Money Merge Account - Worthwhile?
Published June 1st, 2007 in Mortgage Tags: debt reduction, home buying, Money Merge Account, mortgage.
**** An Update ****
Judging by the popularity of this post, it seems there are a lot of people that are interested in this subject. The main reason is the controversy surrounding it. For this reason, I’ve decided to look up a few more resources, so that readers of this blog can be a little better informed before deciding on taking this route to paying off their mortgage. While a money merge account may not be an outright scam, the marketing scheme used for the program is pretty scary. Think Amway and any other Mulit-Level-Marketing scheme and you’ll understand why you will find such ardent defenders of the program. At any rate, please read through the following resources, as well as all the comments posted here, and make an informed decision.
United First Financial - Looking for the truth
Have you heard of United 1st Financial?
There are many schemes out there today for speeding up the rate in which you pay your mortgage off. These range from simply adding extra money to your payment to apply towards the principal every month to formalized programs offered by your mortgage lender. Money Merge Accounts are simply another form of this type of expedited mortgage payoff plan.
A money merge account is simply a bank account that is set up to pay all of your discretionary income toward your mortgage principal. You set up the account so that you retain a certain amount of your income to pay for the necessities and other mandatory expenses each month. Everything else goes to the mortgage. Typically, this will result in your paying off the mortgage in less than half of the original mortgage term.
The drawback to this setup is that there is literally no flexibility built in. If you should have some type of emergency arise while this program is ongoing, you will need to already have funds set aside to address the emergency. For this reason, it is absolutely necessary for you to consider ALL of the implications and plan for them before deciding to go with a money merge account.
Another drawback to this type of account is the fees involved in setting one up. Typically, the lender will charge an additional $3000 in setup fees to get a money merge account going. This is added to the principal of your mortgage right at the start, which represents, at the least, an additional payment you will have to make in the long run.
A money merge account may be the right choice for those people who cannot trust themselves to maintain the fiscal discipline to make regular additional payments on their mortgage. For the most part, though, a better plan would be to independently make additional principal payments independently and avoid the additional costs and inflexibility of a money merge account. Keep in mind that no matter which course you decide to take, paying down principal ahead of time will save you thousands of dollars in interest charges over a 30 year term. Not paying down your principal as quickly as possible would be tantamount to flushing money down the toilet.
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144 Responses to “Money Merge Account - Worthwhile?”
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“A money merge account may be the right choice for those people who cannot trust themselves to maintain the fiscal discipline to make regular additional payments on their mortgage. ”
I think you are to generous. The only thing a MMA can do is shame someone into making extra payments because they were dumb enough to spend their origional $3500 on the program
The $3500 they spend would put them approximately 10 months behind the same individual who takes that $3500 and pays it towards their mortgage.
People do crazier things though.
Attornies General are investigating these scams as we speak. Florida alone has over 900 complaints since March 2007. They use high pressure sales tactics and confuse people with fuzzy math. Then they sell them their great $4000 program that will payoff their loans in 5 years. Several class actions suits are in progress and most of these scams will cease operation, leaving the users with no software to use, since it’s all web based.
Do a search on MMA and you will be bombarded with offers to save you money.
Save the $4000 and send some extra principle each month.
I am a customer of the MMA. What proof do you have of these “so-called” class action lawsuits? Are you saying that are towards the MMA or programs out there that are like it? Please explain yourself…tnx
I have searched high and low and cannot find a lawsuit (of any kind) against United First Financial. Maybe you could direct me to the correct site or link. Thank-you.
RIGHT ON CHRIS. NO REPLY FROM MR. 900 COMPLAINTS. I CHECH THE UTAH BBB. U1ST IS CLEAN AS CAN BE!
I have done a few analyses and my conclusion is that the MMA is a wonderful tool for 2 kinds of people: Those who are financially irresponsible, and those who have lots of debt. Otherwise, you can do the same thing yourself and not have to pay the $3500 fee for the software. But, if you fall into one of the 2 categories, then the MMA can save you an awful lot of money.
One crucial point in participating in the program is your ability to properly manage a HELOC (Home Equity Line of Credit). The faster you pay down your HELOC, the better the MMA will work for you. There are several creative and extremely effective ways to decrease the payment on your HELOC. These apply not just to MMA participants, but to anyone with a HELOC. You can literally decrease your payment by $100-$200 each month. More info here.
I’m not so sure that Aaron actually gets how the MMA works. By depositing all of your monthly income into the HELOC, you are “paying it down”, thereby dramatically decreasing the balance upon which the finance charges are calculated. That’s an interesting product being touted on Aaron’s link. I’d hesitate to purchase anything from a site like that. No business name, or individual name is listed, no background on the “author”’s qualifications, just a “pay me now” button. And folks think Ufirst’s MMA is a scam?
Here’s a thought on the “Scam” line of thinking for MMA: MMA is a service product. It is designed to help guide you to early mortgage payoff and massive interest savings. Could you do that on your own? Sure, with some time and effort. It’s not quite just simply putting an extra fixed amount towards your mortgage principal each month. MMA is more flexible than than and attempts to adjust it’s recommendations based on changes in your financial situation, such as more or less income, extra expenses, extra disposable income due to paying off other debts, etc. You absolutely could put the time and effort and diligence into your finances and accomplish much the same thing. But that doesn’t make a product a scam. Are all auto service companies scammers simply because you can change your own oil for less than they charge? Are GPS manufacturers scamming you because you can navigate on your own with a paper map, and some trial and error? The answer is no. MMA is a product that provides a service that may not be the best option for everyone, but that certainly doesn’t indicate the it “doesn’t work” or is a scam.
This kind of misinformation could dissuade someone who would benefit remarkably from an MMA, and you should do a little research and write a disclaimer.
Your basic premise that all of an account holder’s discretionary income is deposited and lost forever is flawed. Nor is an MMA inflexible.
Any balance in an MMA remains as an account balance, and the account holder can use the funds on deposit in any way they choose.
MMAs are set up using an open-ended HELOC, and the average balance in the account offsets the principal balance in the mortgage account. That results in a reduction of the principal on which the interest portion of each monthly payment is calculated by the amount of the average balance, allowing a larger portion of the regular monthly payment to apply directly toward reducing the principal.
No additional payment is needed to accomplish the rapid reduction of the principal, and any discretionary income or other deposit adds continually to the average balance–but remains available to the account holder.
Nor does withdrawing funds in the balance of the account cause any reversal of the benefits. Once the principal is paid down with each regular monthly payment, the principal remains paid down.
The effect of withdrawing funds from the balance in the account will however affect the average monthly balance, and nominally slow down the process.
For the facts about the reality of how an MMA works, you should refer to http://uffmoneymergeaccount.com/ and review the spreadsheet demo available on the “Do the Math” page.
Any updates on all of those lawsuits? Also, for anybody who cares, the Money Merge Account is NOTHING like what is described in the article above. First off, it is not a bank account. The system never touches your money, only you control your money. All of your “left over money” does not go to pay down your mortgage. The fee for the program is not attached to your mortgage in any way. Clients actually using the Money Merge Account claim that they have more flexibility than they’ve ever had prior.
Basically, nearly every point made is incorrect. So yourself a favor. Find a site with factual information. There are plenty of them out there. Here’s one for your consideration.
www.DebtFreeProject.com/money_merge_account_intro.html
(shameless plug)
:)
@Jim and Travis - It might be a bit more believable if you guys weren’t trying to plug your own sites by leaving a comment on here. Nonetheless, I will leave the comments, so that folks can make their own decision on whether an MMA is right for them or not. Personally, I don’t think it’s a good idea to pay extra for the “privelege” of paying down your mortgage early. Bottom line is, you don’t need a HELOC or an MMA to do this. So, while the details may have changed on MMA’s, the principles of the matter have not. They are simply a way for banks and other lenders to make money, while convincing the consumer that they are helping to pay down the mortgage.
-Allen
It is free to find out if it will work for you. Everyone does not qualify. Maybe $3500 is too much to Spend to save as much as $50,000 or more. No obligation, no high pressure. You have to see the whole program maybe twice to understand how it works instead of how you think it may work. Have a great day!
(Yes this a plug for my site, but it could help you)
Danny.
u1stfinancial.net/budget
I love all of the people who bash this program. None of them have a clue, and most are totally mis-informed. I’ve yet to actually hear from a person who is on this program and has complained about it or claimed that it doesn’t do what it says it will do. Nor I have I been able to find 1 complaint from the BBB nationwide. Most of the clowns that bash this program simply don’t understand the program, or they just don’t understand the mindset of the average american home owner. This country now has a negative savings rate. That means most people don’t know how to manage their money. If the majority of people could do this on their own, then why aren’t they? The answer is because 97% of americans don’t have the discipline to do this on their own. Thats not a knock on people, its just how it is. My suggestion is that if you’re interested in saving thousands of dollars in interest on your mortgage and would like to pay it off at an accelorated pace without changing your lifestyle,your monthly budget or your mortgage payments, than do your homework on this program. Get your free analysis done and talk to real people who have been on it and see what they have to say. Get real life testimonials from actual clients. I’ve been on it for 6 months and its done wonders for me and my family, but don’t take my word for it, because I’m now a agent selling it for the company. If you do all that and still don’t think its for you, than don’t buy it, nobody in the company will be upset or try to pressure you into it. Its not for everyone. If you have questions on this product, feel free to email me at dkm7498@comcast.net or log onto my website at www.u1stfinancial.net/jasoncolbert
It seems awfully funny, though, that the only people that have spoken up here in support of the program are people who are trying to push the product. The largest objection to the program, I think, is the marketing technique being employed. It just sounds spammy…
Also, just to let everyone know, I did an informal survey of some mortgage brokers in my area, and not a single one of them would recommend this program. Just some more food for thought.
If it’s so easy to payoff your mortgage early, and everyone knows how to do it, then why isn’t everyone doing it?
Yes, contributing more money towards your principal will payoff your home sooner and save interest. Everyone knows that. How much extra will you put towards your principle every month? Will you do it every month? Can you afford to do it every month? Will you know exactly when your home will be paid off? Can you calculate your interest savings? Will you maximize the power of your money?
If you’re have a lot of cash laying around doing nothing, and can afford to put it all towards your mortgage (which is paying into a closed-end loan, meaning: gone for good), then do it.
If you’re the average person with maybe a couple hundred dollars left over after your bills, and would like more flexibility with your accelerated equity program, then the MMA would probably work great for you.
Guess what else? You don’t have to follow the MMA prompts to pay off your home. Why not expand your portfolio? Take a 4 month hit, to invest in something else.
It works! It’s not a scam. Aaron, whatever mortgage brokers you were talking to obviously had not thoroughly examined the MMA and how it could benefit their clients. I’ve talked to brokers who have been in the business for years, and think this is a great product.
BTW, check out the upcoming issue of True Wealth Magazine. There will be a huge article on Ufirst and the MMA.
If there are any doubters, please, keep the questions coming.
If the program works SO well, why will NOT ONE SINGLE UFF REP take the challenge of simulating a sample problem using the software?
Why? BECAUSE IT DOESN’T WORK AS WELL AS SIMPLY PREPAYING YOUR MORTGAGE ON YOUR OWN.
At the ufirst agent blog, one agent from Jubilee said he would take our challenge, but he changed the numbers to manipulate the results (lowered income, increased expenses dramatically, added additional purchases, pretty much changed everything), then we were banned from posting when we showed that his recomendations actually bakrupted the family, and MMA would cost them over $25,000 more in interest. The idiots refinanced $44k in 0% car debt to 7.5% heloc debt. These have to either be the dumbest or slimiest (or both) agents out there.
We all know how this works. Pay off your mortgage with another loan, and then prepay every penny you have to that loan, taking advantage of the “average daily balance” to bring interest costs down, while giving up the ability to earn interest on your money before it is needed to pay bills. With even below average checking account interests, you can beat this program if it were free. With a 0% checking account, you can EASILY beat this program when considering the $3500 cost.
Anyone that qualifies for MMA can access their money just as easily as someone actually using MMA because all they need is a HELOC. UFF agents LIE LIE LIE when they tell you your money is gone when you prepay without MMA. A HELOC is not only for those using MMA (far more people have a HELOC that don’t use MMA than do).
Again, if the program worked so well, agents would be busting down my door to take my challenge and show the ACTUAL MONTH TO MONTH MONEY MOVEMENTS. But no, they just use talking points BECAUSE THE MATH IS NOT IN THEIR CORNER. Jubilee project, put up or shut up, you crooks!
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!!!!!!!!!!
The UFF is for people who can’t do 6th grade math. That’s why they can only point to articales where they are paid advertisers instead of actual proof that their scamware actually does anything worthwhile.
Calvin, my suggestion to you would be to contact a local UFF agent and have he/she run your analysis. All the numbers would be right in front of you. You can then question and argue as much as you like, for free.
If the program is so bad, why are people all over the world using it? Did the Australians get it wrong? Has everyone on this program been had? All of those clients must be complete suckers, right?
I hope you weren’t calling me a liar when I said putting all of your money into a closed-end loan means that it is gone for good, in equity. That is true. That’s why these programs use an open-end line of credit.
Like I said, have someone run your analysis. Once that is done, find a mortgage calculator online. See how much extra you would need to pay per month to reach the same results. Then you can see for yourself if the MMA is worth it.
I hope to see your results.
Calvin, I think any agent would be more than happy to run your numbers. In fact, I could run your numbers.
If you’re game, here’s what we’ll do:
I’ll give you my email address. You email me, then I’ll send you a worksheet to fill out. You get that back to me, and I’ll run your analysis. I’ll also run your numbers through a mortgage calculator to determine what you would need to do to achieve the same results without the MMA.
You can look at them side by side and determine which would be better for your lifestyle.
How about it?
Dan,
I know this software better than you. I’m sorry if that sounds cocky or whatever, but, well, it’s true. I’ve run the number a zillion times for myself, other people asking about this software, agents, etc. The math is simple (this is where agents respond with MIT experts, NASA, Harvard business school profs, $2.5 million in devleopment stuff, etc. Note: interesting that YOU GUYS never can back up those claims).
Yes, the “interest cancellation” can lower the effective interest rate of a HELOC. Yes, it can save some money on your mortgage using the methodology IF THE SOFTWARE WERE FREE. The savings at todays rates is about $1 per month. All the other savings comes from extra payments. And, if you can get a checking account of ~2.5% (easily done, mine got 6%, down to 5% now), you can outperform a free MMA. The $3500 cost will basically NEVER get overcome with interest savings versus simple prepayment plans. In some extreme cases, you can come out ahead, but that would require incomes in the several hundred thousands per year and million dollar loans.
The marketing of this product borders on illegal, IMO. Agents claim those prepaying their mortgage have no access to the equity when they have just as much access by getting a HELOC just like mma people use. And since they can build equity faster without mma, they have more equity to tap. They claim savings of the “algorithm” are huge, when they are actually negative when the $3500 is taken into account versus a prepayment plan. ALL (read average 99.5%) of savings comes from prepayment.
The funny thing is the software doesn’t even do the mma optimally. If you want to do a month to month comparison, I can not only show you an MMA underperforming a simple prepayment approach, I can demonstrate the UFF MMA isn’t even optimal for an MMA. It’s a joke how worthless this software is.
If you care to try to prove me wrong, I would LOVE for you to be the first agent EVER to agree to a month to month comparison out in the open of the UFF software’s performance versus a simple prepayment plan on a simple sample problem.
Care to take my challenge? Or do you already know your scam software can’t measure up to 100 year old methods?
Again, put up or shut up, crooks.
HAHAHHAHAHAHAHAHAHAHHAHAHA!!!!
Calvin
Dan,
I thought I would reply to a few other of your comments:
“If the program is so bad, why are people all over the world using it? Did the Australians get it wrong?”
Actually, the Austrailian government believed their citizens were being scammed and took action:
http://www.butterhomes.com/blog/index.php/mortgage-accelerator-under-fire-australian-securities-and-investments-commission-taking-action-against-mortgage-brokers
“I hope you weren’t calling me a liar when I said putting all of your money into a closed-end loan means that it is gone for good, in equity. That is true. That’s why these programs use an open-end line of credit.”
Too funny. Liar? Maybe. If you actually believe what you wrote, then, no, I’m not calling you a liar, I’m just calling you, for lack of a polite word, ignorant. If you know the truth, but say those words, then, yes, I am absolutely calling you a liar.
You say once that money is spent on a closed-end loan, it’s gone. If that were true, the MMA wouldn’t exist and you would be out of business. Isn’t one of the requirements of the program that you have some equity in your home? Of course it is. Where do most customers get the $3500? The HELOC. Yes, a HELOC is an open ended line of credit, but it is drawing against equity built from the closed ended loan. If you don’t understand that that is, in fact, where the $$$ is coming from, you understand your own product even less than I give most agents credit for (which is very little). Again, one does not have to use the MMA software, or even the MMA approach to get a HELOC and access that equity in the form of cash that you say is gone forever.
Again, let’s just put this to the test. A simple sample problem:
$5000/month income, after taxes, paid on the half on the 15th, half on the last day of each month.
$2500/month expenses, all rolled up into one bill, due on the 27th of each month.
$200k mortgage, 30 year, 6% fixed, minimum payment due on the 1st of each month. 50k equity.
HELOC rate 7%, interest calculated on average daily balance, zero balance to start ($3500 for MMA though).
Checking account pays 3%, based on average daily balance.
$5000 (one month’s income) to start with in the checking account.
You use your precious scamware, I just prepay with an average checking account. ALL money movements must be shown. My money movements will be simple as they will all be the same, except for the first and last ones.
Care to wager on who gets out of debt first?
UFirst MMA is fine and dandy. It just has that slimy negative multi-level marketing stigma. You know, wink wink, meet at this hotel at noon but I can give you the details. Just show up and don’t forget to put on your name tag. If you become angent, you can start hassling your friends and family first to buy, so the person in your upline will benefit after you drop out of the program. Hell, if you can can’t sell your family, you can sell it to yourself.
Calvin - I wonder about the $2.5M investment myself. And I came to the same conclusion you did, that 99% give or take, comes from the actual prepayments.
What I fail to see mentioned in most of these threads is this; If you can pay your mortgage off this fast, you should refinance and get a lower rate in the first place. A 15 yr mortgage is usually 1/2% less than the 30 year. 1/2% on a $250K mortgage is $100/mo interest ‘canceled’ by virtue of the refi. That observation alone must be worth $1000 to those who will follow it. (They save just over $12,000 total over the 15 years).
My two cents.
JOE
Calvin puts up numbers and all the mma agents scatter.
JoeT,
Yes, refinancing can save some money. But be careful when talking about money spent now versus money saved in the future, especially over long periods of time. Spending $3,000 now to save $12,000 over the course of the next 15 years is NOT a savings of $9,000. If you have $3,000 now, you can sock that in a bank account. If it earns 3%, in 15 years, it will be worth roughly $4675. It’s certainly not $12,000, but it’s also not $3,000.
The two concepts involved are “the future value of money” and “opportunity cost”, both of which never seem to be a part of the average UFF agent’s thought process. They love to use nominal dollars instead of adjusting for future value of money, because it makes their numbers look better. As for opportunity cost, they HAVE to ignore that one, because when it is considered, their product is shown always to be a MONEY LOSER, even if free, compared to prepaying AND adjusting for lost opportunity cost of having to deposit their money against a debt versus earning interest on it for a short period of time.
Usually, when I speak of using a good bank account, UFF agents mistakenly (pr purposefully mislead/lie) say that a 3% bank account will never outperform the MMA. They always separate prepaying and earning interest, but they do not have to be separante. If I have $1,000 extra a month, they say I can send it to my mortgage as soon as I get it, or I can sock it in a bank and earn a measly 3%. Well, acutally, I can do both. I can earn the money, put it in the bank and earn interest until the last possible day each month the bank allows me to pay against my mortgage. The interest is small, ($1.25 for $1,000 @ 3% for 15 days ). But that $1.25 is typically more than what the MMA saves each month (mortgage interest saved minus heloc interest paid). That’s the sad thing about this product. Even if the product was free, I could still pay off a loan faster by using 100 year old methods. If I was using a 0% checking account, I could save some money using an MMA, but that’s where the $3500 kills it’s clients in that they could outperform the MMA even with a 0% account.
As for Don, yes, whenever we issue the open challenge to UFF agents to demonstrate their software’s performance, the agents scatter. We don’t call ‘em cockroaches for nothing.
Have a great week,
Calvin
Wow, you guys really do hate this product and anyone associated with it. Your rants sound very professional (childish).
Here’s what I find interesting: There are ways for homeowners to pay off their mortgage sooner. Why aren’t all homeowners implementing their own strategy to do this?
BTW, I ran an analysis on your numbers:
I’ve got the home being paid off in 5.4 years. It usually outperforms the projection, so it would probably be closer to 5 years. $195,632.33 in interest savings ($36,044.71 interest paid). That’s a 5,589% return on investment in interest savings, opposed to making the standard payments for 30 years. Investing the $3699.10 per month @ 3% for 24.6 years will give you a total of $1,611,000.88.
Is it worth $3500 for this individual to use the MMA? Maybe. Maybe not. It’s clearly working pretty well for this made up person, but maybe he/she would like to implement another strategy.
5.4 years, eh? 5.4 years is 64.8 months. Let’s round that to 65 months.
@$5,000 per month income, that’s $325,000 income over that time period.
@$2,500 per month expenses, that’s $162,500 owed over that same time period.
The mortgage balance from day 1 is $200,000 owed.
So, with $325,000, you claim that using the mma software, the user will have covered a total of $362,000 in bills and mortgage principal.
And you guys wonder why we call you liars. So the bank not only charged you no interest, but actually forgave about $37,000 in mortgage debt as well?
(hint: you might want to double check your numbers)
and when you are done correcting your numbers, compare the payoff period and interest saved to a standard prepayment plan. Then tell me the return on investment (hint, if it’s not negative, go back and check your numbers).
Wonder if poor math skills is a prerequisite for agents? Or maybe just poor eithcs? My experience would say both.
I am being told to enroll and pay $3500 and I will save
thousands of dollars. I am not a mathmatical person and
how do I know what the heck to do. I am 60 with a 1st
mtg. of $98,000….30 years
Calvin, my friend, the $2500 includes the mortgage payment.
So you are telling me what MY example is? Nice. Intelligence should come before arrogance.
So a mortgage payment that is STATED due on the first is assumed to be rolled into expenses STATED to be due on the 27th? Do you tell all your clients that their numbers are wrong even though you don’t know them?
And you still wonder why people think UFF agents are stupid? So not only can you not do the 6th grade math that shows MMA is slower than simple prepayments and an average interest bearing account, reading comprehension, well…… not so much either.
Nice.
I’ll buy the software from you if you can do the following:
CORRECTLY run an analysis of the stated example.
Show a mathematically CORRECT and COMPLETE set of money movements that generate a payoff date faster than just prepaying discretionary income each month and keeping said funds and the bill money in the bank account before spent each month.
That’s a 4 figure incentive for you to show that your software actually works.
But we all know it won’t happen because those numbers don’t exist, some I’m pretty safe. Heck, I’ll buy two MMA accounts from you if you can show it.
Calvin, a mortgage is a monthly expense, is it not? I’m surprised that you, being the expert you are on this, did not pick up on that when running your numbers. Quite the expert, indeed.
Okay, so the $2500 monthly expense excludes the biggest monthly expense. Gotcha. His real monthly expenses are $3699.10.
Here are the numbers:
The home will be paid off in 8.8 years. The scheduled interest will be decreased by $171,476.03 ($60,201.01 paid). Investing that $3699.10 per month @ 3% for 21.2 years will bring you a total of $885,527.40.
That’s still pretty good, don’t you think? Worth the $3500?
BTW, there is a way to beat the MMA doing it on your own. Again, I’m surprised that Calvin, the expert, hasn’t mentioned this. I guess he didn’t know.
ANYBODY could do this own their own. No one is saying you can’t. Whether or you’re in a financial position to do so is the question. For those that can’t afford to change their lifestyle (or just don’t want to change it), then this is probably a good program.
I know you want a huge chart and all, but I’m a busy man.
Also, you might want to check out True Wealth Magazine. UFirst is featured in a 30 page article. I guess they got over on those guys too.
I gotta run and get back to my lyin’, cheatin’, and stealin’. Have a good one, Calvy.
So, I was wrong about setting up my own example? This isn’t something I’m reading and passing on, this is an example I’m making up for you to run. Don’t tell me it’s wrong just because you can’t read.
Ok, so now you’ve rerun the numbers and come up with 8.8 years, which is what I was expecting. 106 months.
So, now let’s make the comparison I actually asked for (there’s that reading problem of yours again). Compare it to prepayments:
At the 30th of each month, if you take your checking account balance, subtract $1000 from that amount, and send that value to your mortgage each month, and pay your bills on the 27th, you will pay off your mortgage in 101 months.
After 106 months (no mortgage payments after month 101), one would have $16,000 in the bank versus less than $5,000 for the MMA approach.
So, using MMA COST you over $11,000!!!!!!
So, spend $3,500 to lose $11,000. Hmmm, are you sure that’s a no brainer?
So, speaking of lies, you said: “For those that can’t afford to change their lifestyle (or just don’t want to change it), then this is probably a good program.”
What change in lifestyle are you talking about? There isn’t one versus prepaying! The only difference between the monthly actions are whether you write a check to your HELOC or whether you write it to your mortgage. No complex algorithm is needed. Checking balance minus $1000 is the only math. (one could change $1000 to whatever they want, including $0 to make it the fastest, which is no math at all).
Typical UFF lies. There is no change in lifestyle versus prepayments. UFF agents say you can’t touch that money, but that’s a lie since they touch it every month in their own approach via the HELOC. Anyone who can do MMA (ie, qualify for a HELOC) can tap their equity without MMA through a HELOC.
Dan, do you also believe the UFF hype that there is no change in cash flow? An accountant that claimed that would lose their license as it would be a lie. Cash flow, under MMA is zero, by defninition. A HELOC is a debt instrument. Any money applied to it is a payment, ie, cash out. By depositing your whole paycheck to it, cash in and cash out are equal, thus cash flow (in minus out) is zero. Cash flow is also zero under the approach I’ve shown above, but I’ve never claimed it doesn’t change versus making minimum payments. The UFF has! Thus, they lied. Pure and simple.
Again, why on earth would someone pay $3500 to pay off their loan 4 months later and lose over $11,000? Obvious, because they were scammed!
Calvin,
I was so looking forward to a brief, concise, to-the-point post. You have yet to deliver. If you spent more time on actual content than on insults and hot air (which discredits your professionalism), you might find that more people would be willing to talk. I will admit, I skimmed your posts more than read because of the unnecessary adjectives. BTW, your insults reveal much more about yourself than they do the persons you are attempting to bash.
I will give you credit, you make some good points. When I have a moment, I will look at these numbers. Again, thanks for some actual content.
Keep in mind, what works well for Joe may not work well for Jim. Your system is another option and it’s always good to have options. Every individual should look at the options available and determine which is best, be it yours, the MMA, or another accelerated equity program.
It’s been fun.
So basically, the numbers are not in your favor, EVER, so you’ll attack the messenger and then cut and run. Tail between your legs. The numbers don’t lie. The UFF does.
I will certainly agree that different things work for different people. The problem is that LYING is what seems to work for UFF agents. You’ve lied about people’s access to their equity without MMA and you’ve lied about the relative performance of MMA to prepayments.
Your reference to the “True Wealth Magazine” is a prime example of why people should avoid this crap. The magazine is about how to make money in home businesses, etc. It’s not about products that do great things, it’s about products that make money for it’s reps. I agree that there’s money to be made selling this crap. No doubt there. Enron made money too for lots of people. Certainly not a great product. 4 figure price, 4 figure commission for something with basically ZERO development cost and minimal maintenance cost. I mean the amount of code it takes to put together the UFF web interface is minimal. Get a server, and connection, and you are in business. Then deploy a MLM sales force. And the $2.5 million agents speak of to develop the “algorithm” (which isn’t even optimal in it’s performance)? It was probably coded over lunch for a buck fifty. Take a second loan, pay it back with everything you have. The concept isn’t revolutionary or groundbreaking. Since it’s slower, it’s not even evolutionary.
UFF agents always seem to run at the first sign of math….
Everyone can see, with a little research, that the software doesn’t do anything special other than tell you to prepay your debt if you want it paid faster.
Write “Send more to your mortgage” on a piece of paper and look at it once a month. That will save you $3500 and be just as effective.
Calvin, I have just see a presentation today, obviously by a UFF agent, for the MMA product. Needless to say, my wife and I left thoroughly confused as to the method and sense of the product. We do have some nominal information based on “conservative” numbers such as gross bi-weekly pay, montly expenses and mortgage balance. Can you recommend a good mortgage pre-payment calculator to compare, side by side, with the MMA system?
I must admist I was rather shocked by the $3500 tag for a product that will not be owned by me outright, but is rather a web-based system. What happens if UFF suddenly disappears along with their server? in a few years? But that is just going off on a tangent. Again, I’m looking for a simple and understandable mathematical analysis to make a rational decision and not one based on a sales pitch.
Thank you for your comments.
I use a spreadsheet myself. the math behind all this is not hard at all, but different people have different levels of math skills (and spreadsheet skills). I am more than happy to send you a simple spreadsheet with an amortization schedule set up, you just put in your numbers. (diver_calvin2@yahoo.com). I will not attempt to sell you anything (i am not even in the home/mortgage/lending industry, i’m just an engineer for a large company).
i think bankrate.com’s calculator is a pretty good start.
http://www.bankrate.com/brm/mortgage-calculator.asp
a few things to keep in mind. UFF agents will tell you their estimate is “conservative” and that users get 15-20% ahead of that. I actually wouldn’t be surprised at all if that were true. But, the more complete truth is that prepayments on your own work faster, and ANYTHING that accellerates the MMA apporach (increased income, decreased expenses, etc) will accellerate prepaying on your own as well just as much. The MMA does nothing special and you are right to question the $3500 price tag.
I would recommend this approach:
1. Set up a budget. Stick to it as much as possible. Eliminate wasteful spending.
2. Shop banks. If your savings/checking acount pays 0%, you can do better. Mine pays 5%, but I use a credit union in another state from me, most wouldn’t do that (and I don’t blame them). This step isn’t crucial, avoiding the UFF is crucial. But every penny helps.
3. Talk with your lender and find out if you can make extra payments anytime or only with your normal payment.
4. Figure out a comfortable minimum amount of money you want to keep for emergencies each month.
5. When it comes time to make the extra payment (the time of the month established by step 3), subtract your minimum in step 4 from your bank balance along with any bills you owe that month, and send the rest to your mortgage. If you know you have big expenses coming up in the following months (annual home owners insurance, car insurance, etc), make sure you will have enough.
For example, if you have $5000 in the bank, and you owe $1200 in bills that month, and want to keep a minimum of $2000 cash on hand, send $5000 - $1200 - $2000 = $1800.
6. Watch your mortgage balance go down without spending $3500.
also, if you are looking at aggressively prepaying your mortgage, you should look into getting a no cost HELOC. You will likely be “house rich, cash poor”, so get a HELOC that you can tap your growing home equity if an emergency arrises (medical, death, loss on income, etc). Do this soon, as credit is hard to get if you lose your job, whereas now, it’s not. Otherwise, don’t ever use it (like when those plamsa TV’s are on sale, resist, resist!!).
If the UFF dissappears, who knows what happens to the server/software. I’ve heard one agent say that the UFF put some money with some 3rd party that would pay for maintaining it, but i’ve also heard agents claim MIT students developed the algorithm, while others said it was GE propulsion labs, other said it was NASA. the only thing I know is I don’t beleive anything they say.
I cannot stress enough how easy it is to do this stuff on your own. Every accellerator out there revolves around sending in prepayments, which everyone can do on their own already. They just want your money.
I’m happy to answer any other questions you have.
Calvin, I see you’re taking the high road again. No surprise there.
Maybe this is something else to consider:
Let’s say that there are 1,000 people whose numbers exactly fit your scenario. If you were to tell them about a perfect prepayment plan, how many do you think would do it? I’m sure most, if not all would try. In the end, I’m guessing that you would have 1,000 different payoff dates.
I’m not suggesting the MMA is perfect plan or solution, nor is it the most convenient system. If there were a system (let’s say a loan), that performed this function conveniently, do you not think people would purchase this system?
This is the 21st century. As sad as it may be, convenience, more often than not, beats effort. Give them an option, and they will choose the path of least resistance. If it costs a little extra for the convenience, I’m sure there are plenty of those who would gladly pay.
I will give you this, $3500 is probably a rip off for those who are capable and have the will power to do this on their own. There are other accelerated equity programs out there that are more affordable and convenient.
Another thing: Exchanging anonymous insults is a game for the weak and cowardice. If you wish to continue, you’ll be playing with yourself.
Best
I like how he says I’m taking the high road, but also accuses me of taking the low road in terms of insults. These guys can never get their story straight, not even within the same post.
I will agree with Dan in that take 1,000 people with the exact same income and mortgage, and you will get 1,000 different payoff results. Of course, you will get 1,000 different payoff results with MMA as well as it’s the spending and changes in income that effects it. you will just get 1,000 results that are $3,500 plus interest behind the 1,000 prepaying without it.
I also like how he says give them an option and they will take the path of least resistance. I would call $3500 a lot of resistance.
It’s not like a 100 year old prepayment method is hard, or there’s a fee involved. Write a check each month equal to your extra income. Yeah, you are right, that’s tough. (note sarcasm). Or you could write a check for what the MMA tells you to write it for, because you’ve been told it’s optimal, even though it’s not optimal versus prepayments, and believe it or not, it doesn’t even do the MMA optimally. The optimal MMA approach will have your HELOC reach exactly zero each and every month, which means you will never draw more than your income. The very first month usually sees ~2.5 times your income in withdrawl (on top of the $3500 fee).
Notice how Dan stopped arguing dollars and cents. He knows the numbers are not on his side. If this program can’t even payoff a simple mortgage faster than a fixed prepayment schedule, do you really think it is worth $3500?
The article is a moderate at best description of this system unfortunately the author did not understand the very product they were writing about. This is not uncommon. Heck, the ‘mortgage professor’ above is in the stone age and does not understand it either.
In the ensuing comments, Calvin makes some good points but is apparently not very much in touch with the reality of most Americans (i do not mean this as an insult again he knows math very well it is simply an observation).
I have been in the financial services industry over a decade and deal with people every day who truly need this type of system. Calvin’s 100 year old method works everyone but unfortunately the majority of people do not - i repeat DO NOT - stick to it. I doubt Calvin understands this or even believes it a possibility. However, Calvin is an engineer and having many coworkers & friends who are engineers I have learned many are not wired like everyone else in many cases (this is a compliment). In particular, the better the engineer the more stringent to their ideologies (case in point with Calvin) I would not doubt he is a fine engineer.
However, Calvin is way off base.
I am not plugging anything I am speaking my experience. I am one of the people who agreed with Calvin and advised everyone to “do it on their own.” This was a mistake and I WAS WRONG. People try for a month or 2 then back to the same old habits.
Calvin is an engineer and astute with math and is one of the few with the discipline to adhere to his method. Another point to be made is many people do not want/need to payoff their mortgage. However, this again is not the majority and possibly a separate topic altogether.
Do I think Calvin should buy it? No, of course not he is doing a great job himself. On that note, of course you can do this on your own. There is no patent on math.
I agree with Calvin many agents are way off base I don’t know any industry that does not have people off base.
However, anyone reading please know this is not a ’scam’ or ‘crapware’ or any of the other ludicrous statements made. Nor is this the ‘only & best way’ or ‘miraculous’ in any manner. It is a system that works for a great many people and the ones using it are enjoying it a great deal.
This system is working for a great many people & putting them in a much better financial situation than they otherwise would have been. Again, I am not plugging or telling anyone anything besides the following:
‘This system works for a great many people. It is very little understood by even most financial planners, mortgage brokers, accountants, bankers, etc. at the moment as it is new to most Americans. If you are interested find out the good, the bad, understand what you are doing & be honest with yourself. Take everything with a grain of salt, anyone trashing the system is missing something and anyone saying it is doing anything ‘miraculous’ is out of their mind. The truth usually lies in the middle somewhere.
good luck
Rich, I applaud you for stating that this is a behavioral tool and nothing more. While I agree with you that every profession has it’s idiots, most professions seem to have them in the minority, granted, with a few exceptions. My problem is that the liars and the idiots in for this company seem to not only be the norm, but the vast, vast majority. I’ve conversed with maybe 3 people who are agents that are honest and straightforward, and educated about the product. I’ve come across literally hundreds of agents that have no clue as to the math behind the product, it’s risks, or basic financial principals (opportunity cost, present vs future value of money, etc). And that doesn’t even touch the outright lies by agents. The same ones that are present in the boilerplate presentation downloaded directly from the UFF web site (ie, this isn’t just a few rogue agents). Then there are the NASA claims, the MIT claims, the Harvard Business School claims, people making claims their spouse is a VP at a major bank and use it, etc. We all know it’s BS. If the product is so great, why can’t they sell it without all the BS? Why do 99.9999% of the claims have to be false?
I will still wholeheartedly disagree that people need a tool like this. The truth would work if they did. I know about this software because one of my friends outside of work, a low paid state employee, approached me about the product. She attended one of the seminars (free luckily), and was going to buy it. She has no real math background, and wanted my opinion since she know’s I’m honest, have a math background, and I’m also familiar with some of her financial troubles she’s had in the past. Once I stepped her through what it was doing, and how it was just a big fee to spend her own money, something she can already do, she was outraged. We set her up with her budget, when to send in extra payments if she wanted to, and she has been happily recovering from her debts ever since (it’s about a year now). She is doing just fine on her own, no more help from anyone. Why? Because she was actually sat down and learned something about her finances rather than being handed an expensive black box that doesn’t do anything but take $3500 plus interest. It’s funny to hear her giggle with pleasure when she is talking about some savings she made so she can add more to her prepayments, or put more into her kids’ college funds.
and how many people have got into this program only to run up their HELOC like they ran up credit card debts? If some of the sob stories I’ve been reading are true, the number is not zero. While it takes some amount of discipline to do this on your own, it might take even more discipline to do this through the UFF, sadly.
But, again, rich, kudos for at least telling the truth about the fundamentals of the program. It is, indeed, nothing special.
I have been researching MMA and I think I understand the concept. My question is, if it’s so great, why can’t I find a single person who is using it? I would like to hear from someone who has bought into it and is using it to testify to that it delivers what it says. The only people who are talking about it are sales people, who are not the best sources for information.
carlea, i am probably one of the biggest opponents of this system you will find out there. that said, it will do what it says it does. if you follow its directions and send all of your income to the HELOC, which in turn sends all of the extra money to the mortgage, you will pay off your mortgage in about the amount of time their analysis will tell you.
of course, if you just figure out how much money you don’t spend each month versus what you earn, and send that in with your mortgage check each month, you will get better results, because it’s basically the same thing and the $3500 upfront acquired debt isn’t there. UFF agents will just tell you that you don’t have the discipline to do that because no one does, despite the fact that many people do.
if you have $100 extra income each month, you will spend the first 35 months repaying the $3500 debt just to get back to square 1. the effect of running your money through the HELOC versus just sending the extra income to your mortgage is minimal at best, more costly at worse.
avoid this product like the plague and just do it yourself. it’s cheaper and faster.
as for finding an acutal user, on the net, they seem to be everywhere, though they seem to be salesmen as well, or salesmen posing as users. finding one in real life, not as easy.
My father-in-law is trying to sell the MMA product. My husband asked me to research it and make sure his father is not buying into a scam. I have THOROUGHLY enjoyed researching it! I’ve enjoyed reading this thread! WOW have I learned a lot!
I too have found there are MANY accelerated mortgage programs out there. While reading some thoughts entered my (far from mathmaticly inclined) mind.
I, and most of my friends, live paycheck to paycheck. We don’t have the extra $1000 a month. I’m VERY lucky if I have $100 left over after expenses. I have two small children, rising rent, gas, daycare, blah blah blah payments.
My question. If I was paying for a home and could only afford MAYBE $100 every few months to put toward the primary, am I right to assume that the MMA would be a major waste of my money?
Another observation. If I have a hard time sticking to a new years resolution, as does most of the human race, how can I expect myself to stick with a program that tells me to pay so much money when I KNOW I don’t have that money?
I’m biding my time to purchase my first home. With the real estate market today, if I don’t own in the next 12 months I’d be crazy. I’ll admit, I’m ignorant to much of what has been discussed on the thread, HELOC’s and the rates, etc. etc. I am intelligent enough to know that I can’t afford $3500 for a “plan”. In all my research I too couldn’t find a person like me using the product and NOT, I repeat NOT trying to sell it! What’s up with that?
It was funny to read Calvin catching Dan in changing numbers, etc.
Dan, explain to me how someone who will be purchasing a home, with NO money down, NO savings, first time home buyer, can benefit from this program.
THANKS!!!
Tracy in Florida
“Dan, explain to me how someone who will be purchasing a home, with NO money down, NO savings, first time home buyer, can benefit from this program.”
That’s easy, the benefit would be Dan earning a $1000 commission and the UFF $2500 profit. Oh wait, I thought you asked how THEY would benefit.
You would benefit by….. well…….um…… ok, you won’t benefit. But isn’t them getting all that profit not reason enough? I mean sure you will be $3500 deeper in debt, and anytime you have extra money to send to the mortgage you’ll have to live with it not being quite as effective had you not bought the program and just paid it yourself right to the mortgage, and you’d be placing yourself in more risk by running up HELOC debt you may not be able to pay down. But think of Dan’s children. Think of the UFF company employees that can buy new cars in exchange for providing you with….ok, nothing, but think of Dan’s children.
:)
Just to throw a twist into this have any of you researched the mortgage product backed by GMAC?
http://www.bankrate.com/brm/news/mortgages/20061102_equity_accelerator_mortgage_a1.asp
it’s the same premise as the UFF’s approach, it’s just tied together directly with your lender. it will do what it says it does. No one is saying this approach doesn’t work, the critics are just saying no one should ever PAY for this ability, because they already have it. Since the discretionary income going to the mortgage is what does all the work (read: 99.5% of the savings), just send in your extra income to the mortgage each month and have a HELOC for emergency purposes only.
the savings of the HELOC effect are so small, that anytime you actually pay for this added savings, you have already spent the savings right off the bat.
Calvin, you sound like a guy I work with called Chris. Anyway, you are just more passionate about it. I too work in a big company and make 100k a year. I have a mortgage that plans to be paid off in a little less than 5 years. I only have about $1000 in discretionary income, so you can kind of kick the big yearly money out the window. Yes, I am using the program. Yes, I signed up to sell this program. No, I have not sold the program because I just tell who ever wants to hear about it and I don’t persue it like I should to sell it. I was skeptical as well, and I when I saw the videos and saw how it worked, I had to explain it to my Mortgage broker how it worked, because like you said, they don’t know too much. Unfortunately my buddy Chris, just like you, wanted to prove to me that he could do much better by doing a spreadsheet. He added my discretionary income as principal payment every month towards my mortgage. Unfortunately I ended beating him by 2 years if I remember correctly. It was a while back. My question would be, If I only have $1000 in discretionary, how come the program told me to pay an additional $4612.81 this upcoming month. It does not make sense if all I have to do is send just what I have left over. The other thing I found out was that when I talk to people who make the amount of money that we make and have the discretionay money that we make it is so easy for us to say “I can do this myself.” I didn’t understand this at first till I realized the reason we could do this is because we have all this extra income and honestly if you put more or less than the optimal it doesn’t matter. We could recover if we mess up. But I want you to tell that to a family that together makes in a month what you and I could make in 2 weeks with a little overtime. Things change. The math becomes more difficult. It takes more courage to say they could do it themselves. It becomes more difficult, before you ask, because finances are tight and it is never the same per month. Yes, $3500 seems like alot. What I realized was this. I already had paid for the program. How you ask? Well, I financed $160,000 at 6.5% for 30 years. That is a little over $204k in just interest after it was all over. Well, what I realized was, since I am not paying this $3500 out of pocket (yes it came out of my Line of Credit) it is really interest that I am paying. Well, if it is going to save me over $170k in interest, then whatever it was I end up paying in interest using the program subtract the $3500 from it. So technically, the program was free, because I didn’t write a check out of my checking account, and those $3500, well I just took that from the interest I was going to pay the bank anyway. So, yes if it were free it would be great. Oh wait, it is free. By the way, I got the program 3 months after I financed.
Also the other thing I like about it, it works like a finance planner. Its like having my own financial planner. I could budget future expenses into it, extra savings, or any other thing that I wanted to. It would constantly update itself. The other thing it does it shows me if its better for me to put things into my line of credit or keep them separate. For example, what would happen if I put my credit card balance under the Line of Credit. What happens if I decide to pull extra money for something else. How much time do I have left if I loose my job before I run out of money.
If you are do it your way, I suggest get a HELOC now even if you dont use it. You agree that the money you put extra into your house cannot be touched again unless you take out a HELOC. You just can’t ask your mortgage company to mail you back the extra payments. So, if you were to have lose your job, that would not be the time to ask for a HELOC since they will unlikely give you one. So my advise, get the HELOC before you need it.
john, the amount of income doesn’t change a thing. the amount of expenses doesn’t change a thing.
math is math is math. whether you are talking 5% of 1,000 or 5% of 10,000, it’s still 5%. This isn’t a matter of “I have a ‘gut feel’ of the math.” This is “I’ve done the math.” I’ve done the calculations.
Why did your software tell you to prepay $4k when you have $k in discretionary income? Easy, because it isn’t smart enough to calculate opportunity cost. 2nd, how do you know $4k was the “optimal amount”? Because it told you so. The cheif minister of information also told us Sadam’s armies were destroying America’s up to the day of his capture. Just because software tells you something, doesn’t make it right.
You say the $3500 wasn’t out of pocket. Hehehehe, did you ever buy that line hook line and sinker. You have $1k in discretionary income. Well, the first 3.5 months you spent getting back to square 1 while someone else in your exact situation would have an additional $3500 PLUS INTEREST in debt paid off.
Opportunity cost SHATTERS the UFF. First, obviously the $3500 that goes to the software that could have gone to the mortgage destroys any potential savings. Then there’s the HELOC shuffle effect. Sure it can save a few bucks. Like about $1 or $2 a month versus prepayment. But to keep the HELOC interest, at it’s higher rate, from becoming a bigger number than the mortgage savings, you have to use your income to offset the balance. Well, that’s income you could have stored in the bank for a few weeks instead of your HELOC. You lost the opportunity to earn interest to save those few bucks. That lost interest is generally greater than the HELOC shuffle savings.
You can say my math is wrong. Fine. PROVE IT. Take our challenge and simulate a sample problem, start to finish, you with your $3500 software, me with a simple checking account. YOU’LL NEVER WIN! Not only will the MMA software fail by thousands of dollars, it won’t even run the MMA approach itself optimally. $3500 for a sub-optimal approach to a sub-optimal technique. Yeah, money well spent. NOT!
$3500 not out of pocket. That’s hysterical! You really bought that line? Really? Is it the fact that your bank paid them and then you paid the bank that makes you think it isn’t out of pocket or is it the fact that you paid it off over time?
Free software, congrats on a new near-low in MMA/UFF logic. I’m sure you would have no problem with them charging $35000 since it is still really free.
Again, put your money where your mouth is and take our challenge. No one ever takes it because they know they will lose.
PS. Yes, I got a no-cost HELOC the day I bought my house and never touched it. I understand the risks as well as I understand the math.
Calvin,
I have a very green question… why would you want to take out a HELOC when you first purchase a home? Man, I need to do my homework!! I feel like McCain must feel… I’ve heard ’bout all them thar big fancy financial words. Gotta do the homework.
I took out a no-cost HELOC with the intention of never using it. I knew I would be paying ahead on my mortgage to the detriment of my savings/investing. If I put $1,000 into my savings account, I can withdraw it to spend it on whatever. I always have access to that money (barring extreme circumstances). If, instead, I put that $1000 towards my house because my mortgage rate is higher than my savings rate, I can’t just turn around and tell the bank I want that money back. With a HELOC, I can, though at a cost (HELOC interest). Not having a lot of savings while having a lot of equity is dangerous. It’s often referred to as “house rich, cash poor.”
I had 6 months expense in the bank while I had years worth of expenses in equity. If I lost my job, had major medical expenses, etc, what would I do for money? I could liquidate my other investments, or I could tap my equity through my HELOC.
Anyone throwing the bulk of their savings should have a HELOC to access that equity. And they should have it now, not later. If you have a job, a house with equity and good credit, you can get a HELOC. Take that job away and your chances drop significantly.
Hope that helps.
Calvin Rocks!! Enjoyed your posts.
I just started reading about this and while I’m not a finance professional, I’m pretty good at math and at spotting a scam when I see one.
Want a free alternative folks? Here goes:
1) Go to bankrate.com or similar mortgage calculator. Plug in amount owed on mortgage and desired time to pay it off (15 years, 10 years, 8.2 years, whatever).
2) Using the difference between your current monthly principal payment and the one displayed to pay off your home in your selected shorter time period, set up a separate savings account (preferably an online one at ING, E*trade, etc. that earns a decent 3-4% rate) and then have your employer set up a monthly debit from your paycheck into that savings account for this amount (almost all employers should be willing and able to do this for free — contact your payroll department and they’ll help you — it’s very straightforward).
3) Now, in 15 years, 10 years, 8.2 years or whatever you will have saved the amount needed to pay off your remaining principal plus have the accrued interest to spend as you please. This will also give you access to your money during this time should an emergency arise.
This will take you all of 15-20 minutes of work to do and then you simply have to not touch that account until you have the money to pay off your principal. There’s no extra monthly amount to pay (since this is really just loaning the bank your money for their use) and nothing to remember to do other than to write that final check to your mortgage company once the cash is in the bank.
No math degree or convoluted HELOC scheme needed. Have a happy weekend!
Richard
What Calvin says makes sense but if your only intent is to pay off your mortgage quicker and you want to get out of debt at the same speed,,, you might want to look into something called a SMART Loan from CitiCorp Trust Bank. It is a complete refinance package with built in acceleration of principal payoff that is tailored to the home owner’s income stream. The trick is using simple daily interest with the amortization recalculated AT THE TIME OF PAYMENT as opposed to the typical scheduled interest which only allows application of principal payment on ONE FIXED DATE each month no matter how often you pay.
As an example a simple daily interest mortgage on $100k at 7% for 30 years would reduce to a 22yr 8mo mortgage saving $45.5K by simply going to bi weekly payments instead of monthly. If you throw in an extra $100 per month toward the principal it pays off in 17yr 1mo saving $70.6K.
The really good part for me was getting rid of all of my other monthly payments and saving over $700 actual cash each month which i can invest.
There is no scam or slam or jam, just a simple mortgage transaction (YES with closing costs) that saves tons of time and interest and monthly cash. I don’t think your MMA can get any better than that.
I am a very happy $MART Loan customer of CitiCorp/Primerica.
Calvin should get $3,500 from all of us…GENIUS! BRAVO! The sad thing is that G. Edward Griffin who debunked the dark truth about the Federal Reserve and the I.R.S., supports U.F.F. I have to send him an email next with a link to this thread so he can see the truth.
I am an ex-loan officer, because our banking system is made to cheat the consumer. I am an ethical person and quit the business after being in it for 6 years. Great job to Calvin. Never buy any product or service from a company that claims to be a MLM-Multi Level Marketing company. Basically they are what is called Pyramid scams that started back in the 1920’s and were taken to new heights in the late 70’s and 80’s.
Calvin: what is the name of the Credit Union you bank with?
my credit union is just a small local one, nothing fancy. always preferred them to the big banks because they pay better interest, charge less interest, and always provide great service.
WW - the product you are talking about IS basically the same thing as the MMA, it’s just more “hands off” in that you don’t have to do big money transfers yourself versus the UFF approach. Again, you are PAYING closing costs to get the Citi product that does what you already can do without spending one single dollar. At least the Citi product is more hands off, but if you are spending more than $100 for it, you are leaving money on the table.
As for statements made about UFF’s MLM aspect. I am a opponent of MLM type products, but I will say that the MLM aspect of this product is pretty small. Generally, the FTC goes after MLM type companies when the bulk of their revenue comes from “sign up” fees rather than selling actual product. UFF’s agent fees are much smaller than their product fees, and I don’t believe the fee’s are split up among some sort of upstream, they just go to UFF.
My beef with their sign up process is they require no training/knowledge/etc of their agents, nor provide any of it. My dog could become an agent if her check clears, and quite frankly, my dog has equal qualifications to understand and sell this product honestly as most of the agents out there (ie, none). “Ruff, Ruff” at least provides no knowledge, versus providing intentionally misleading knowledge that further confuses and misinforms.
Calvin,
There are no extra charges for the Citi product. The closing costs are the same as for any new mortgage, which this is. I beg to differ that you can do the same thing for yourself for freewith your current mortgage. If you have a conventional fixed rate, SCHEDULED interest mortgage, you cannot pay it off as quickly as you can one with simple daily interest. It is the science called mathematics,,, just ain’t gonna happen. You certainly can’t lump in your revolving debt on your current mortgage without getting a new first or a second. Actually the $MART loan is VERY different from MMA. The agents are licensed also (differs from state to state). I don’t know much about MMA but I have first hand knowledge on $MART and would recommend it to my own Grandmother. I know some of the flakes that are pushing MMA’s and that alone is enough to turn me off of them.
Like Stephen Covey says in his books, if it is not WIN - WIN for both the buyer and the seller it is NOT a good deal. Thanks for the facts that you presented. I think we can all see who wins (and who does not) with an MMA.
WW, in your first sentence, your argument falls apart. “Closing costs” = costs. You aren’t going to argue that one. If the rate on your Citi loan is not better than your existing loan, you are going to lose. Big time actually (meaning by thousands of dollars).
Sure, you can save a few dollars with this approach over prepayments alone, but the savings will never touch standard closing costs (thousands).
if someone is going to refinance anyways, AND the rate is at least the same as the loan they would get if not better, AND the closing costs are not more, than sure, go for it. But that’s a lot of ducks to get in a row.
You can say the difference in interest calcs makes a lot of difference, but it doesn’t. Very little in fact. It’s all about getting your discretionary income going towards your mortgage.
And yes, one can easily do this on their own without the product. I did it, 30 year loan in roughly 6 years. It’s ALL about discretionary income. Less than 1% of the savings comes from daily versus monthly income calcs. The math says that. I am more than happy to step through an entire mortgage example using the two methods.
And for the record, yes the MMA is the same as the Citi product in practice, it’s just combined the loans, which really has no effect, it just simplifies the process. Here’s a hint for you:
$200k mortgage @ 6% and $5k HELOC @ 6%= $205k debt. if you deposit $5k income into the HELOC halfway through the month, you pay 6% on $2500 for the HELOC = $12.50 for the month, plus 6% on $200k = $1000, or a total of $1012.50 interest for the month. Not look at 1 loan like Citi’s, $205k @6%, deposit $5k halfway through the month, average balance of 202,500 @ 6% = $1012.50. Interest paid is the same, whether part of it is fixed monthly or one big daily balance loan.
now, the rates are usually not the same. if the Citi loan carries a slightly higher rate than the best mortgage rate you could otherwise get, you will get screwed hard as in the beginning, your large mortgage balance sees a higher rate, which equals a HUGE cost increase.
again, the Citi product really isn’t anything different or revolutionary. Just another way to prepay your mortgage, the thing everyone can already do themselves FOR FREE.
again, if you want to compare the two approaches, you with extra closing costs veruses a mortgage with the same rate and prepayments, I am more than happy to show you it doesn’t work as well as you think (ie, you will never recoup the closing costs unless the rate is lower).
For Carlea,
We learned about the HELOC shuffle from Freedom Financial Group. We are not
selling anything and we have been doing it now for a year.
Yes we paid too much for it, but I view the cost as payment for education.
The primary advantage to using the HELOC shuffle over just dumping money into
your mortgage is access to funds. I always felt the need to keep about 10,000 dollars
socked away for broken arm insurance. With the HELOC we dumped that money
into the HELOC secure in the knowledge that we had access to funds in
an emergency. That psychological prop is huge for us.
We retired our second mortgage rolling it into a 50,000 dollar HELOC in March of
2007. Our initial refinance left us with a balance of thirty thousand dollars. Then
we dumped ALL of our savings and paychecks into the HELOC. By doing so resulted
in an immediate savings of sixty dollars a month from retiring the original second
mortgage. By May we had paid the HELOC down to zero. That First cycle instead of
paying on the primary mortgage we replaced our well pump costing us six grand.
The HELOC shuffle consists of two parts. Placing your paycheck into the HELOC to
keep the average daily balance is part one. Using your credit card grace period for
an interest free loan is part two. We purchased the well pump on the credit card and
by sheer luck were able to break the total six grand cost into two billing cycles or
a total interest free float of forty six days. We purchase EVERYTHING on the credit
cards interest free keeping a close eye on that grace period.
Our particular HELOC cycle is four months from maximum balance down to zero.
Freedom financial International teaches to respect a HELOC balance two and one half
times your net monthly take home pay. This number is your never exceed number
(except in dire emergency, for us that means injury or a funeral) Harj Gill recommends a HELOC no greater than one months salary so there is no way you
can bury yourself.
So, by August of last year we were ready for our first mortgage lump sum. We dumped a very conservative eight thousand that first time, still gaining confidence
in the system. Everything worked as advertised so in December we dumped ten grand
and come the end of April 2008 we have increased it to the level of our comfort zone
which is 15,000 dollars. At that rate we have a eight lump payments remaining over
a total of thirty three months. Our primary mortgage balance is 145300.00. But
wait, 15000 x 8 is only 120,000 dollars. The rest will be paid by interest compounding
in our favor which is roughly fifty bucks for each ten grand of discretionary income
applied to the primary mortgage.
Our original HELOC was taken out at 8.25% By keeping the balance low we saved half
what we were paying toward our second mortgage from the very start. But with interest
rates dropping as they have our HELOC is now 0.4% LOWER than our primary mortgage. We have used this to our advantage by increasing our never exceed number on the HELOC from 15,000 up to 20,000 without increasing the monthly interest payment which cycles between twenty five and seventy five dollars a month.
We only apply 15,000 to the mortgage. The remaining 5,000 is reserved for other
family projects.
The primary advantage to this system is a change in the way you look at your money. Rather than seeing your money month to month I now look with a big picture
view. If you ask me how much money I have I will tell you I am flat broke. This
is true because regardless we have in our pocket or in a savings account we still are
145300 dollars in debt. We have no money we are in debt. This view discounts what
the house might be worth if we sold it because that is potential rather than in your hand.
I believe in this system and would like to see the IDEA taught to every high school
student in the country. Then they can use it or not as they choose. Had I known of this technique twenty years ago I would be retired today owning 4-5 decent properties
paid for free and clear.
I paid five grand for the education. You have it for nothing so you are that much further ahead of me. For the naysayers, I will be free and clear in thirty three months.
Will you?
Calvin,
- WW
Thanks for the “know it all” attitude you have adopted. Obviously you could not be convinced by facts if they bit you in the butt. All I know is what the SMART Loan did for me and that it is NOTHING like the MMA. You retain your opinions and I will retain mine but I don’t think it behooves either of us to bad mouth someone elses product that we know virtually nothing about. Until you are well versed and up to speed on the product from CITI, you might want to be a little careful what you say about it. The largest corporation in the US just might not take kindly to your remarks.
BTW
The RATE does not matter as much as the TIME you are exposed to the rate. Total Interest = Rate x Time. And yes 5% for 6 years is a lot less than 5% for 30 years or 7% for 15 years. The BIG question is,,, Who has enough discretionary income and DISCIPLINE to accelerate a 30 year to a 6 year???? Not many I would imagine.
WW, you don’t by any chance imagine that it is you that don’t understand the product?
Time exposed to the rate…. that’s what I was showing you with the math. This isn’t a “know it all” attitude, it’s just a simple mathematical explanation.
i was trying to show you that the minimum balance for your SMART loan is exactly the same as a fixed rate loan. If your balance fluctuates between $150000 and $155000 over the course of the month, $150000 is charged the full rate for the month while the other $5000 will depend on how much time it spends at various balance levels.
As for who has the discipline to do a 30 year loan in 6 years? Anyone that wants to. I did it, and I know plenty of others who are doing the same thing. But many don’t because they don’t want to prepay the cheapest loan they will ever get. And a person can spend as frugally or as aggressively with the SMART loan the same as credit cards or anything else.
You think Citi is going to come after me for explaining the math behind their product? And who’s bad mouthing it? Not me, I’m just explaining how it works, which is basically the same as the MMA product, just a combined mortgage/heloc versus separate. I don’t think it’s worth it, just like I don’t think MMA is worth it. But Citi isn’t out there saying yourcashflow doesn’t change, no extra payments made, etc. UFF is, so I bad mouth their product lightly, their price heavily, and their agents infinitely.
You say “All I know is what is did for you, and it’s not the same.” Fine, explain the difference besides the details I pointed out, math included.
I have actually sat here and read this whole blog and I have to say Dan has composed himself with professionalism and integrity.
Maurice,
Pyramid scams?
Exxon CEO, their employees, the supplier, the tanker driver, the store owner, the store clerk , the consumer. Is that a pyramid?
Real estate- National company, Regional brokers, the broker, the agents the buyer. Is that a pyramid?
Insurance- National company, regional broker, agents, secretary, consumer.
When you think about the structure of a typicle corporate American business, it is shaped like a pyramid, someone always at the top and many of us at the bottom. So, I guess all businesses are a multi-level marketing scam. Why? Because you buy things you want (not need) based on multi-level “MARKETING SCAMS AND SCEMES” put in front of you everyday through advertising and marketing most generally you are unaware of. Get a grip lady!
Calvin,
You are a math geek that has no common sense. You are absolutely pathetic. The MMA is simple math and beyond your understanding. You are what we use to call people in the Military- Nukes. Something so simple you have to nuke it to the point of not understanding the basic concept.
The person who wrote the MMA is a real math engineer that wrote a 27 page algorithm to create an optimal system that would help determine the precise time to make an interest cancellation payment. Simple banking principles that the banks use and recognize. I have seen the MMA, I am using it, and in 6 months, I have cancelled the $3500.00 fee by paying over $15,000 to my principal and cancelling over $30,000 in interest. The average monthly interest paid on the HELOC was 46.00-60.00. So Mr. math man, you can say what you will, I am living proof that yes my 225,000 house is on schedule to be paid off 100% and the HELOC 100% and my and my car 100%, in 12.9 years. Saving me almost 170,000 in interest paid to the bank. I know quite of few people who are using it now and they are greatful that it has been put to use in their life. It is not for everyone and yes you simply can make payments to your mortgage every month and pay your house off earlier. Not like this! Most of us are not disciplined to make extra payments let alone manage our finances efficiently. Even if I stoppped using it now, my $3500.00 investment, which didn’t come out of my pocket, it came from the HELOC, has gave me a heck of a return on my investment. Do the math and tell me where you can get a return on an investment like that. By the way, my HELOC operates as a checking account, I use e-pay and had no closing costs.
For all of you out there that believe in the thirty year, forty and now fifty year mortgage……….stop and think about it. You were so eager to buy a house knowing that you were going to pay back twice as much. This concept was created in the 1920’s by a two men, one a mathmatician, with the concept that homeowners are just a commodity and the rules would be set by the lenders and the consumers would be kept in the dark. The so called credit lenders would leave you with no choice but to play by their rules.
Unfortunately for them, the rules have changed over time and new opportunities have come about. Still, we as consumers have been trained to think it is ok to give our paychecks to the banks every month. No matter what way you look at it a 30 year mortgage is a lose /win situation. The bank wins and you lose. Why? If you paid your mortgage off in the 30 year term, let’s use a 200,000 mortgage at 6% interest at roughly 1200.00 a month, you would pay back 432,000 in total debt to the bank. Get your mortgage note out and it will tell you what you will pay at the end of the term. Why? It is compound interest, that’s why.
Regular Payment Schedule MMA Payment Schedule
$200,000.00 $200,000.00
Payments Interest Balance Payments Interest Balance
1 $14,389.20 $11,933.19 $197,543.99 $23,389.20 $11,425.64 $188,036.44
2 $14,389.20 $11,781.71 $194,936.50 $23,389.20 $10,687.75 $175,334.99
3 $14,389.20 $11,620.90 $192,168.20 $23,389.20 $9,904.33 $161,850.12
4 $14,389.20 $11,450.13 $189,229.13 $23,389.20 $9,072.62 $147,533.54
5 $14,389.20 $11,268.87 $186,108.80 $23,389.20 $8,189.61 $132,333.95
6 $14,389.20 $11,076.40 $182,796.00 $23,389.20 $7,252.13 $116,196.88
7 $14,389.20 $10,872.07 $179,278.87 $23,389.20 $6,256.82 $99,064.50
8 $14,389.20 $10,655.14 $175,544.81 $23,389.20 $5,200.13 $80,875.43
9 $14,389.20 $10,424.85 $171,580.46 $23,389.20 $4,078.29 $61,564.52
10 $14,389.20 $10,180.34 $167,371.60 $23,389.20 $2,887.23 $41,062.55
11 $14,389.20 $9,920.75 $162,903.15 $23,389.20 $1,622.72 $19,296.07
12 $14,389.20 $9,645.14 $158,159.09 $19,597.23 $301.16 $0.00
13 $14,389.20 $9,352.53 $153,122.42
14 $14,389.20 $9,041.89 $147,775.11 This includes paying the MMA & HELOC
15 $14,389.20 $8,712.07 $142,097.98 and in some cases other debts. This
16 $14,389.20 $8,361.91 $136,070.69 is based on about $9,000/year extra.
17 $14,389.20 $7,990.16 $129,671.65 Interest savings: $154,798
18 $14,389.20 $7,595.49 $122,877.94
19 $14,389.20 $7,176.50 $115,665.24
20 $14,389.20 $6,731.62 $108,007.66
21 $14,389.20 $6,259.30 $99,877.76
22 $14,389.20 $5,757.87 $91,246.43
23 $14,389.20 $5,225.50 $82,082.73
24 $14,389.20 $4,660.30 $72,353.83
25 $14,389.20 $4,060.26 $62,024.89
26 $14,389.20 $3,423.18 $51,058.87
27 $14,389.20 $2,746.82 $39,416.49
28 $14,389.20 $2,028.74 $27,056.03
29 $14,389.20 $1,266.39 $13,933.22
30 $14,390.23 $457.01 $0.00 $0.00
Loan amount $200,000.00
Term 30 years
Interest rate 6.000%
Monthly payment $1,199.10
Total payments $431,677.03
Total interest $231,677.03
Interest Savings $0.00
Pretty good deal huh? So lets say, hypothetically, you decide to sell your house at year 31 and your property value went up 60% in that 31 years. You could sell your house for roughly 320,000. Wow! Simple math tells me you are still are out 120,000. Doesn’t take a math genius to see that. And for those of you that move every 5-7 years, you continue to take out a new loan and pay interest all over again. Not rocket science!
Even if you could afford to send $300 extra a month you would save 101,106 and pay your mortgage off in 19 years instead of 30.
A mortgage is a closed-end loan with front end loaded interest to the banks advantage. A HELOC is an open-end loan, much like a credit card, and can be used as an interest cancellation account to leverage the banks money to pay your mortgage down. On an open-end loan the balance is calculated daily and the interest rate is calculated on the average daily balance. As is a credit card. You can buy something today and pay it off tomorrow and pay zero interest, as long as the balance is paid before the end of the billing cycle. A HELOC has some of the same characteristics. By depositing your income into the HELOC you are essentially creating an interest cancellation transaction and paying the balance of the HELOC down every week or two weeks, depending on your pay period, and cancelling interest throughout the month. At the end of the month you pay very little interest.
With the MMA you pay an average 9,000 to 15,000 extra a year. Where does that money come from, the HELOC and your discretionary helps pay the HELOC down. Using the banks money to work for you. Leveraging time and money. There are two types of people, those who understand interest and earn it and those who don’t understand interest and pay it.
MMA Payment Schedule
$200,000.00
Payments Interest Balance
1 $23,389.20 $11,425.64 $188,036.44
2 $23,389.20 $10,687.75 $175,334.99
3 $23,389.20 $9,904.33 $161,850.12
4 $23,389.20 $9,072.62 $147,533.54
5 $23,389.20 $8,189.61 $132,333.95
6 $23,389.20 $7,252.13 $116,196.88
7 $23,389.20 $6,256.82 $99,064.50
8 $23,389.20 $5,200.13 $80,875.43
9 $23,389.20 $4,078.29 $61,564.52
10 $23,389.20 $2,887.23 $41,062.55
11 $23,389.20 $1,622.72 $19,296.07
12 $19,597.23 $301.16 $0.00
This includes paying the MMA & HELOC
and in some cases other debts. This
is based on about $9,000/year extra in payments coming from the HELOC.
Interest savings: $154,798
Listen people, the whole object of this program is to use simple banking principles to cancel interest as fast as you can. Yes, you are using your paychecks to do it, yes you are using a HELOC to do it and yes you have to pay a $3500.00 fee to buy a program to help you manage your money. Look around you, we are surrounded by tons of convienant tools to make our life easy. If you want to do it yourself, that is fine. Anyone can. But how are you go to do it, when are you going to do it and where are you going to get the extra money. The HELOC allows you to leverage money. If you pay your own income into your mortgage, remember, you can’t get that money back. Try asking the bank back for some of your equity. You see, it’s not really your house now is it. The idea here is to build a tremendous amount of equity in the least amount of time without paying alot of interest.
GOOD LUCK EVERYONE! and CALVIN, find something else to debunk you loser.
Ok Calvin, maybe you can help me out here. I am was presented the UFF MMA last evening, and was pretty impressed, but still want to be cautious. I’m not just looking to pay off our mortgage, I have significant college bills for my kids to pay off in the next 6 years and no significant assets other than my equity. This system seems like a good way to manage a HELOC to pay these bills and not lose all my equity.
Most of your examples so far do not coincide well with my situation. Your ‘monthly expense’ numbers are ridiculously low. Even without credit card payments we easily have $4000 a month in expenses just for mortgage (about $1000), car payment, electricity, food, water, phone, cable tv, internet service, etc. Discretionary income? It fluctuates, but probably never gets above $250 in a month, and some months we operate at a deficit.
Why no savings? My wife didn’t work for about 5 years, to stay with the kids. And yes, we probably waste too much on eating out, and stupid crap for the kids. I’m not interested in rehashing how I got into this situation, but if you can offer a way to get through the next 6 years without using an MMA I’m all ears.
Joe,
This system will only work for you if you bring in more than you spend. Period
The first step is to take a HARD look at your finances and make a budget you can
live with. Fail to do this and you are wasting your time.
Second step is to go to Google video and look at ALL of Harj Gill’s Speed Equity videos
then purchase read and understand his book. You don’t need to purchase his or anyone
elses software. You can if you want to, but you don’t need it. I have not and I am doing
better than fine.
The third step is to obtain a small HELOC. I can’t help you much in that department except to tell you we have ours through CHASE. Just any old HELOC won’t do. Do your
homework and exercise due diligence. Harj Gill recommends that your HELOC be no
larger than one months take home pay. I think something larger for emergencies is
a better idea if you can trust yourself not to bury yourself. The Freedom Financial working number to never ever exceed is two and one half times your monthly take home
pay.
After you have your HELOC in place prioritize your debts by interest expense. Most
likely your credit cards will head the list. A key part of working this system is to
automate as much of it electronically as possible. The HELOC interface should work
just like online banking. If it doesn’t you have the wrong HELOC. Send a lump sum
to the first debtor on your list not to exceed two and one half times your monthly
take home. Once you reach this level you are done for that cycle. Deposit your
paychecks into your HELOC (by direct deposit if you can swing it - I cannot and have
a two day checking account to HELOC), now relax live your life and stick to your
budget paying all bills out of the HELOC.
You want to free up a credit card to zero balance ASAP. This is a critical tool in
your tool chest. Once this is done you will make a note of the grace period on that
credit card and begin shifting all of your purchasing to it. By never going over the
grace period you leave the payment in the heloc saving you interest.
Nothing more to do except live your life until the HELOC drifts down toward zero.
Within about 1500 dollars is close enough. Ours will get down under a thousand
this time around. When this happens a new cycle of payment begins.
That is all there is to it. Stick to your budget. Earn more than you spend. Respect
the cycle limits. Live your life. The numbers don’t matter and the bills don’t matter
because if you do it like I just told you the bills will go away - quickly.
If you need someone to hold your hand buy a year of Speed equity. If you cannot
trust yourself to stick to your budget contact Freedom Financial Group or Freedom Financial International and look at their programs. They can set it up so that you pay them one monthly sum and they will pay off all your bills (including your motrgage) for you. This isn’t rocket science. It is just a different way of thinking.
If you would like, contact me privately at baggywrinkle62@hotmail.com and I will help
you. I won’t make a dime off it, and I have no allegiance to any company. I am just
relating what has worked for us.
To everyone that has said that the MMA “is not for everyone”…..well, who is it NOT for?
Especially those promoting the product!
LD ~ You go on and on saying how much you love the MMA, then you admit that “it’s not for everyone”. Well…who?!
– I am part of a single income family.
– It’s safe to assume that we’ll have less than $100 in Discretionary Income.
– We are 2 years into a 30 year mortgage…locked at 5.5%
– We plan on selling in 5-7 years.
I know it’s tough to give a solid answer without all my numbers….but does MMA sound right for me?
Let me add to that post above ^^
Without knowing all of my balances….
My mortgage payment is is $580/mo.
Right now, I send in $600 even (applying $20/mo to principal). I then send in another $600 every year, when I get my tax return (again, directing it to be applied to principal).
That is $840/year extra applied to principal…roughly 1.5 extra payments per year.
Am I better off continuing to do this? Or will MMA allow me to get even further ahead?
Thanks in advance.
LD,
Thank you for the explanation and I am paying off my home with an MMA in 12.8 years and it would have been impossible with out it.
Calvin obviously is a very unhappy person and if he would have taken the same time writing his defense in this article as researching the Money Merge Account (MMA) his conclusion would have been much different. It sad that one person can ruin it for so many due to a selfish desire just to try and be right.
So how do you know if the program works? The proof that the program works comes in the mail every month in the form of a mortgage statement and a line of credit statement from your bank.
The system, product or sales person cannot trick you and if the Money Merge Account does not do what they claim year after year until you pay off your mortgage, UFISRT will give you the money back.
FOR ALL YOU READERS THAT HAVE DOUBT. The Money Merge Account has FIVE endorsements from companies that have never endorsed products like this before and an endorsement can make a company liable for false information, see endorsements below.
I found a website with most of the endorsements and a great FAQ section and I also called and the people are they professional and knowledgeable.
Endorsements
NBC News Investigative Team Las Vegas - http://www.gotomymma.com/site/content/media/news/news_video.htm
Mortgage Planner Magazine - http://www.gotomymma.com/site/content/media/mortgage_planner/mortgage_planner_mag.htm
Broker Banker Magazine - http://www.gotomymma.com/site/content/media/broker_banker/broker_banker_mag.htm
Personal Real Estate Investor Magazine- http://www.gotomymma.com/site/content/media/personal_investor_mag/personal_realestate_mag.htm
TrueWealth Magazine - http://www.gotomymma.com/site/content/media/true_wealth/truewealth_mag.htm
Don’t take my word for it read these great articles and do your do diligence in your research.
I am sure you will arrive to the same conclusion I did and don’t listen to all the negative Betties trying to sound smart… The first question you should ask them is are they mortgage free and are they wealthy then you might want to listen, but they won’t and cannot tell you how to leverage the banks money at almost no interest because they don’t understand the MMA well enough to do so….!
If you cannot Leverage some else’s money it is very difficult to become wealthy. This what all wealthy people do Leverage other money to create wealth.
The MMA allows you to do that with minimal risk. The only thing that can go wrong is if you are not honest with the program, but that is the same with any program you use whether it is your bank account or other software.
If you don’t use the MMA I can guarantee that will pay more than double the purchase price of your home and when would like to own your home in 10 -14 years or 30 years. Check the note you signed with the lender if you don’t believe me.
Raw,
When we began our program the estimate done for us projected payoff free and
clear in seven years. Freedom Financial International uses Pay Accel to run the numbers
then they add a year for unforeseen life expenses. Whatever your financial position
or your level of commitment can be translated into time till your goal is achieved.
As I have mentioned this idea is mainly a reorientation of the way you look at your
money. You can do it without using the HELOC if you enforce it with discipline. In our
case, we are dumping fifteen thousand dollars from our HELOC directly onto our primary
mortgage at the end of April. In essence, borrowing on our equity to pay off principal.
We could also do this without a HELOC. However, it would require us to save the 15
grand up first to drop on the primary mortgage, and delay by the number of months
required to save that much up. Why is this important? Compound interest is why. For
each ten thousand dollars of principle paid using our discretionary income our amount
paid to principle in our regular house payment increases by fifty bucks and the interest
paid to the mortgage company decreases by fifty bucks. So what you ask? The bigger
lump sum you drop and the earlier you drop it saves you money in interest not paid. Or put another way, it translates into shorter time till goal achieved. Take any amortization
program and run the numbers. For the example you gave. It is more beneficial in money and time saved to drop that 840 bucks all at once in January than it is to
kick in seventy extra bucks every month. That is where the HELOC come in. More,
sooner, faster. For our situation we are doing 15,000 dollars every four months added
to our regular payment for a total of $3750 per month paid to the mortgage. Doing
the lump sum saves an entire year vs doing a smaller payment every month.
Once you begin thinking this way you can make an informed decision to buy a new
car/gadget/toy knowing full well that the penalty will add (x) number of months to the
time till goal is completed and carry a penalty of (y) dollars in extra interest paid. When we realized what was going on we got very aggressive slashing our budget to
the point that we are effectively paying 62% of our take home pay toward the primary
mortgage. Doing this we have cut our initial estimate of seven years down to thirty three months. We paid over thirty grand last year and if we behave and mind our
budget we will do forty five grand this year. Of course this pace is not sustainable.
Our plan is to allow the average balance in the HELOC to creep up through this year
to put the principle of more faster sooner to work for us, then relax a bit next year
while we pay our HELOC back down while reaping the benefit of extra bucks
going to principal from our regular payment. The REASON we are comfortable doing
this is the interest rates have dropped. We opened our HELOC at 8.25% and it has
since dropped to 5.25% which is lower than our primary mortgage. Our goal is to keep the interest paid to the HELOC to around fifty-sixty bucks a month on average.
A balance of twenty grand at 6% results in a montly interest payment of 100 dollars.
Dropping that interest rate to 5.25% saved us $12.50 OR we can increase our lump
payment a bit more and keep the same level. Mind you, as you drop your paycheck
into the heloc the monthly payment ebbs and flows. At the moment, my HELOC
balance is 2100 dollars and my monthly interest fee is seven bucks. We are going
for the average over a four month period.
You can do it all without the shuffle, but you won’t get there as fast. That is the magic. Of course the best method of all is to enjoy a windfall and write one check
for the entire balance of all your debts. If you have an in, I’m all ears.
Forgot to add:
Even if you only intend to stay in the home for 5-7 years this is good for you because
you are increasing your equity when you do sell. Thus you have that much more to
roll over to the new home. This is good for you even if your housing market crashes
because it will add to the cushion you have to protect yourself from going upside down.
Unless you are in a really volatile market like Las Vegas, California, or Florida I suspect
that the rest of the country will drop by roughly the same amount when it all crashes
down. Even if you lose fifty percent of the value of your home in paper fiat dollars, what
would it be worth to you to have that home paid for free and clear. That is being bullet
proof. The relative value of the home remains constant to other properties you might
replace that home with. Sure you lose paper/electronic digits. But so will everyone else.
Had I known of this program twenty years ago, I would today own at least four, possibly
five properties paid for free and clear and I would be retired.
Use the principal of compound interest in your favor. the 870 dollars is more effective
if you dump it all into your principal at once in January than it is to pay seventy dollars
a month extra over a year. The more you can pay in a lump and the earlier you do it
the better off you are. This is the power of the HELOC. For us, each 10,000 in discretionary income added bumps our principal payment up by fifty bucks and the interest
deceases by fifty bucks in our regular monthly payment.
Even if you only intend to stay in the home for 5-7 years this is good for you because
you are increasing your equity when you do sell. Thus you have that much more to
roll over to the new home. This is good for you even if your housing market crashes
because it will add to the cushion you have to protect yourself from going upside down.
Unless you are in a really volatile market like Las Vegas, California, or Florida I suspect
that the rest of the country will drop by roughly the same amount when it all crashes
down. Even if you lose fifty percent of the value of your home in paper fiat dollars, what
would it be worth to you to have that home paid for free and clear. That is being bullet
proof. The relative value of the home remains constant to other properties you might
replace that home with. Sure you lose paper/electronic digits. But so will everyone else.
Had I known of this program twenty years ago, I would today own at least four, possibly
five properties paid for free and clear and I would be retired.
So, after hearing my story:
“My mortgage payment is is $580/mo.
Right now, I send in $600 even (applying $20/mo to principal). I then send in another $600 every year, when I get my tax return (again, directing it to be applied to principal).
That is $840/year extra applied to principal…roughly 1.5 extra payments per year.
Am I better off continuing to do this? Or will MMA allow me to get even further ahead?
– I am part of a single income family.
– It’s safe to assume that we’ll have less than $100 in Discretionary Income.
– We are 2 years into a 30 year mortgage…locked at 5.5%
– We WILL SELL in 5-7 years.”
…Don sounds like he’s on the side that MMA is great for me. Who, on the other side, can argue that I would be better off just continuing to do this…and NOT buying MMA?
I am in favor of you doing what is in your best interest after you have a clear vision
what your options are, and I hope that MMA is being used in a generic way rather than
refering to the United Financial MMA product. It has been demonstrated than on other
boards that you will come out behind financially when you include the 3500 dollar fee.
When I got into this there was MUCH less information available in America about this
concept. My wife and I invested over a hundred hours exercising due diligence research
before committing to the FFG program which cost us over 5 grand. It was too much yet
I view it as money well spent on education. You don’t need to spend that much now if
you do your homework. All you really need to do is download an amortization program
which allows prepayments and run the numbers yourself. If I were doing this again
today I would buy Harj Gills book and a years access to his Speed Equity
program. That will cost you two hundred bucks and give you the same training wheels
MMA will. But remember, if you do your homework you won’t need anyones software
to make this work for you
Once we realized how powerful this concept can be we became very aggressive by
slashing our budget and dumping over 62% of our take home pay into our mortgage.
Last year we paid 30,000 dollars and this year we will pay 45,000 directly onto the
primary mortgage. Freedom Financial projected our payoff in seven years and we have
cut that down to thirty three months paying 120,000 in discretionary income with the
balance of our 145,300 mortgage being paid by reverse compounding interest.
One Caveat. There are two forms of this program. CMG and McQuarie offer
a HELOC in the first position requiring you to refinance your primary mortgage. This
is insane because it exposes your entire mortgage balance to a variable rate. We
got the second form which leaves your primary mortgage alone with a small HELOC
in a secondary position which minimizes your exposure to rising interest rates. There
is a big difference.
I AM talking about buying UFF’s MMA. Trust me, it’s the only way that I’m going to be able to pull this off.
So, once again, basically what I am asking is this:
Which will get me further ahead:
Continuing to do what I’m doing (scroll up if you have to).
or
Buying UFF’s MMA?
I have not purchased yet and my wife is utterly against it, though my brother is selling it.
I am not a genious, but consider myself rather intelligent, with some computer programming and math skills.
In Excel (well the open office version of it) I duplicated a lot of what the money merge account does.
The first thing that helped me to realize is that the math can work. That a process can be done that works better than just paying extra. It is NOT the same to just pay extra.
For example:
Here is what you can do, but it requires three accounts, not two:
100,000 home mortgage at 5.5%
0 balance HELOC (with 50,000 available) at 7% and no fee to transfer to checking (like mine is setup)
0 balance Credit Card (Important: Purchases must have no interest for first 30 days)
During the month if you make only $2000 (paid $1000 on the 1st and 15th of the month) and you spend $2000 dollars, so you have absolutely $0 dollars of discretionary income, here is what you can do.
$1000 payment to mortgage (don’t accept credit cards)
$200 to car (don’t accept credit card payments)
$100 to electric (don’t accept credit card payments)
$60 to Natural Gas (don’t accept credit card payments)
$100 to Car Insurance (don’t accept credit card paymets)
Everything else hopefully accepts credit card payments. This includes food and groceries and gas and the trip to gap or old navy.
So now there is $1460 that must come from the checking account on the day it is due.
That means since I always spend my full $2000 dollars a month, I have $540 dollars that I can spend on my credit card and this money will not collect interest for 30 days.
So lets say I pay an extra $1000 from my HELOC to the Mortgage. That is going to help me pay off the mortgage faster. Feel free to pull out an amortization calculator to see how paying $1000 dollars extra to a mortgage helps.
The interest I would have paid on that $1000 in one month (30 days) is $4.58 cents.
If I transfer the $540 from checking to HELOC, I now have $460 collecting interest of 7% which is $2.64.
I saved $1.94 cents. Not much, but that is something, not nothing. And over 30 years that will make a difference.
Sometime in the next month I have to pay off the $540 which I can do with next months income.
So then my total in the HELOC is $462.64.
Since I do not have any discretionary income, The next month, I can’t do the same thing. I do not have anything to transfer to the mortgage. I can however, put my money in the HELOC for as long as possible.
My mortagage is due on the 5th and is $1000. So from day 1 to day 4 of the month, the money from my paycheck sits in the HELOC. On day four it transfers to my checking account and on day 5 I pay my mortgage. So for 4 days I had a positive balance of $537.36 which will neither collect or cost interest until I put it in my checking account to pay the mortgage.
After paying the mortgage, my HELOC balance is back to $462.64.
I have no money for 10 more days until my next paycheck on the 15th. Remember I can use my credit card to meet daily needs and there is not interest for $30 days. But some of last months purchases are about to collect interest, so I have to pay them off. So I transfer half the $540 dollars I have to spend a month from the HELOC ($270) to my credit card which I also do on the 5th of the month.
Now my HELOC balance is $732.64 from day 5 to 30.
If my bills that come out of my checking account are due later in the month, I could transfer some of them later but lets just assume worst case, that they are all due on the 16th, my next pay day. (you can call any company and usually get your pay date changed to whatever day of the month you want. Yes you will have to make an effort to set up your pay dates to optimize the effectiveness of this system).
Over days 1-15 I spend another $270 on my credit card so its balance is back up to $540 but again, it is not collecting interest.
I get paid and $460 goes to bills and now I pay off my credit card completely $540 I have no money to put toward the HELOC.
So month 2, I have this balance in the HELOC.
$537.36 for days 1 to 4 = $0 interest
$732.64 for days 5 to 30 = $3.65.
So the $1000 dollars I transferred from my HELOC to my mortgage has now saved me $1.94 in month one and $0.93 in month two. (since I would have spent $4.58 each month for $9.18, I have saved $2.87 and according to the amoritization, I have shaved a couple months off my pay off date of my mortgage.
At the end of the year, I never made another payment, managed to, using three acounts, not two, save a few pennies in interest and shorten my mortgage.
So you see that since I had no discretionary income, I still can save money doing some type of Money merge account.
So that means that this NOT simply paying extra, it is doing more than paying extra, it really is canceling interest. Especially because in the above scenario, I cannot pay extra. However, it does require three accounts (an additional credit card with no interest for 30 days) not two otherwise I would pay more interest to the HELOC and I would lose money in this scenario.
Now, I have a couple of hundred dollars of extra income (money left over in my checking account each month). So if I added that into the mix, I combine both paying extra and interest cancellation. So I figured this out on my own. And I can continue to figure out the math on my own.
It took me many evenings after work over the past 9 months to figure all this out. In order to keep this up, I will have to spend many evenings for the next 10 years working this out each month and readjusting.
Am I willing to spend $3500 dollars so that I can have some software figure it out for me.
Is $3500 dollars worth the time it will save me over the next $30 years. Remember it is not just $3500, but over the life of a loan $3500 immediately transferred from my HELOC to my mortgage instead of to an MMA company would make a big dent on the mortgage.
If you are not smart at math, but willing to spend a small amount of time each month working with the software, I guess you should buy it.
If you are smart but have hardly any time to figure it out for yourself, I guess you should buy it.
If you are smart with math and have the time, then you can do it yourself.
Now I just have to determine if I am the second or the third option.
i see the agents are still pushing this *stuff*.
Bro, you have cracked HALF the nut on the MMA. yes, the method can save you a few bucks a month. however, you stated that these savings add up. well, yes they do, but not a month off your mortgage by saving $1.94 in your first month alone. My guess is you haven’t accounted for the additional time at the end to pay off the remaining HELOC balance. just do a simple amortization schedule and see how much adding $1.94 to your first payment saves. Even if you got a $1.94 each month extra EVERY month, you’d still only save about $2200 in dollars 30 years from now, and that’s ignoring the $3500 in additional debt (on todays dollars).
there is no magic bullet to paying off debt other than pay it off as fast as you can. lower your expenses, increase your income, increase your payments. MMA increases your payments, don’t believe the lies. Your ENTIRE paycheck goes to debt payment. You take out additional HELOC debt to payoff your mortgage, and then spend every spare dollar you have paying the HELOC down. Adding a middle man (the HELOC) to the process does not mean the extra payments aren’t there.
Joe, sorry for the delay on response, i was on vacation. The magnitude of your expenses versus my “examples” is actually irrelevant. If you have higher expenses, MMA and just standard prepay are equally effected, because they are really the same overall, just adding extra steps for little to no benefit with MMA (and a high price tag).
By all means, get an analysis done. Tell the agent you make $5000 a month and have $3000 a month in total expenses. Then compare to sending in $2000 a month extra to your mortgage. That will beat the analysis by about $3500. Then go back to the agent and tell him/her you left out $1000 in expenses (or something new came up), and repeat the process (comparing to sending in $1000 extra per month). The payoff time will change, but the relative payoff time with just sending in an extra monthly check won’t change, MMA will come in about $3500 behind.
Agents can come on here and scream at me until they are blue in the face that I don’t understand the system. Well, prove it. Take our challenge and use the $3500 MMA system to payoff a sample problem faster than doing it on your own. Oh wait, you can’t. Why? Because we both understand the system. Only difference is one of us is lying, and we all know it is the ones unwilling to take the simple challenge.
MMA = $3500 down the drain.
If you want to payoff your debt faster, minimize the interest rate and maximize the payments. Pretty straightforward.
I too were contacted my the UFF agents last week. After going through the whole sale pitch about how it’s better to leverage the banks’ money and not using my own and the $3500 is not really my money so the software is practically free…
I sounded really interesting specially after going through the example of how
I can save > $70K and pay off my mortgage is less than 12 years.
Then I start looking into the product they are selling and looking into the math and methods that they use to pay down my mortgage. The math is the same as if you make extra payments monthly.
They keep refering to the benefits of using the bank’s money instead of my own. I calculated it out and taken the money I saved in the interest off-sett by the interest I have to pay the bank for the HELOC, the difference is minimal. The agent ammitted that (after i pressed for the answer a few times) that i would need to put additional money in for the program to work. So the main idea behind this program is to pay down pricipal and thus shorten the mortgage payment time, nothing new there. I can calculate that with a simple spreadsheet that comes with excel ( look for mortgage under help and you will see all the mortgage template) A few changes to the template and got a pretty nifty mortgage calculation worksheet that will tell me exactly when i can pay off my mortgage given the extra amount I want to pay every month.
This may be a good budgeting tool but sure is not the breakthrought system that they are promising. MS money or WQuicken can do the same for about $80.
If you have $3500 that you want to spend, save that and pay toward the principal and you will save about a year off your morgage. BTW, the agent i spoke to claim that the program is approved and used by the Homeland Security and the NSA since it’s so powerful
wow MIT, Hardvard, NASA and now Homeland and NSA… anyone else ???
“BTW, the agent i spoke to claim that the program is approved and used by the Homeland Security and the NSA since it’s so powerful”
wow, that’s funny! who would claim a financial product is used to manage federal government stuff? Maybe that’s why they are 8 trillion in debt
Thought I should share this. This may sway a few people away…
So, I met with the agents for a second time last night.
I told them this: “Look, here is a method that I got from a guy that I know. How will MMA beat this?”
1. transfer all higher interest rate debt to HELOC.
2. deposit paycheck into HELOC, pay bills from HELOC.
3. when HELOC balance reaches zero, deposit paychecks into interest bearing checking account (or 0% if you can’t find one you like). pay bills from checking account.
4. send all extra money each month to mortgage as extra payment.
Their reply? “2 things that MMA gives you that that doesn’t:
1- MMA forces you to do the above (because most people aren’t disciplined enough, blah blah)
2- With your method, you never know how long until your mortgage is paid off. With MMA, you can see every single day how long until your mortgage is paid off (21.7 years, 16.4 years, etc).
My reply to that:
Reason one ~ Uh, I’m not paying $3500 for that.
Reason two ~ Frankly, I don’t care how long….and two…..I’m not paying $3500 for that. And I was thinking (but didn’t rebut): “Well, actually, I CAN find out how long until payoff…in about 5 minutes, actually.”
Thought you all should hear that. Straight from the horse’s mouth. MMA is a $3500 software that will do 2 things for you:
Force you to do what you can already do if you’re disciplined enough
and
Keep track of how long you have until payoff (which you could actually do yourself).
Now, if there is an agent here (or anyone for that matter) that can tell me something else MMA does that the system that I posted cannot…I’m all ears. I’ll admit that I may have missed something, or my agents may have left something out.
“With your method, you never know how long until your mortgage is paid off. With MMA, you can see every single day how long until your mortgage is paid off ”
That is the exact same thing the agent told me, he keep repeating the “40 pages algorithm” that the program has to come up with the solution, I showed him the Excel spreadsheet that does all the calculations down to the number of months untill paid off. He told me his program does better by showing the number of years and not just the 130 something months. I’m not paying $3500 for the conversion.
Then the agent went on to tell me how my math and methodogy is wrong. The MMA program is Harvard certified and has very complicated math behind it and that i won’t be able to understand. I told him that I’m pretty decent at math and that I’m in the financial industry, mortgage calculation is pretty straight forward. He kept telling that this is beyond my level of understanding and just trust him that the math is more advance than anything out there, the $3500 is very cheap for such an advance program. I guess I should ‘ve mention that I have a master in economics and was a controller in an investment banking firm.
When I told him that I don’t see the usefullness of the program for me and that I can do the same on my own. Suddenly his tone of voice changed, he stated throwing insults at me for being so dumb. “it’s people like you that making us so rich”… at this point I can see that that there’s no hope of having an intelligent conversation with this guy. He started saying something else but I hanged up.
Some one should tell him that insulting people is not a good way to sell anthing…
we can clearly see through basic math that the MMA concept is a ripoff. paying #3500 for something you can do yourself is absolutely insane. I like the earlier comment of going to excel and search under help for mortgage to give you a spreadsheet. i built my own to prove MMA doesn’t work.
The simple way to see that MMA doesn’t work is request $0 discretionary income. it won’t create an illustration because there’s no additional money to pay down the mortgage, let alone the $3500 you paid for the software/spreadsheet.
The real question is “WHY DO YOU WANT TO PAY DOWN YOUR MORTGAGE?” any money you pay towards your closed end mortgage is money you can’t get back. in a declining market (see S&P/Case-Schiller Home price index), is money you’re pissing away. building equity is NOT BUILDING WEALTH.
If I were to ask you to put your money into a vehicle that 1) earns no rate of return, 2) may lose value, and 3) is not easily accessible. How much would you want to put into this vehicle? you know the answer, it’s none, zippo, nada. but that’s exactly what happens when you pay your mortgage down. equity earns no rate of return as the value of your home is dependent on supply and demand. can you lose value? absolutely, home prices can decline and your equity can evaporate. is the money easily accessible? yes if you have a HELOC that the bank won’t close on you (see Wells Fargo, Countrywide and Citi). if you don’t have a HELOC, you have to either sell or refinance.
And lastly, the only way to get inflation to work for you is “borrow money from the past”. do you know any homeowners in your neighborhood who bought their home 30 yrs ago? what did the pay for their house? i bet it was MUCH CHEAPER than the cost of a similar home today. much of that increase in value was due to inflation. inflation actually destroys the value of the mortgage and transfers wealth from the bank to you. if your neighbor bought that home for $25,000 and it’s worth $225,000 after 30 years, think if he NEVER paid off that loan and still owed $25,000 (while paying $45k over 30yrs at 6%..tax preferred by the way). shoots, i can’t even buy a decent car for that much nowadays and if i wanted to, i’d just cut a check in today’s dollars for the $25k loan.
I have a $615,000 mortgage (Honolulu median price home is about $625k - and my LTV is 56%), if inflation is 3%, in 30yrs, that $615,000 will be the same as $261,000 in today’s dollars. all of that wealth was transferred to me FROM the bank, because the bank was not able to change the terms of the note and adjust for inflation. i have no reason to payoff my loan and opt to invest my money outside my home.
if i throw in an average appreciation rate of 3% over the next 30 yrs, the value of my home will be almost $2.6m. if i never pay off my mortgage I’ll have $2m in future dollars. why would i want to pay down my mortgage? inflation destroys the value to the tune of $18,000 per year and i get tax benefits on the interest.
As Calvin says: “it’s just math”. To not believe inflation destroys the value of your mortgage, you would have to believe inflation does not exist and ignore the fact that 1 1=2.
Rather than arguing which system, MMA or extra month payment, is better, you should be asking yourself: “WHY DO I WANT TO PAY OFF MY MORTGAGE?” - grow your wealth OUTSIDE of the home. paying down your mortgage is taking money from one pocket and putting it into another pocket, it doesn’t create wealth.
be smart about money and how money works, those who don’t will soon be separated (and paying down your mortgage transfer wealth from you to the bank…. that looks like separation in my book).
Dakine
On a Rock in the Middle of the Sea
While Dakine makes some very valid points, I would not say blanketly the decision is that black and white and one should not pay ahead on their mortgage. Keeping a mortgage has a cost, namely the interest. Investing your money elsewhere has a reward, namely the return. Predicting the cost is very straight forward. Predicting the return is not whatsoever for items that can outperform the cost (stocks, real estate, etc). Also, some people are very risk adverse. They don’t want to invest in anything with risk. It’s a personal choice that everyone should evaluate accoridng to their own comfort level. But the answer will not be the same for everyone. Whether the MMA offers and financial reward, that is the same for everyone (ie, no financial reward)
Okay. Need to throw my 2 cents in (no pun intended.) I was a skeptic about a year and half ago. I got a call from an agent. I was told “how would you like to pay off your mortgage in approximately 1/3 the time, not change your spending habits; see a running window of estimated mortgage payoff, etc. Well, to all those skeptics out there, I’d like to leave this analogy: Why pay a qualified mechanic to change my brake linings when all I have to do is go to an auto parts store and buy whatever tools they suggest, buy a manual, and do it myself. Why? Because I’m a moron when it comes to messing around with something as crucial as brakes and not to mention what would happen if I forgot to put in a little pin and find out on a highway that my brakes were done wrong. Where am I going with this? Some things are not in my calling. And finances is one of them. The MMA has not only disciplined me to put in certain amounts in my first mortgage,it also set up a running page of expenses that is managed solely by us. It keeps my family and me striving to maintain a monthly budget amount similar to having a financial planner telling us to do the same, except it’s all paid for by being rolled in to the HELOC account. If we do a good job of budgeting, in several months the prompt will come up for an extra payment to send to our first morgage. Yeah, I guess I could say, well, I could do this myself, the only thing is I WON’T. Plus the MMA doesn’t touch my money. So all I can say is for those of you on the fence, don’t let the negative “scam” emails equate this with Amway or pyramid schemes or whatever. No one is making you do it and no one is persuading you to get 20 of your friends together for a luncheon to get them to sell it. I am happy with it so far.
Well I am throwing in my two cents.
I am an agent for U1stFinancial and I believe in the product and the concept. I will state the following though
MMA works
Sydney Financial works
Speed Equity works
CMG Macquire works
Citi’s product work
Calvin’s do it yourself approach works
Freedom Financial works
Carl Gil’s book and what he explains works
All these ways cost time and money at varying levels. I did alot of research and fact finding and blog reading in regards to all of these systems and then made my decision. Everybody on here has an agenda. Let’s be frank If you are selling or using a particular product you are going to be defensive or pumping yours. Sorry just the facts. The argument that all these systems are scams and are a waste of money in my opinion is false.
Nutrisystem
Weightwatchers
Jenny Craig ect….
Are these all a waste of money. I mean you can lose weight all your own can’t you! My point is this these systems are a plan of action, a goal, an education and at least with U1stFinancial they give you a money back guarantee. Customers and people that enroll in any of these systems want to make a better lives for themselves and typically don’t have the financial(mathematical skills) or feel that there time is better served somewhere else than figuring this all out. My experience has been capturing peoples time and getting people to slow down to look at their finances is the biggest challenge. People don’t know where their money goes and over 15 to 30 years they waste alot more thant any of these system cost just not paying attention. I also know most people don’t live by a spreadsheet. Life happens and things change. I’d like to state a few things about my thoughts about U1st and I’m done.
Calvin just so you know. No one makes any money on sigining up agents. You only get paid when you sell something. Bottom line. This isn’t an MLM. You get a commissioned override if someone in your agency sells something. And let me ask you this in this current economy and in life today where can you start up a homebased business for 175.00 get a website get all the training you want and do it from your house. Gas isn’t cheap is it.
U1stFinancial as a company. They pay well treat you well and who wouldn’t want to be involved with a company that does what they do. It’s a servie, it’s not just software. If you don’t stay up with your software they call you. If you screw it up they help you fix it. If something changes in your finances and you don’t know how to edit your software you call them. In setting it up they walk you through it. If you come into money and have questions on how to put it in the program they coach you. The product is geared towards equity acceleration and being debt free and owning ones home. Those are good principles. Also the company and product you see today won’t be the same in the future. They just don’t take your money and rest on the product offering they have today. Shortly it will be changing for all to be able to do be on the program to pay down debt be on a budget and and wealth building!!! Would you like your finances to be on Auotpilot with your cash flow being utilized to the maximum. With 40,000 customers currently and 1 singnng up every 14 minutes the company is here to stay. Check out the BBB for Utah. They have geat record. Why are banks courting our business. Because our customers don’t default and they are customers that pay ontime. Okay people take your shots at me.
John K.
www.u1stfinancial.net/johnkempton
2 important things:
1. Because you pay your regular mortgage payments for the years you are paying on your loans, you still take advantage of the full tax write offs (so your CPA should be okay with this). And once you’re loans are paid (say in 10 years) what will you do with 20 years without a rent or mortgage payment? Most people can buy more homes (what real estate agent or loan officer mortgage broker doesn’t what you to buy more homes?) or invest your money and return a healthy retirement (what investor will refuse your money?)
2. You obviously want to owe less than your house is worth at any time. Because your are paying off your loans so quickly using a one account you could be out-pacing depreciation in the housing market. Most people do not have the extra money monthly to apply to principle, and those that do often don’t send it to their mortgage, because they can’t get it back if something comes up.
I think the Merged Accounts and the Money Merge Account(tm) system are a benefit for multiple reasons and many different people.
In fact, check out the May/June publication of Personal Real Estate Investor Magazine. There is an article called Ancient Wisdom Fits Current Economics which reviews the background of one accounts and judging by the title might be helpful at this time, when we are all looking for a way to get right side up on our homes, and save money, so that we can actually retire wealthy.
…I haven’t seen anyone mention the fact that merged accounts (AKA a One Account) and the Money Merge Account(tm) system are different things. While a merged account is of course merging all of your checking, savings, mortgage, and other debts into one account and using it for checking purposes the Money Merge Account(tm) system and it’s agents freely share the benefit of consolidating your debts and income and then offer a financial tool called the Money Merge Account(tm) system that consist of a personalized web based software (similar to how you log into your bank account online) to track your account balances, interest savings, daily, monthly, quarterly, or annual audits, and run financial models for you. For those that have a tough time with managing finances and recalling payment dates you could log in daily to your online account and see a reminder. Or if you are pretty good with paying your regular bills you might want to log in once a month, just to balance the previous month’s preprogrammed income/expenses. When logged in, amongst other features, you can see exactly how long it will be before you pay off all of your debts. As your income and expenses change over the next 5-20 years or however long you use the online software (with no additional expenses, might I add) your date to pay off your debts will change. This date moves in real time. The Money Merge Account(tm) system comes with free upgrades, coaching and customer service for however long you using the program (again, with no charges). I think it is safe to conclude the Money Merge Account(tm) system runs complicated math based current financial habits to report your future financial state. Many of us do not have the initiative, math skills, or time to manage a one account.
When I think of a One Account I wonder why anyone would think it is a bad idea…
In the U.S. this is how you set it up
Do you know what a line of credit is?
You know either a credit card, or maybe a home equity line of credit, or business, or personal line of credit? The one that comes with free checks and almost any bank will give you one? Usually there are no monthly services charges, free checks, and most lines of credit or credit cards offer an ATM/Check card? They want you to use the money, right? I think many of us already have one. If you do, you don’t need to open any new accounts.
Let me tell you, if you have or obtain a credit card or line of credit tomorrow from your local bank, say for $50,000 and you paid off for example your car loan and student loans with it (or credit cards) your 1 line of credit payment would be lower than the minimum payments on your 2 or 3 other loans. Most of us know this.
If you decided to online transfer or write a check to your line of credit, repositioning your regular income and then use the line of credit ATM/Debit card or checks for the remainder of the month to pay your normal bills, do you know what a HUGE impact this simple banking strategy would have?
1. Your daily period balance on the line of credit would be lower saving you interest.
I.e. $50,000 balance, deposit 2k income, you now pay interest on $48,000 waiting for your normal bills to clear. By the end of the month you might have spent all of the money you deposited but if you had any extra money you’ll end with a lesser balance on the line of credit. I.e. if you had $500 extra that month your ending balance would be $49,500 and because your next months payment is based on your ending balance you’ll have a lower finance charge and save interest this way.
Really, you’ve just repositioned your existing income so it works harder for you. Isn’t that what we ask? How can our money work harder? Well this is how.
And I believe the secondary market is also rewarded for this banking behavior. Image, you would normally pay a finance charge to your line of credit or credit card, but now instead of giving them a $200 payment, you give them $2000 income. Great. You’re never late on that account. They love you. And because with the Money Merge Account(tm) system you sometimes pay more to your primary mortgage (it’s not your money, it’s leveraged money from the line of credit) your primary mortgage provider receives extra principle once in a while and is happy as well. You save HUGE amounts of interest on your primary mortgage due to the way they are set up (i.e. only $300 of your $2300 goes to principle) and because of the loan amount on the 1st mortgage vs. the small loan amount of leveraged money on your line of credit. It’s complicated at this point, and this is why it is a system with a tool to do the leg work for you. You’re only responsible to take charge, and start using your own money to your advantage, depositing or transferring to where it will do more.
With all parties moving forward this could have a very positive impact on homeowners and the economy, with regard to the mortgage and housing markets.
Of course banking this way, your extra income each month sits on your line of credit or credit card keeping the principle balance lower saving you interest, but something the author above forget to mention is that you can access that money at any time. You’re not allocated money to bills and all the rest goes to your mortgage, as if you can’t get it back. You’re just banking smarter and allowing the money to do the rest.
The Money Merge Account(tm) system and its agents can offer a helping hand to get your One Account situated, if you have a line of credit or credit card this will cost you nothing. If you need a line of credit an agent can usually help you get one for free. Of course if you want the online software/system it’s great for both savvy and not so savvy individuals. Just be sure you have positive income.
Using the software you will usually save$50,000 or more, ON EACH MORTGAGE you use it on. That’s right, the author didn’t mention you can use this banking method on multiple homes, why wouldn’t you? And the Money Merge Account(tm) system can be reformatted for those new mortgages in years to come. There is a $100 fee to reprogram the numbers but really,
Would you trade a 1 time fee $3,500 or even $4,000 to guarantee a savings of $50,000?
Dang, I would.
I know I pay my financial advisor more that that and he doesn’t guarantee anything.
Feel free to email me if I can help
kyrsten5@yahoo.com
John K, it’s not “my method.” It’s just simple prepayments. Those have been around since the dawn of lending (think centuries). But I agree, all those methods work, and all take varying time and money. Prepayments take the least money since they are free. They also take the least amount of time versus all those other methods too. Kind of a no-brainer…..
Kenny, making prepayments is not analogous to changing your brake pads. There are tools needed to change your break pads, and a little know-how. Writing a simple check (prepayment) takes no more effort than people are already doing in paying their mortgage. As for not changing your spending habits, well, sorry, no dice there. Spending every spare penny you have on your mortgage is changing your spending habits. For 1/3rd the payoff time, you need to nearly triple your payments, whether they are made through a HELOC or straight to the mortgage (since they are the same). But nice try at lying…..
BTW, John K, if the “cash flow is being utilized to the maximum”, that would require an optimal approach. UFF’s MMA is faqr from the optimal MMA. And the MMA isn’t even the optimal approach. That’s why agents should be required to have actual an financial background, so they might be able to understand that.
Sorry, MMA is, and always will be a complete waste of money. Added risk and less reward for an obscene price tag. Can’t get much worse than that.
Calvin, how much money did you make last year? HOw much did you put toward extra principle payments on your first mortgage? And how much interest did that save you on the back end of your loan?
My grandmother is using the Money Merge Account(tm) system. She already had an existing business line of credit and just began dumping her income into it. Before she got started she paid off 2 credit cards with the business line leaving a balance of 10k. Through using the line of credit as her checking account with her extra $200 income (now $400 because of her $200 payment savings for consolidating) she’ll inadvertently pay off the 10k in 16 more months. Usually she’d spend her extra $200 seeing as it isn’t much. However, with the Money Merge Account(tm) system she sees a tangible date on her credit cards to be paid. 1.5 years to pay them off vs. 5 years, or more.
And once in a while when the MMA software prompts her she pays a little extra from her line of credit checking account towards her primary mortgage. Without the Money Merge Account system she’d never have saved $200 monthly or given up her only $200 extra dollars per month to her mortgage.
Using a One Account and the money merge account software will allow my 65 year old Grandmother to pay off her 25 year mortgage in 6.3 years. That is pretty powerful, no matter who you are and what you know.
I put none of my money towards my mortgage, because I didn’t have one. I paid it off by doing what UFF system has you do….apply all your discretionary income to your mortgage. I just didn’t use my HELOC as a go between.
as for this that you said:
“Most people do not have the extra money monthly to apply to principle, and those that do often don’t send it to their mortgage, because they can’t get it back if something comes up.
I think the Merged Accounts and the Money Merge Account(tm) system are a benefit for multiple reasons and many different people.”
Well, if people don’t have discretionary income, MMA won’t work for them since they can’t afford to make extra payment, much less then $3500 and ~$20 in added interest per month it brings. And people who do have DI and send it as a prepayment absolutely can get it back if something comes up, the EXACT same way the UFF approach does, USING A HELOC.
You might want to try to understand products you push. You say people can’t touch money sent to a mortgage then push a product that relies on getting that money back. how many times are you going to tell the same obvious lie in the same thread before you get a clue that people are on to your lies?
One account and MMA a basically the same thing. MMA software just replicates the one account in software, making you do all the work. But someone could easily outperform both methods on their own using the tools they already have with less effort and less risk.
To John K and Miracle,
There’s no argument as to whether MMA works or not. Making your money work harder for you 24/7/365 is what we should all do. The issue I have, and if I could speak for Calvin, is that Ufirst and other models that charge for this service is preying on the financially illiterate and creating more indebtedness by charging $3,500. If you truly had your friend/family/client’s best interest in mind, you would show them how to do it for free at no cost. This would in turn accelerate their prepayment and not line your pocket with the $900-$1400.
Miracle, “guaranteed” savings of $50,000. I call bull@#$%. if the person does not continue the prepayment of the mortgage (or HELOC in the case of MMA), they will not reduce the interest paid. Plug in $0 in discretionary income into the MMA model. it won’t create an output BECAUSE THERE’S NO MONEY TO PREPAY THE LOAN.
As a 17 yr mortgage veteran, I’m appalled at the sellers of this program that don’t understand the math behind it. I’ve created a spreadsheet that breaks down all the details of the MMA concept that I happily share with my clients. Before doing that though, I ask them what their real goals are.
BECAUSE PAYING DOWN YOUR MORTGAGE DOES NOT CREATE WEALTH! it only transfers wealth from one pocket to another.
Equity in your home is: 1) not safe and secure (house can lose value), 2) it earns no rate of return (house value goes up or down depending on supply and demand), and 3) it’s not liquid (must refi, sell or utilize a HELOC if you can get one).
Paying down your mortgage and putting your money into a vehicle that has these qualities is the RISKIEST strategy you can deploy!
Wealth outside the home grows with compound interest while a mortgage is a simple interest loan that does NOT compound. Again, do the math, it doesn’t lie.
Understand your product…. and when you realize what it is and how it works, show your friends/family/clients how to implement it for free. You’ll sleep better at night.
I am a very happy customer of United First Financial–The money merge account is showing us how we can shave 15.2 years off of our house payments…..plus get out from under some credit card debt at the same time……I am a customer and an agent. There is an old adage which applies here to some of the post here called
“contempt prior to investigation..”
This is NOT a scam and until you get your FREE analysis to see how your numbers will work out you have nothing worth while to say.
Did I tell you that using our service, IF YOU qualify you will find
NO Refinancing of Primary Mortgage
NO Increase in Monthly Mortgage Payment
Little or NO Change in Your Monthly Budget
More information and a FREE analysis to see if you qualify
email me at freedom@oneup2you.com
HI Dakine: Need to talk to other bankers who are excited about this service
And the $3500 does not come out of you pocket but out of the line of credit and it is paid back in from 2 to 4 months in many cases….
Do you work for free by the way? I would rather pay $3500 to working down our debt than to pay closing costs on a refi–that puts me back in the hole again… WE are not fighting bankers–we work with open minded ones who have the vision…. Most of the agents that represent the service come from financial services, banking and real estate and the SEE the value of the service
Mike,
Straight up, does the UFF’s software, with it’s $3500 price tag ever have a chance at outperforming someone sending their discretionary income to the bank as prepayments?
Absolutely not.
Straight up, isn’t it misleading to say “NO Increase in Monthly Mortgage Payment” since every single penny you make is being sent to the mortgage via the HELOC?
Absolutely misleading.
Why can’t you guys market this product without lying about it’s effectiveness or what’s involved? (I already know the answer to this: You wouldn’t sell much at all!)
Quit lying. It works, but not as well as what any borrower can already do if they want to.
Calvin
Calvin,
I have been researching all this to decide what would be the best mortgage
reduction plan for me. While reading all this information something occurred
to me . Calvin, you don’t have a mortgage? You must be completely bored with nothing much better to do.
Get a life!
Bill
Mike,
Bankers are ONLY excited about the service because it lines their pocket with $3500 (or in the case of the agent $900-$1400 with your upline getting the remainder).
i can show you how to payoff your mortgage with prepayments on spreadsheet…. for free, why do you need to spend $3500??
As for “no out of pocket expenses”. Brah, you gotta quit drinking the company cool aid. If you pay it out of your pocket or from a HELOC, you are STILL paying for it, only now it’s being financed! (which, with simple math, you would discover that you are only INCREASING the cost of the scam).
Do I work for free? absolutely not. But I make my living by helping people better their future with sound business principals that allow me to sleep at night. I don’t mislead clients into something that they are not financially capable of or have them spend $3500 on spreadsheets that provide no value add.
All I would really hope for is that through this dialog, that sellers of this product 1) become financially educated in understanding how an amortization schedule works with prepayments, 2) tell the truth.
Calvin, best of luck in making the world a better place without the fee associated with this product. I currently provide workshops that show people how to pay their mortgage off faster when appropriate (which is NOT very often), and of course, I do not charge anything for this service.
John K, Miracle, Mike et al, Hope you see the light. stop drinking the kool aid, dig down in the details of the math and tell the truth. Be an asset to your community.
Dakine
Calvin is on a mission as an educator and I agree with him.
Every high school kid in the country should know the
ins and outs of this concept. But they don’t. Why is that?
Perhaps it would be bad for business if it were common knowledge. Not that it is hidden, just hidden in plain sight.
If they did, there would be no need for expensive debt reduction programs and quite a few more of us would be mortgage free.
All I know is, the HELOC shuffle is working for me. I paid
too much to learn how to do it, and I will teach anyone
who cares how to do it for free.
Dakine, you and I live in different paradigms. I trust that
your strategy takes into account the precarious global
economy. With food riots and 200 dollar a barrel oil looming
on the horizon real wealth is the roof over your head, the tools in your hand, and the food in your belly. Not the imaginary digidollars assigned to them. From where I stand
you will see the day that a loaf of bread will dictate the
price of gold. I refer you to “The Alpha Strategy”
www.biorationalinstitute.com/zcontent/alpha_strategy.pdf
Trust me when I say I would like nothing more than for you
to be right and for me to be wrong. If you are right then
folks will poke fun at me. I will have food to eat, a place
to live and no harm done. If I am right, good luck living
in your worthless securities. Perhaps you can eat the paper
they are printed on.
I have a question about the monthly interest that user has to pay to United First Financial. In the Example vedio, it mentions that the couple “only have to pay interest on daily balence” to MMA. Is that true? Based on the Example, the monthly balence will always be about $10,000 ~ 11,000. Do the users “only have to pay the interest on daily balence? When the users have to pay off the balence (on MMA, not the morgage)
The interest you pay for the MMA is the HELOC interest. It is based on the average daily balance, but, conveniently, the UFF shows the **final** balance as what the interest is calculated on, which is incorrect (or just a plain lie, depending on what you believe their intent is).
If you keep a balance of $7000 for half the month and $12,000 for the rest of the month, the interest is based on $9500. Ideally, the average daily balance should be a very small number, but their algorithm is very inefficient at it ends up being a much higher balance.
The MMA is bad news. Lots of mistakes, inefficiencies, and most of all, an expensive price tag, all for something you could easily do better on your own.
Call a spade a spade. Is a Multi-level Marketing scheme cost effective? When there’s a huge price to pay? When the price is $3,500? I smell a rat.
Please let the readers reference an article from a reputable magazine to understand the nature of the beast, rather than read 50 responses from salespeople who benefit from the sale of the product (i.e., “biased”).
http://www.kiplinger.com/magazine/archives/2008/05/prepay_mortgage.html
Let me get the metaphor out of the way first. After a wave crashes on the shore, it smoothes out and gently fades back to the ocean, never again to be seen.
With that said, I need to get something straight. Let’s go beyond the one-time, up-front $3,500 fee, which like the wave is gone in the shuffle. I didn’t feel it out of my pocket but I can’t deny I paid it. Now, are the skeptics against UFF saying that the number of years left to pay off my mortgage (i.e., 10.75 down from 28 years left) is false or “lies”? Is that what this is about or is the basic argument that I could have done this on my own without paying $3500? (which by the way, I couldn’t) I personally agree that if it doesn’t work for you, then fuhgeddabutit, but if someone can be assisted by it, then it should not be an opportunity missed. BTW, I’m speaking as a customer and not an agent.
Kenny,
No one is saying it doesn’t work. It works. That’s not the lie. The lie is that you can’t do this on your own with no help from others. The lie is that the math is incredibly complex. The lie is that the savings comes from anything other than your money going towards your mortgage. The lie is that the HELOC shuffle game creates any measurable savings versus the extra money you are paying each month towards your mortgage. The lie is that the UFF product will pay off your mortgage faster than just paying ahead on your own.
Calvin,
This is in direct response to most of the 89 pages that I have read…I have a finance degree and have a mortgage and realize that I have always been able to send extra payments to my mortgage to elimaninate interest. How can your respond to folks that have a mortgage and you don’t even have a mortage and or on the same level. I am not an agent and I am thankful that some one had introduced me to a finacial GPS dash board that will show me the month and year that I will be debt free. Wow does this have a effect on how I spend my money! Read the articl in the wall street journal and Bouler Camera dated may 18th 2008. Every one knows that if you turn your lights off that you will save money……….right. Instant feed back effects results. Imagine driving to a destination you have never been to and you can either take a make or a GPS system. What would you pick a 39 cent map or a 299 gps system. That will anwer all my qustions to your IQ. Anwser it and I wish we could meet in person for you to look me in the eye to answer it!!!!
Calvin,
What is your deal. Do you not have anything else to do? I am not an agent and own the product. I can’t tell you how thank full that I own the product! 29 years to 11.2 years. If I want to spend more or less money the 11.2 adjust. That is why this is better than the CMG program. You acutually see the effect of how you spend your money.
Bill
Where did my post go?
I will be happy to take anyone’s personal challenge…….I have been an agent now since April of 07 and never once pressured anyone to purchase the software. The best comparisson that I can use and it’s been used before…If you have GPS system vs a Map which would you rather have? The will both get you to your desination, but which one will get you there faster and more efficiently? A Financial Dash board at your finger tips. Instant feedback effects mosts behavior. I will also demonstrate how the software works with your actuall numbers after version 4 is luanched on June 27th. The convervative analysis is stagnet and doesn’t take into consideration the interest cancellation and money float!
To all the negative bloggers that have not personally expeirenced the software…I challenge you to go to my site. I don’t have time to read 90 plus pages of negative blogs from people that don’t understand how the product truly works. But, I will respond to those that take my challenge!
I do have a finance degree so don’t discredit me on numbers……..
Vince Mirabella
www.payoffearly.info
Vince and others (or just one if you are all the same shill),
Map versus GPS. In a car, I’ll take a good GPS. In this comparison, I’ll take the map. And here’s why:
Assume I’m @ 100 Main St and I want to go to 2000 Main St. My map says go down main street. Your GPS says “Go one block on main street, turn left on 2nd Ave. Go one block. Turn around. Go one block. Turn left on Main st. Go one block. Turn left on 3rd st. go one block. turn around……. etc, etc”.
Your GPS has you doing all sorts of unecessary turns that only slow you down. not much, but they slow you down over just prepaying on your own. And of course, that GPS is $3500 versus the free map that gets you there quicker.
We’ve shown numerous times that your GPS can’t get someone there quicker even in the easiest of examples. That’s sad.
Someone with a finance degree should be able to EASILY do the math that shows paying $3500 for the ability to prepay your mortgage is NEVER a smart idea, since you can already prepay your mortgage without any fees whatsoever (unless your specific mortgage has a prepayment fee in the contract, which MMA would incur the same fees).
Will you guys ever learn?
hey Calvin,
Why don’t you prove your statement:
“The lie is that the HELOC shuffle game creates any measurable savings versus the extra money you are paying each month towards your mortgage.”
I want to see those numbers.
Want numbers? No problem.
Here is a UFF analysis of a particular set of income/expenses/mortgage/bank account:
http://www.mediafire.com/?2txrxjvyl5d
Now here is the exact same set of income/expenses/mortgage/bank account with simply applying the discretionary income as a prepayment each month:
http://spreadsheets.google.com/pub?key=pLyZ8931b6TrMehweOHI2Mg
Notice the prepayment approach pays off sooner, about $3500 plus interest sooner. Still think the UFF crap ware is doing anything wirthwhile?
Now agents will say the analysis is different than the real software. They will claim the analysis is 20% conservative, which is incorrect. Only changes in income and expenses will alter the payout date, and anything that helps the MMA helps the simple prepayer, and helps him more since he doesn’t have the $3500 overhead. And this doesn’t compare to a prepayer using an interest bearing checking account. That makes it even worse for the UFF’s brainwashed sales force.
The math behind this stuff is PAINFULLY simple. And the UFF’s software is WILDLY innefficient at the MMA. Optimal HELOC transfers can be calculated with simple addition and subtraction of readily availalbe information (income minus expenses), but for some reason, the UFF uses non-optimal transfers. So users are chosing a non-optimal implementation of a non-optimal method.
More cost. More risk. Less reward. UFF = junk. but more accurately….
UFF = cult
Have a nice day
Just so that everyone understands it is each persons own choice to use or not use the Money Merge Account Program.
In my oppion if a person feels the program is worth it for their own personal situation, than it really doesn’t matter what Calvin or any one else thinks about the program.
It’s just like a maid you can do the same job your self, but if you in your situation feel you would rather pay a fee to make life alittle simpler for yourself than thats what you should do.
In some peoples situation they feel the program is worth the amount they will save in interest with out the head ach of trying to figure out the information on their own.
I personally think It would be worth the investment because the contract tells you if you do not save the amount that it shows, you can get a full refund of the $3500.00 back.
To me that sounds fair enough if I were to purchase the program. It is basically telling you if this doesn’t work then you get your money back.
“I personally think It would be worth the investment because the contract tells you if you do not save the amount that it shows, you can get a full refund of the $3500.00 back.”
You might want to look at the refund again, because it doesn’t say that. It says that if the information you provide in the analysis is true and doesn’t change, and the prediction doesn’t hold, then you get your money back. But since all they are doing is guaranteeing a basic amortization schedule with full prepayments, they are only guaranteeing simple math, meaning you can’t get your money back unless you can show 1 1 no longer = 2. Not gonna happen.
As for the maid analogy, UFF is like hiring a maid to come in and sit on their butt while they tell you how to clean your own house (and tell you how to do it worse). One has to do MORE work than simple prepayments, you incur more risk than prepayments, and you spend more/save less than prepayments.
Please provide accurate information. Funny how UFF supporters never seem to want to do that.
Hello,
What does MMA actually mean? When I look at the software that uFirst sells, I don’t see where the term MMA comes from. You have 4 things to manage, a 1st mortgage, a 2nd Mortgage HELOC, a checking account, and the software program. Where does the money actually merge?
I propose a true MMA called the Home Ownership Accelerator Loan (HOA). This is a loan that literally combines you checking account with mortgage, and no expensive software is required. The mathematics of the uFirst software is truthful, but the problem is that only 30% of all people who purchase the software are still using after 90 days. With the HOA loan, the mortgage acceleration process is fully automated, no maintenance whatsoever.
The HOA is a loan product that actually gives you something for your money such a 30 year withdrawal period, low interest rates, interest rate protection, and a fully functional checking account with unlimited checking, Visa/ATM card, and direct deposit. Simply put, it combines you checking account with you mortgage account drastically lowering your principle and saves thousands in interest, thus the 7-11 year payoff. Of course, results will vary.
The biggest key in accelerating your payoff whether it’s the software or HOA loan is cash flow. If you spend what you make, you will not benefit much, if at all from any mortgage acceleration/get out of debt program.
A big part of the acceleration process is how much extra money you are able to payoff debt every month. I can understand why people would be hesitant in sending extra payments to their 1st mortgage since it is a closed end instrument and you can’t get that money back, unless you refinance.
But with the HOA loan you can confidently put all your savings and income into because you still have 24/7 access to your money. You can safely dump all you money into the HOA loan and not be worried about getting you’re money back when you need it. You can overpay the loan by $30k and still have access to your cash the following day. This is what sets the HOA loan apart from the software.
I know for a fact that the mathematics for the HOA loan works because I made a day-to-day scenario for a typical family for a three year period and I saw the acceleration process first hand. I’m sure the software works too but how long will people actually use the software. Statistics show that people sometimes do not maintain the required maintenance required for the software as it becomes tedious. The HOA Loan however does all the work you, effortlessly, and until the job is done. More info on my website www.coloradonationallendingsolution.net
I love how everyone and their brother is now selling a product that is some sort of method of using a home equity based loan to “accelerate” the mortgage.
the ONLY thing that accelerates your mortgage is your money. send more of it, the loan gets paid faster. you can already do this for free.
but nobody likes free. at least no one that is trying to make a living off you with nothing to offer. so they dress up your prepayments. they put them in a HELOC. or an “HOA” (BTW, nice choice guys, it’s not like “HOA” is associated with anything else in the real estate market, like maybe a Home Owners Association…DUH!) or HEAP or speed equity. They are all the same in practice, each with their little niche, but none of them EVER recouping their costs when compared to just prepaying on their own.
It’s like these people never figured out that ANY home owner can apply for a HELOC to access any equity in their home. Sure some can’t qualify, but then again, those same people can’t qualify for their program either since they require the loan.
Take control of your own finances and learn something. Paying hundreds or thousands of dollars for programs like these is just another financially bad decision. Who pays for what they already have?
Calvin, you are on point. Thank you for taking the time to education people on MMAs. There should be more people like you.
I told an UFF agent I can do the same thing by sending in extra payments each month or whenever and not be out of a dime. The UFF agent said people like me, I was a loan officer at the time, are the hardest to convince their program work.
Ah calvin, you are such a skeptic. I will never try to justify $3500. But I will show that using a HELOC based system can be more cost effective the just making extra payments. For the record, I didn’t believe it was possible to do better then extra payments either until I did a little computing. (And I’ve been doing the HELOC shuffle for a while now.) The results of my analysis is found here: http://www.mydebteliminationcalculator.com/gpage16.html.
For full disclosure, I am not peddling a loan acceleration program, but I am peddling a piece of software to simulate the process and generate estimated results from the use of a HELOC based loan acceleration system.
Greg,
First, I have never said “this doesn’t work.” It can save money, **if free and compared to prepayments out of a 0% checking account.** As I have stated to you on other sites, you need to account for an average interest rate checking account. MMA salesman (which you are one, not just for the UFF) never see the full financial picture. In this method, the user HAS to send their $$$ to their HELOC as soon as they get it. There is a cost to this outside of the cost of the program. They give up the opportunity to earn interest on their money (which is why the cost is referred to as an “opportunity cost”). Go back and refigure your results with a basic 3% checking account. They are certainly out there. Mine pays 5%, and I’ve had a 6% checking account as well. You said on another site, you weren’t sure of the tax implications. Well, we are. Just do the math. If the tax rate is 25% and the checking interest rate is 5%, your effective rate is 3.5%. If your tax rate is 25% and your loan rate is 5%, your effective rate is 3.5% (BTW, that should be a hint to you right there).
Also, look at your example. You have people in beginning and middle of the month, and owing their mortgage at the end. That pretty much opposite of the real world. Pay is middle and end and mortgage is at the beginning. Would that make a difference since you would be borrowing to pay the mortgage, then paying against that loan in the middle of the month (think many days HELOC interest).
Plus, you didn’t account for the cost of the software up front, though yours is cheap enough it doesn’t destroy any hope of real savings (kudos to you). Also, you should discuss some of the risks to this approach (HELOC freezing, slower reaction time to lost discretionary income, etc).
My hat is off to you for being far more honest about the approach, and taking the effort to understand the math. You would do your business venture a great service by redoing the calcs with your software cost included, and then showing the same results with the cost being $3500. The savings/cost analysis would be night and day. While your software appears to have the ability to provide a better result than the UFF’s since it takes a more optimal money transfer approach, the real problem with the UFF is the price (well, and the deceitful marketing).
But in the end, we can still beat it. Without added cost, without added risk, without added effort. But at this cost, the “behavioral tool” argument holds a lot more water.
Sincerely,
Calvin
Despite Greg’s 07/13/08 statement “For full disclosure, I am not peddling a loan acceleration program, but I am peddling a piece of software to simulate the process and generate estimated results from the use of a HELOC based loan acceleration system”, his software does accelerate loan payment (otherwise what good is it for?) and it’ll cost you $30 for an activation fee, and he has stated on a different blog that he is selling a HELOC-based mortgage payment method, so “I am not peddling a loan acceleration program” is disingenuous.
I’ve compared Greg’s examples on his web site against the traditional method of paying something extra to principal. To make the comparison fair, terms are kept the same — same mortgage, same term, which method costs less in interest? The traditional method wins both times. The 6-figure total interest amounts are Greg’s and I’ve subtracted HELOC interest for the months the HELOC was kept open for non-mortgage expenses after the mortgage was paid off. For total costs, the $30 fee should be included as well.
Table 1 Traditional extra=$50.95/month
file+++++++ / months / Total Interest
100kheloc / 290 / $107,477.34-$0.27
traditional / 290 / $107,411.73 is the winner
Table 2 Traditional extra=$55.91/month
file+++++++++ / months / Total Interest
100khelocat10 / 285 / $105,305.16-$7.05
traditional / 285 / $105,161.05 is the winner
Greg does show the interest paid (which is good) instead of the interest saved (which is potentially misleading) but has other oddities like the mortgage payment being paid on the 25th of the month as previously noted by Calvin.
Calvin, you should have been an attorney instead.
I am no attorney myself but I believe there can be some pretty severe penalties for misleading / false advertising. If UFF is still in business, they can’t be “lying” all that much, or am I missing something here?
By the way, I believe the difference between a pyramid and an MLM structure is that in a pyramid you only receive compensation for recruiting and there is no product or service being offered, this is illegal. In MLM there is no compensation for recruiting and a product or service offered, this is not illegal.
One extremely tangible benefit of having been exposed to MMA is that my level of awareness is such that I now know “I can do this myself.” Before MMA I didn’t know I could do this myself because I didn’t know about the HELOC strategy (irrespective of the prepayment method). For that knowledge alone I would have paid $3,500.
So to all those UFF agents out there, thank you for making me aware that “I could do this myself.”
To those of you who have decided to engage a more philanthropic demeanor by actively contacting as many as your friends as possible, and their friends as well, to freely show them how they can do this themselves thank you for helping make America more financially savvy as well as more debt free.
To those of you who have seen the MMA presentation and decided to do it yourself, send that UFF agent a thank you card for making you aware of said fact thereby enabling you to save thousands upon thousands of dollars in interest payments.
To those UFF agents who are out there showing the MMA program, thank you for making so many consumers aware of the fact that there is a better way; especially those consumers who would not otherwise have ever had the opportunity to see an incremental yet significant acceleration in their net worth due to MMA.
To Calvin, thank you for helping to stimulate so much discussion on this subject and for your very many insightful observations. My only recommendation is to adopt a kindler and gentler disposition. Calvin, this is not an attack, but rather, constructive criticism.
To those of you who are paying financial advisors and/or passively investing in mutual funds in your retirement accounts, do your self a huge favor and learn how to actively manage your money yourself. I bet you knew you could do it yourself, right? So why aren’t you? Because you probably didn’t know that you could make money in an up, down, or sideways trending market. Also, and more importantly, because I most cases it is extremely difficult and virtually impossible to do it successfully without the proper investment in time to educate yourself in order to gain the expertise and discipline to do it right. However, the education and rewards can potentially make you financially independent for generations upon generations. By the way, I have nothing against financial advisors as I myself will soon be enrolling in a PhD program in finance.
For every product, service, concept, system, philosophy, etc. there will always be individuals on either side of the fence. This includes whether or not one should payoff their mortgage, or whether or not one should learn to manage their own money / invest in the stock market.
Which side of the fence are you on? It is up to you to do the research enabling you to make an intelligent and informed decision. Even so, some of you will select one side, and some of you will select the other side. That is the beauty of having freedom of choice.
Charles
Charles,
You are entering a phD program in finance and didn’t know sending more money to your mortgage will pay it down faster and save interest? You think knowledge of the HELOC shuffle, a system that pays down your mortgage slower than simple prepayments, is worth $3500?
A phD student in finance….???
Much like UFF agents claims…..something isn’t adding up.
calvin
ps. MLM/pyramid scheme. People doing MLMs get money for recruiting people, or at least a commission on their recruit’s sales. That’s actually the very definition of MLM. The government draws the line (IIRC) between a pyramid scheme and a “legit” MLM at 70% of revenues coming from recruitment activities versus sales of product/services to end users not in the company (actual customers, not people in the MLM structure buying the product/service).
Calvin,
You really think you are providing a noble service by making people feel stupid in comparison with your superior knowledge of finance. My experience is that “average” people are discovering for the first time in their lives a way to help them overcome the stranglehold of unmanageable debt through a money merge system concept, even if it costs them $3500 to get it. They know they’ve wasted far more money than that all of their lives and now they see a product that can guide them through a process that will build their esteem and restore lost dignity instead of giving them empty feelings for spending so much on things they don’t really need, as they have done so often in the past. So a mathematical genius like you comes along and pounces on them, deflating the esteem they have derived from this breakthrough experience in their lives, and making them feel stupid and victimized.
But you are not content to make the “average” person without your financial acumen feel stupid, you also want to make them feel like they have been taken advantage of by planting seeds of doubt in their minds bout the integrity of the company that has sold them the product - UFF - even though you have no evidence to back this up (such as pending lawsuits, customer complaints, unfavorable reports submitted to Better Business Bureaus, etc.)
Calvin, if you really want to help people leave the UFF clients alone. There may be a better way out for them, but least they are doing something and the chances of them finally succeeding are very good. So instead of going after UFF users like a Lion after a Zebra why don’t you use your superior acumen to help people like the lady you mentioned in one of your posts who sought your advice. If that’s a true story I would consider it to be a worthy gesture on your part and one that not only helped this lady but brought a sense of satisfaction to you as well. There are thousands more people like her in this nation and probably hundreds more in your neighborhood or community. Would not helping these people be a more productive usage of your time?
Your comments in this blog remind of the time I went to an auto parts store with my son to purchase a particular item for his vehicle. Because neither my son, nor I could speak the language or knew the nuances and subtleties of the type of part we needed, the man behind the counter felt (I guess) that he needed to build his own esteem by letting us know how stupid we were. His incredulous looks, rolling of the eyes, and frequent turn to his colleague with the look of unbelief, made my son and I feel pretty small. We didn’t tell this man that my son was about to complete his medical residency and soon would be a doctor of internal medicine. Neither did we let him know about my advanced degrees in areas not related to automobile science. As we were leaving my son turned to me and said something like this. “I wonder if I should act like him if he got cancer or something and I wound up being the physician treating him and had to explain to him his condition.”
Why is it that some people can only feel good about themselves by making other people feel stupid?
I am NOT a mathematical genious. That’s kinda the point. If you can do 3rd grade math, you can outperform this “system.” As a self-proclaimed educator, why do you insist on stiffling the truth? Contrary to your agenda, I HAVE backed up my claims with facts. A user asks for a comparison, I posted one. You ask for complaints, here’s one I’ve already posted to you on another board:
http://www.ripoffreport.com/reports/0/324/RipOff0324581.htm
go to the FatWallet finance forum and you will find plenty of people like me proving plenty of people like you wrong. Why? BECAUSE WE HELP PEOPLE, NOT ROB THEM. I get dozens of emails a week from people asking for spreadsheets with amortization schedules, and help interpretting the information (read: garbage) from the UFF agents. The UFF system doesn’t teach people anything. If anything, it misinforms them. Are some of them better off than they were before, maybe. I don’t dispute that in some cases. However, as some who believes in helping people, I don’t think it’s right to charge $3500 while telling people it’s the space-age algorithm that’s making the improvement. It’s their money that’s making the improvement. If you help people learn, then they avoid more pitfalls instead of relying on a dishonestly marketed black box that is hiding the truth from them.
I’m not going to stop telling people the truth about this crap. And not just the UFF, but all debt accelerators that are nothing more than prepayment systems in disguise. I love the “thank you”s I get from people that tell me they learned about finances, instead of paying through the nose to still be in the dark.
Keep up your obvious deceit and lies, it only makes your crappy MLM product look worse.
here are 2 articles that should be required reading for anyone considering these merge accounts
!
“Smoke and Mirrors”
http://www.theage.com.au/news/property/smoke-and-mirrors/2004/09/28/1096137225560.html
“Predators Among Us”
http://kuzenovich.com/articles/79/1/Money-Merge-Accounts-Predators-Among-Us/Page1.html
Financial ignorance is the ultimate (and perhaps easiest) weakness for scammers to exploit. It is sadly amazing to me the number of people who are so easily duped by lies and psychological manipulation into financial scams like these.
Tell them what they want to hear, make up some lies, leave out all the most important financial details, and releive them of $3,500… it’s a printing press.
It’s really quite sad… and an indictment of the general public’s financial education.
Despite copious proof from every angle that the HELOC b/s is more costly, more risky, less efficient, and in general a bad idea… despite exposure of the lies and misrepresentations, despite proof that the schemes are worthless… there are still those who want to believe and/or justify their bad actions and bad choices.
I think Penelope Hill, a lawyer at Victoria’s Credit Helpline says it best: “The way these loans are marketed is deceptive and misleading. It is a total scam. If brokers and lenders were honest about what these products do, no one would buy them. There would be no reason for anyone to be in one of these loans.”
I have read several comments left on this page and have came to the conclusion that several U1st Financial agents have left comments encouraging people about the MMA system. What I find interesting is why is there so many U1st agents looking into the matter of the system they praise as being ligget. I my self have a u1st appointment but have yet to sell anyone on it until I am able to try it out my self. I do believe it works but only if you are able to stay on track which this product should help you do. However life happens so dont believe that everything will work just like the scenario shows. I’m a financial advisor and I understand the concept of simple interest/revolveing interest and compound interest as a consumer you should studies these concepts and the MMA may become more clear and you may decide you can do this without spending $3500 and if you can more power to you. Best of luck and alway’s ask the pushy sales guy if he’s using the system and if so show you the results and if not WHY?
Lots of anger on this blog!
I’m a client of UFF…on the MMA and happy I spent the $3500.
It’s a coach…it’s a system to follow that works if you follow it. Brain dead simple.
Do people with personnal trainers get better results than those that buy a home gym? Most of the time. This is no different…it keeps you accountable…and since I spent the $ (which actually paid itself back very fast) I use it and follow the system. It’s working for me.
Relax people it’s not that big of a deal!
OMG! I have just read this entire thread and I have to say, while some great points have been made for either option, I found that while most of you seem to see yourselves as brilliant mathematicians, I have to say your grammar and spelling is horrendous!!!!!
Calvin you have absolutely no concept of the program! The program is not built strictly for Mortgages and it is not a prepayment plan! I really think you should buy the software just to get a clue! I beleive in your case $3500.00 would be a small price to pay for you to actually get an education. SERIOUSLY!!!
Of all all the comments I have read the ones that make the most sense and of course deliver actual useful information are the ones that state “Find a solution that it is right for you!”
If people did not need help there would be “NO” solution programs available, Dinancial planners would not exist.
SERIOUSLY people, take what you read here with a grain of salt, and make your own decisions. Only you can determine what is right for you, not the CALVINS or the UFF Agents of this world.
Calvin, as a side note some of your points are good, but you sound more pushy and full of hot air and anger than anyone else on this thread. Not one person on thsi thread has LIED, they are just stating what they know and what has worked for them. FIND A HOBBY…perhaps a school that teaches class and decorum!
LOL
So we have another person selling the software that can’t back it with math.
We all know it’s a prepayment program. Prepay whatever debt, you are right there, doesn’t have to be a mortgage. But certainly no fancy (read: overpriced) software to do it, just send your extra money to your highest interest rate debt.
I like how people think that one has to buy the program to understand it, especially when the people that bought it can’t do the math behind it while those of us showing it to be a colossal waste of money can do the easy calculations.
Anyways, the UFF has asked their agents to stop posting to sites like this because of the google search results it produces. I certainly hope agents keep up the lying as it helps show potential clients the lies that the agents tell to sell the worthless product.
We’ll keep fighting the good fight, you guys just keep lying, it does nothing but help our cause.
cal
So imagine in this economy where people are losing their jobs left and right and losing thier homes to foreclosure. So Calvin says save the money. MMA says put the money all in the house. you are 3 years away from paying off the house lost your job and you have all this equity that’s been lost in the house because of the bad market. Your neighbors have walked away from thier homes and property value declined 30-50%. Would you be pissed that you put so much money in the house and not much in savings ? I hope the plan includes 1 to 2 years of emergy money in the bank since HELOCs have been reduced on lots of homes now.
I never said save the money, I said save the $3500 and not buy any MMA program.
The decision to save, payoff low interest debt (mortgage), invest, spend like a madman, etc is a personal choice. There is no one-size-fits-all plan, which is another flaw in the UFF program since it has one goal, to be debt free. Properly managed debt can be a very powerful tool. Nearly every single American cannot buy a house without this tool, at least not anytime in the family bearing years. While I have my plan, I would never say “use my approach when balancing savings, investing, debt payoff”, I am merely saying don’t pay someone $3500 to do something that takes no more skill than balancing ones checkbook.
cal
I have been approached on this and have made up my mind that it’s a joke. I have been looking for ammo so I can shoot holes into the agents speach. I think of all the tings I’ve read on here. The coolest thing was when someone said “Put into you $3500 software that I have NO, ZERO, $0 descrecionary funds to put towards principle and show me what my benefit will be?” AWESOME, it’s MINIMAL! Definanlt not worth $3500!!
Ernst & Young -anyone care to take that award on?
Sure, I’ll easily take that award on. Simply said, Earnst and Young didn’t award them anything. Earnst and Young sponsored a competition. They didn’t pick the entries. They didn’t pick the judges. They really didn’t pick anything other than chosing to put their name on the award. If you go to E&Y’s website, they will outright tell you that the judges are local entrepenuers, etc. So basically, they won an award judged by people local to them, possibly friends or partners. Who knows?
Personally, they are award worthy. They got tens of thousands of people to spend $3500 on software that tells them every so often to “write a bigger check” to the creditors, even though they could already do that for free.
Does that help?
The very fact that Ernst & Young chose to put their name on the award speaks volumes. A top four global accounting firm would not risk their name and reputation on any company not worthy of the award.
“The very fact that Ernst & Young chose to put their name on the award speaks volumes. ”
The very fact that you email them and they say they have absolutely nothing to do with the selection of nominees, the judging, or the award speaks volumes. They want NOTHING to do with the UFF.
Face it, you chose a bad argument. Try something else…try the savings….oh wait, that’s already been shown to be less than what anyone can already do for free. Try the marketing….no, not that one either…..we’ve already shown it to be misleading at best, fraudulent at worst.
The only winners with the UFF are those selling the product. And agents and principals are leaving this company left and right.
Game over.
Calvin,
I volunteer at a senior center and was asked to come and listen to a financial aganet who wanted to present his Debt/Cash management program to the seniors in the center. I had never heard of this program before, have been going some surfing and have read a little on several sites. This forum has been very illuminating. I do have some questions though.
1) Since few people actually live in one house for 30 years and most move every 5-7 years (think I read that somewhere). What hppens to the program I have paid for, do I have to sign up for and pay for another program with the new mortgage information?
2) The agent I saw said you didn’t need a HELOC, you could just use a savings acccount, but I get less than 1% apy on a savings account now, so I don’t think the figures are going to bear out the promise.
3) If I have had a mortage in place for say 10 years, what is the return then?
4) If you have a HELOC, what are the terms of repayment? We had our construction loan as a LOC and it was callable at any time for any reason. When we finished the house we immediately went for a regular mortgage.
Thanks for your input. Those who attended this presentation were asked to let the center’s director know what we thought ot it. Quite frankly, most of the time I couldn’t follow the guy, terms were too vague, same talk about this very complicated algorithim involved, and the lack of personal responsibility or motivation as the reason to plunk down 3500.00. And I am an accountant, tho not in the mortgage business. I did a mortgage table, 100,000, 30 years, 6% and plugged in an extra payment of 3500 with the first payment and shaved 32 months and over 15,000 of interest off the end.
Bottom line is, I won’t recommend the center allow this guy to present this mlm scheme. And, spend less than you earn, it always works.
1) Since few people actually live in one house for 30 years and most move every 5-7 years (think I read that somewhere). What hppens to the program I have paid for, do I have to sign up for and pay for another program with the new mortgage information?
from what I’ve heard, you can transfer the “program” to another property for $500. But since the program doesn’t do anything worthwhile…why do it in the first place.
2) The agent I saw said you didn’t need a HELOC, you could just use a savings acccount, but I get less than 1% apy on a savings account now, so I don’t think the figures are going to bear out the promise.
You can use a credit card, savings account, HELOC, or a mattress full of cash. All this system is is really just sending a bigger payment to the bank each month, just in disguise.
3) If I have had a mortage in place for say 10 years, what is the return then?
The return of the program is negative since it is slower than what you can do on your own (just sending your leftover money to the mortgage each month). Why spend money to write a bigger check each month when you can already do that for free.
4) If you have a HELOC, what are the terms of repayment? We had our construction loan as a LOC and it was callable at any time for any reason. When we finished the house we immediately went for a regular mortgage.
The terms of repayment will be whatever the contract you sign with the bank. The HELOC is between you and the bank, it has nothing to do with the MMA or the UFF. They are just using it as a vehicle to write a check…which creates a debt which you repay with your money. Or you could just pay the mortgage directly with that money. It’s pretty much the same thing, except to $3500 fee.
Hope that helps.
calvin
“Using the banks money” – We started out by taking out a loan called a mortgage, using the bank’s money. Now that it’s time to pay the loan back, we need to get the money from somewhere. Usually, it comes out of our paycheck. But MMA claims that if we use a HELOC, we are not using our money anymore, we are using the bank’s money. But, wait, we started all this by using the bank’s money to take out a mortgage and now we have to pay it back. So that means if we use the bank’s money by taking a loan out of the HELOC, we have to pay that back, too. So all we did was postpone having to pay the bank back by using the HELOC money to pay the mortgage. We still have to pay the HELOC back. Where is that money going to come from? Out of our paycheck. So why should we spend $3500 on MMA to play a money shell game with a HELOC?
“Interest cancellation” – MMA claims that by loading up the HELOC and running our paychecks through the HELOC, we reduce the balance so much that we save lots of money that way, and that alone is worth $3500. OK, so how much can we save? Well, let’s assume our mortgage rate is 6%. That means each month, we are charged 1/2% on our mortgage balance, the whole balance. But if we are using interest cancellation, the most that we can save is whatever our monthly salary is. So, if we bring home $5,000, the largest HELOC balance we can offset is $5,000. How much will that save? $5,000 times 1/2% is $25. That’s $25 per month or $300 per year. So MMA wants you to spend $3500 upfront to save $300 per year. Do you know how much interest you would save if you just put $3500 towards your 6% mortgage? OVER $4,000.
“Factorial math” – MMA claims no one except a computer can figure out the best possible way to pay all your bills and debts because of all the possible combinations. LIES. There is only one SIMPLE BEST way to pay off all your debts. You pay off the highest interest debt first and work your way down using a DEBT SNOWBALL. It only needs addition and subtraction.