellation” as the best way for mortgage payoff. As JoeTaxpayer stated above, show us a spreadsheet. I can show you mine. See #64, 75 & 83.
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Hey Jimmy,
Thanks for references to the specific post numbers. Very helpful. Yes, what you described is pretty much the way I did mine, except I did use a HELOC to my advantage.
I didn’t quite understand your reference to a “factor between 0 and 1.” Could you say a little more?
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Lin – my tax rate is high because I do well. I’m neither bragging about that, nor complaining about the rate. It just creates an equation where my mortgage cost after tax is barely above inflation, and the alternate investments more desirable than more prepaying. Of course if rates dropped further, I’d move to take advantage of that. My income is from employment, and for me, I’d not look to any schemes to avoid taxes, just the usual deductions and charity.
JOE
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#106 — Thanks, Joe. Good for you! I’m with you on schemes. Loserville. I have had several successful home-based businesses since the late 80s.
Did you want to talk about that 0-1 spread?
I am interested in your spreadsheet. I have some I could share, but I’m not a spreadsheet whiz, so I don’t know if I have anything you’d want to trade for.
Lin
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Jimmy offered the sheet. Although I can probable describe the 0-1 factor as he intended. Assume one has an income of $5K monthly. 1 would imply that they owe the full $5K on their LOC for the full month. 0 implies they get paid on the first and all bills are due on the 31st, so, in effect there is no LOC, no interest owed. One can look at their back statement for a few months, each month will show the average balance, and one can scan for the maximum balances. It’s that difference that the LOC fills in. But I still think the gains to be made are quite exaggerated. At best, one gains a return of average balance times their mortgage rate. Ok, $5000 * 6% = $300. This seems like much work to do this. And the risk that an LOC carries for those who don’t have enough self control.
JOE
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#108–Hi Joe. Thanks. Sorry about the confusion: Joe/Jim–all you handsome guys look alike in cyberprint.
The Mortgage Professor, too, thought the claims were exaggerated. Then he posted a confession. Since you already understand this, I’ll talk freely with you about it–if you promise not to ripoff my product explaining the missing piece.
Sounds like you’re not interested in that.
Maybe this will clear it up:
Over a two year period, I drew four $5000 draws from my HELOC and paid them on mortgage principal.
Cycling money… (churn, churn)
That knocked $50,000 pure interest off my scheduled mortgage payback. A “total” savings of $70,000…but, as you so clearly understand, $20K was my own money that usually sat in a bank account till the next bills were due.
I did pay interest on the HELOC. $208.
The interest I avoided was $50,000.
To me, call me crazy (for others reading over our shoulders), that’s a gain of $49,792.
Phone # 888 664-6651.
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Ok, at the risk of going around in a circle. You drew $5000 4 times. Every 6 months or so. At the end of each 6 month period the $5K LOC cycled up and down, but got paid off, right? Slightly different than had you added the $833/mo payment for the same 2 years. 95% (I am hazarding a guess here) of your savings came from the extra money you actually earned and ponied up. And a smidge from the LOC juggling.
I am a spreadsheet guy, although Jim may have had a different thought. When I look at a spreadsheeted amortization table, simple numbers. $100K 30yr 6%, I observe as I think you did, that the first month interest is $500 and a principal payment due of $99.55.
This is enough to tell me that an extra $100 will knock off the last payment, $599.55 or 6X. But that $100 still had to come from some where. I know you are not an MMA salesman, not the $3500 package. They are making larger claims than you seem to be.
JOE
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As the saying goes, “There is nothing new under the sun.” Joe is on target regarding the 0-1 factor. The most efficient way to use the HELOC is to minimize your average daily balance by depositing your salary into it and pay bills from it. Depending on how often you are paid and how your bills come due, you want to get the HELOC balance down to zero (or close to it) during the month. As I stated in my previous posts, the savings that the HELOC shuffle provides depends on the difference between the HELOC and mortgage interest rates. In terms of absolute savings, it’s not more than about 1%.
I sent my e-mail address to you so you can give me yours and i will send my spreadsheet for you to play with.
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o.k…..I was just about to go with an MMA until I read these blogs. I do have the discipline so I should do this on my own. But let me get this straight. All I need to do is pay my regular mortgage payment and another payment that is the amount of that months principal every month??? Is that right??? I have the disposable income to make that happen with no problem. What if I get a 15 year mortgage, can I do the same principle and pay it off in 7 years???
Please let me know
Saint
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#112: Dear Saint, I’m almost finished with a report that covers the technique you mentioned (pay this month’s bill plus next month’s principal). You can get notice of when it’s ready by getting my confidential financial letter from my blog: http://www.thegreatmortgagerevolt.com.
However, I’d recommend you get the manual that explains four major techniques, including the HELOC technique. (The HELOC technique is not covered in the free report.) Click “Order” at the address mentioned above to *read more about it*.
Or call me directly. I’m out a lot today, but I urge you to get more info. Happy to talk with you, so you don’t make the mistakes some of us have made.
tollfree: 888 664-6651
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I am good at excell but not great. What I really need is someone to send me an excell spread sheet that has the formulas that covers a 500,000.00 mortgage at 5.4% fixed for 30 years with a column that shows interst paid by month and principal paid by month. With this spread sheet I will play with it and see how long it will take me to pay off a mortgage by paying extra principal every month. Can anyone send me this.
nosaint803@hotmail.com
Thanks
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#114 — Dear Saint–to see an amortization schedule, go to http://www.bankrate.com, click calculators, then mortgage calculators and type in your specifics.
To see how much you could save using a HELOC to accelerate payoff, go to http://www.letriches.com/calculator.php
Best wishes! –Lin
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Saint – I will email you later tonight with the sheet you requested.
Lin – I followed the link you posted. Amazing that if one has a $600 monthly payment due, and total monthly income of $600, that any system can still accelerate their loan. Too bad the calculations aren’t transparent.
JOE
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Listen… here is the bare bones about it…
Here are my credintials.. (The reason why my opinion is important – Unlike many of the above that give people advise regarding their finances without taking the time to study the question – Highly irresponsible)
First – I am Customer of United First Financial
Second – I too had my doubts and did much research… I spent two months trying to take the program appart.. during the process I came to understand the mathematical principles behind the program.
Third – I am an electrical engineer and business owner – it took me two months to be convinced because the principles behind the MMA program involve numerous variables.. one of them being time and another compounding.
Fourth – I am paying off my house in 6.25 years… and as smart and organized as I am.. could not do it without the program.. yes.. I could pay it off in less time by sending money to the principal, but that logic misses a few key points:
a) The mathematical algorithms optimize your results… in simple terms.. you will loose more than $3500.oo by not using your money to it’s highest potential.
b) The program does much more than what is told above… It reorganizes your liability (how much you owe) structure…. In simple terms.. it teaches you how to better manage your money and lower the effective interest rate on your overall debt.. this means that at the end of the month you pay less interest to your debtors… The part of the interest that does not go to them is income you did not have before.. this money now goes to pay down the principal of your debt..not the interest… and this means that you are not pulling extra money out your pocket to accelerate the payment of your house…
Wow.. I can’t beleive I wrote this much.. It;s my first time writing in something like this.. but like many engineers that I know.. I hate ignorance and those who tell others what to do without “knowing” what the they are talking about.
Finally…. go to whomever talked to you about the program and thank them… They are trying to give you knowledge.. and knowledge is truth… and the truth my friends will set you free!
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#116–Yeah, Joe, that’s what I’m saying. The HELOC is almost magical in its fluidity in saving money. (I’d try to sell you my book, but I know you don’t need it, so I won’t. It *is* cool though!)
Lin
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re 117–But if your *aren’t* an engineer, you can do this by buying one of the books on the topic…like *Let your Mortgage Make You Rich!*
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Hey Moe-117
I am curious to know how you figured you would lose $3500 by not using MMA, when you spent an extra $3500 by using MMA? I am also curious to know what is your effective HELOC interest rate vs. your real rate?
Here is my algorithm on doing it yourself – #64, 79 & 83. I also have a spreadsheet that models various payoff methods
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Moe
You say “..but like many engineers that I know.. I hate ignorance and those who tell others what to do without “knowing” what the they are talking about.
The best way to eliminate such ignorance is to show us your “complete” cash flow resulting from following MMA. You don’t have to show what your expenses are, but just show as income and expense and the resulting loan balances for your mortgage and heloc. With that complete cash flow, it’s possible that a comparison to other methods may reduce or eliminate the ignorance of many on this board.
Thank you
Bill V
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Moe – as Jimmy observed and I agreed, there is an opportunity to capture the difference that one is earning on their average balance in checking and their mortgage rate. Lin has a site which claims that without an extra cent of income, one can use a system which takes a $100K mortgage whose 30 yr 6% payment is $600, and reduce it to 16 years. This would normally take payments of $811. Indeed, there’s a magic beyond us engineers or mathematicians. And yes, it so magical, no one can ‘explain’ it.
JOE
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Re: 122 — Joe and Moe– Joe, thanks for such a cogent post.
I do believe I explain it very well in my eManual. While I try to be supportive and educational online, the real skinny comes only by buying my $97 manual–which is $3403 cheaper than UFF and a LOT easier to use! I’d give it away free, but then I’d need a $3000 backend course to support myself.
Does this seem too cheesy and self-serving? Or is $97 fair for charts, comparisons, etc?
Lin
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#100–Bill: My explanation is the way I may my living. I’ll explain it to you over the phone or by spreadsheet. What are you willing to pay for my time and expertise? The manual sells for $97.
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Well, Lin, to be blunt, in my ‘perfect world’ people would understand the math enough to know that $1 at 8% over 30 years knocks off about $10 from the last payment. But this is not that world. So, yes, I’d rather see 36 people buy your book that one poor sucker waste his $3500.
(The subprime mess proves the average mortgage customer is pretty clueless. Too bad)
JOE
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#125 — It sucks, doesn’t it? The weird thing…and a dirty little secret I think people don’t realize, is that on a 30-year loan, people pay interest on the last principal payment for 358 or 359 months (I’m not sure which, but it’s basically 30 years minus a month or perhaps two).
This is why I constantly tell people that a 30 year loan at 6% adds up to 115% interest! That’s why there’s SO much to be saved by paying off a home early.
Some people disagree with the basic premise of early payoff. I think it depends upon goals and values. How about you, JoeTaxpayer?
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Well, in my hierarchy of saving, I say to first make 401(k) deposits to get the company match, if any. Next, address any credit card debt that goes month to month. Next, fund the IRA or Roth, depending on bracket. For most people, that’s all they can do. If they have extra at this point, the pay down is fine by me. If the rate is low, they can consider long term investing, but that’s a personal choice. A ‘guarantee’ of 5-6% or long term return of 8-10%. Admittedly, that 8 is not guaranteed. I do think there’s a mortgage rate where prepaying makes less sense, say at 5% or so. Do you pay off early or put the money in T-bills earning 6% (when rates creep back up). I am often reminded that the ‘sleep’ factor has to come into play. A paid off mortgage is a load off someone’s mind.
JOE
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Hey Joe,
I’ve decided to pay someone to create an Open Office spreadsheet for me to pass along to my customers. It should be static and protected so they can’t bungle the formulas. Their input fields will be loan amount, interest rate, term (or term remaining) and two cash infusion columns (one for HELOC injections, and one for extra payments which might start and stop according to personal preference). Is yours close to this, or is this something you’d like to consider?
Otherwise, I’ll go to a freelance outsource.
888 664-651
PS: I do have spreadsheets–probably some pretty good ones. I built one where each tab provides a comparative scenario. Then halfway through I bungled the links back to the loan terms and had to create new “names” for the same fields in different scenarios. Inelegant.
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you can send me your email address thru my blog, yours was not posted that I could find. I can probably do what you need, but would need some clarification on the variables. I will be back on line tonight, and can discuss terms/details. Heading out to appointments now.
JOE
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Using Lin’s logic that a 30-year mortgage @ 6% per year has a 115% interest rate, it makes more sense not to pay off a mortgage and invest the money instead. Every $1 you invest each year at a conservative 6% per year will accumulate to $998 at the end of 30 years, giving you a return of 182%.
182% sure beats 115%
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Ok, Jimmy, ya lost me.
$1/mo, 30yrs beginning of month deposit, ends at $83.80 @ 6%
$1 invested for 30 years is $5.75 at 6%, $10.06 at 8%.
Lin, I actually followed. A $100K mortgage paid over $30 years has payments which total $215K. I didn’t say I agreed, just followed. It kind of ignore time value of money. The math is right, the words are ‘worng’ (sic).
JOE
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JoeTaxpayer
$1/mo, 30yrs begining of month deposit, ends at $1,009.54 @ 6% annual rate
you said $1/mo but you actually used $1/yr.
HTH
Bill V
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Ooops, right. Jimmy must have meant month as well. Thanks.
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For those looking for more actual numbers and analysis:
in addition to doing your own at http://www.inintgramortgages.com/financialvoodoo
and http://www.integramortgages.com/Mortgage_Equity_Accelerator_References
.
.
.
Robert has some great numerical info on his blog:
http://floridamortgageplanner.typepad.com/certifiedmortgageplanner/2008/01/money-merge-acc.html
and http://floridamortgageplanner.typepad.com/certifiedmortgageplanner/2007/10/money-merge-a-2.html
It should be enlightening for those willing to open their eyes and see the truth. Unfortunately the many financially ignorant and fanatic salesmen who ‘drank the cool-aide’ just want to believe… and they don’t want to understand.
At the end of the day, it’s all nothing more than simple common sense, but the devil of understanding it is in the details!
Spreadsheet, helocs, software, and other schemes are not necessary to pre-pay your mortgage!
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Ron, the fact that the proponents (salespeople) for the programs claim a power beyond arithmetic should be people’s first clue. I agree, in general, there’s no need for HELOC or software, but you must agree with me that a simple spreadsheet can help someone see the impact of the extra payments and can be used to strategize on the payment plan they’d like, if early payoff is their goal. Need? No. But it sure can help.
JOE
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Agreed Joe…
Any Free or low cost tools, spreadsheets, budgeting software, library books, websites, news paper articles, etc… can all be great tools to help and assist folks.
Education is the key!… but folks don’t need to pay exorbitant fees and waste their hard earned money for a get rich quick placebo.
Personal responsibility, education, understand your own financial decisions, and then rolling up your own sleeves to get the job done… is the only solution.
Kudos Joe.
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For the most part, I believe that the discussions on this board are the result of people trying to check the validity of MMA claims.
The fact is, if you wish to pay your mortgage faster, you must either reduce your interest rate without reducing your P&I payment, or pay additional principal to your loan.
MMA can help one to accelerate his/her payoff but one can very easily accomplish that task without paying an uninformed ‘software’ salesperson $3,500 to do so.
My best advise for anyone who still has a question about whether or not they can reduce their debt without paying $3,500 is to seek the advice of a Financial Planner who is knowledgable, ethical, and who does not sell MMA software or its ilk.
My thanks to the person or group maintaining this web site for providing a forum for this type of discussion.
Bill V.
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I have an agent speaking with me about this software. He just started working with it himself and is not able to convey every aspect without the help of the UFF site videos. I have recently opened an unsecured LOC with my credit union and this seems to work very well for its intended purposes. It is open ended, fixed interrest. I(wife included) am in a financial nightmare myself. I am completely maxed out on all credit cards, no savings whatsoever, no extra money to pay more than minimums. The LOC was a god send when everything was about to crash. I have a new mortgage and very little equity to start with. This MMA seems to be an answer if I can stay diligent or a nightmare(worse) if I can’t. What I would like to know(before there is an emergency that pushes me over the cliff) is, would the fixed rate LOC I currently have achieve the same results if used properly. Should I start depositing all my income into this LOC and use it periodically to make all my credit card and normal expense payments? Since it is fixed rate, would it just cause more problems? Do I need to wait a while til there is at least say $6000 available credit at all times, or would it be ok to liquidate a high interest(30%) credit card even if it maxes the LOC? Any help would be appreciated. I would rather not spend the $3500 dollars(which they will gladly “absorb” as first charge to the HELOC) if my current setup can be used for this purpose. Thank you. Please feel free to ridicule as well. I need to know everything, even if it hurts.
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Tim
First, and most importantly, you do not need to pay 3,500. to a software vendor at this point in time.(or ever for that matter) Please seek a qualified credit counselor in your area and get a clear understanding about your income and expenses, Then put together a solution that is perfectly clear to you. There is no way to suggest a solution to you without a thorough discussion of the facts. That discussion should be be with a Qualified Credit Counselor.
Good Luck in your search for an answer.
Bill V
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Tim,
Congratulations on recognizing that you need to make some changes to get out of your current predicament. I have a couple of thoughts for you regarding your post. We have had several customers in a similar situation recently where the MMA was a very effective tool. It sounds to me like your agent should be looking at your situation with their Branch Manager or their assigned mentor. Those managers are there to help train them to service you better, and are rewarded for training new agents.
Bill V. mentioned working with a Qualified Credit Counselor. I don’t disagree with him, but I don’t agree either. We have not had great success for our clients using CCC’s. Although many Consumer Credit Counseling agencies advertise that they are “Non-Profit”, they still come with a fee. More importantly, even though they state that they won’t hurt your credit rating……. your file is tagged that you are using them and your score will drop, most of the time significantly.
Here is what I would suggest for your situation.
1. Do you have a budget? You will never be successful in getting back on track until you know how much you are spending and where it is going.
2. If you use your LOC for “interest cancellation”, it must have certain characteristics to make it compatible with the MMA program or any other program using the “interest cancellation” effect.
3. If you decide that the MMA program is for you, there are some basic strategies that we teach that will maximize the effectiveness of the program for you.
The MMA works very well for your situation, but as with any program, you’ll need to make sure to maximize its effectiveness with correct strategies. You can contact me or join one of our free web events to learn about them. Also, if your agent (who it sounds like may be a friend of yours) is in need of support, I would invite both of you to join our web events. We teach about many principles of financial management, including proper use of the MMA as part of your total financial picture. All of our web events are FREE.
Also, consider posting at http://www.ufirstforums.com for answers from UFirst agents regarding your specific situation.
Best Regards,
Travis Mitchell
Debt Free Project
http://www.DebtFreeProject.com
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By the way Bill, I haven’t ignored your request for a case study. I’m working on one but have been to busy to put together the full scenario. I’ll let you know when I have it done.
Travis Mitchell
Debt Free Project
PS.. Re: your post #137, does that mean that people shouldn’t use a financial planner who is recommending the Money Merge Account software? Did you ever think that maybe the thousands of CFP’s out there recommending this program have found a use for it which compliments a long term financial plan?
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Travis – I would steer anyone away from a CFP recommending this program just as fast as I would steer them away from an Aggressive variable annuity salesman. Tim, above, does need to get a grip on his budget, and it would seem he can least afford to throw away $10, let alone $3500.
He should take his situation to the newsgroup (available thru google groups if he has no newsreader) misc.invest.financial-plan where he can get some good advice from some knowledgeable people.
JOE
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Joe,
I think you diminish your credibility with such a blanket statement. No financial product is right for every customer and no customer is right for every financial product. However, there are certain products that are right for certain people. It is clear that you don’t like the MMA. If the product was free, do you then think it would be a good product for consumers.
I believe, based on your posts, that you don’t like the MMA because of its cost. I also believe that this discussion has moved from a objective discussion about whether or not the product is a good way to pay off a mortgage to a discussion about the “value” of the product.
Regarding the value of the product, who are we to decide what value any product is to another person. If Tim’s #1 goal in life is to pay off his mortgage and get out of debt, the Money Merge Account software will give him a mathematical road map to do so. Tim has to decide if that road map and the world class customer support that UFirst provides its clients is worth the cost of the product. That is not a decision for you or me. But regarding the product itself, when used correctly, it works and it works very well.
Travis Mitchell
Debt Free Project
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Travis
I originally joined the discussions here to find out how MMA could accelerate a mortgage payoff “without refinancing or increasing my monthly Payment”. With the help of this board and a spreadsheet, I discovered that if one does not increase his payment, he will not pay his loan faster. I am a big fan of paying debt off faster. Paying your discretionary income to your mortgage can be smart, and will accomplish debt reduction. However, paying your discretionary income to your loan principal is, in fact, an increase in your monthly payment, contrary to the language in the MMA Advertisements.
For a person in Tim’s situation, the last thing he needs is to pay 3,500. for a software program to tell him what an honest CFP would tell him for $150.
Tim, please consult with a reliable financial counselor and get your financial situation straightened out.
Also, Tim, I agree with Travis regarding credit counselors who suggest that you allow them to work out arrangements with your creditors. That is considered by some lenders to be the same as bankruptcy. Remember, you cannot usually borrow yourself out of debt. I cannot over emphisize the need for you to speak to a Qualified financial counselor.
Bill V
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The MMA provides an instantaneous financial readjustment based on entries of income and outflow. Tim would be in far greater debt consulting a qualified financial counselor everytime he spent or brought deposited money. Real time adjustments are not within the purview of qualified financial consultants. Moreover, a large number of qualified financial consultants recommend the MMA–even those who do not sell it. To disqualify it out of hand would be puerile. I agree with Travis.
Regards,
Steve
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Ok, Travis, point well taken.
One platitude thrown our there is “don’t invest in anything you can’t explain to a good (intelligent) friend over lunch.” How about “don’t invest in a product that cannot be explained in a few hundred posts.”
You see, none of the promoters of this system can explain how it will help someone who doesn’t have extra money to throw at their mortgage. If one has no extra funds, the savings to be captured are the difference between the rate on one’s average (checking) balance and their mortgage rate. No more than that, no cutting the loan to half its term.
Bill and others seem to understand that.
JOE
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#146 — Joe, you are so right. The mortgage is reduced exponentially, but still in relation to the degree one lives below (within) his or her means.
People already caught up in overspending may need a different solution. Even Consumer Credit Counselors (CCC) charges a fee.
I’m not sure $3500 for MMA is the place to start, especially since, with the info we’ve been given, we aren’t sure out-of-control spending has been corralled.
Name 10 times when spending more saves one money…
Lin
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Steve
MMAs offer people with discretionary income a better way to reduce debt (for a mere $3500) then saving it at 1% or otherwise blowing it. If a person has virtually NO discretionary income, MMA will do nothing for them at any cost. For those of you who sell MMA, please reread Tim’s note and suggest ways for him to get back on his feet before trying to take $3,500. dollars more from him than he has.
Bill V.
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If you spend more time Googling this company and product… you find that not one person that has spent the $3500 says they regret their decision. Could a math whiz do this program and maybe get close to what the software does? Maybe. On the other hand, a 5% margin of error could end up costing $20K, $30K, $50K, in interest that COULD have been saved… but was not.
On top of that… one would have to really enjoy math, playing around with the numbers, and not mind the time it takes to do it.
Personally I bought a MAC simply because I was tired of the 30 minutes a day I spent rebooting my PC. Was saving 30 minutes a day worth the extra $2000 I spent on the MAC? In my opinion… yes.
After showing this opportunity to several friends who are veterans of the mortgage industry, as well as one who is a software engineer for a major defense contractor, and getting their opinions… I am now a UFF agent myself.
THANKS to everyone here, as well, for helping me make this decision… your input has been invaluable!
PS: You will not find this on P2P because the software is online… clients get a login, password, tech support… and (by the way) a money back guarantee.
One thing I find REALLY ironic… is the folks here who are using a tool (their computer) to write on this forum. If you really do not believe in software, or in the value of using a tool to do something more efficiently… why did you buy a computer? Could you not use a Smith Corona and some carbon paper to communicate? When you balance your checkbook… do you use a calculator… or a abacus?
Also… a couple of people here said they could do just as good a job as this software. But I notice that they did not say they HAD (and how could you know if you did as good a job if you do not own the software so you could compare/match performance to performance?).
And… If you can, but you won’t (or have not)… can’t you just conceed the the whole thing would be a pain the butt… and that many people would rather invest a measly $3500 on the right tool for the job… so they can then go lay on the beach somewhere?
Is $3500 really such a huge amount of money? Seriously? When it allows you to save over 100K, cuts years of your mortgage so you can invest that $ in something else… and do it all in a way that is simple, easy, and saves you time?
Again… thanks for helping me make my decision.
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@Bill, post 144.
The advertising claim of “without refinancing their existing mortgage or increasing minimum required monthly payments” is an absolutely accurate statement. None of our clients increase their monthly payments. Every client, however, will make additional principle payments, in specific amounts and at strategic times, based on the mathematical formula that exists in the software. The frequency of those extra principle payments and the amounts vary based on each customers specific income, expenses and discretionary monies. Those three components are always being leveraged to their maximum potential.
RE: a CFP, it’s been my experience that a CFP is not going to calculate those numbers for you on a daily basis, a weekly basis, a monthly basis, or on any basis. In my area, I can’t walk into a CFP’s office and even get his attention for less than $150.00. In fact, our clients have found that if they don’t have a big chunk of money to invest, they can’t get a CFP’s attention for much much more than that.
Travis Mitchell
Debt Free Project
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