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Money Merge Accounts: Are They A Good Deal For Home Borrowers? 1226comments
Yesterday, a reader wrote to me and asked about money merge accounts and whether or not they are a good deal for homebuyers. Of course, this means that I popped open my trusty spreadsheet and started doing some calculations.
Hold on, what is a “money merge account”? A “money merge account” is a special home equity line of credit placed on your home. Every time you receive a paycheck, the whole thing goes straight towards first paying off any balance in your money merge account, then the entire remainder of your check goes towards paying the interest, then the principal of your home loan. Let’s say you had a mortgage with $1,500 payments and you set up a money merge account. Each month, you received $3,500 in paychecks, but only spent $1,200 (and sometimes less). That means that automatically $2,300 (and sometimes more) goes towards that mortgage each month - an extra $800 towards principal every single month. This means a 30 year mortgage would be paid off in 13 years and two months.
Here’s the catch: to get into this program, it’ll cost you. I examined several money merge account options online and the rates varied from $1,800 to $4,500, with the average coming in around $3,000 to get started. This is added to the principal of the loan.
In other words, the fee adds about $20 to each minimum payment over the life of a loan, and in the accelerated calculation means that you’ll make almost exactly another month’s worth of payment - it will take you 13 years and 3 months to pay it off.
On the other hand, you could theoretically do it yourself. Start using a high-interest checking account (like Electric Orange, which gives you 4% interest) and then send every cent you can to the mortgage payment. Going back to the earlier scenario, if you always kept $1,000 in there as a buffer, got paid your $3,500 at the start of the month, spent $1,200 throughout the month, then sent off everything down to $1,000 at the end of the month to your lender, you would pay an average of $813 extra each month (that extra $13 comes from interest on the checking account). Given those numbers, you could pay off the mortgage in just barely over 13 years (the final payment is a tiny one).
Although that seems like a better financial deal than a money merge account (and it is), it has one huge risk: you. As we’ve discussed before, individuals are a huge risk because of their desire to spend money that’s “just sitting there” in an account. It wouldn’t take much at all over thirteen years for you to take money that’s already yours and spend it on something else.
One psychological advantage of a money merge account is that it encourages frugality. Why? It puts you in a situation where every dollar you spend basically goes onto your mortgage principal. See that bag of chips at the store? Is it worth it going onto your mortgage? You can use your own home as a psychological tool to be thrifty - and thus get out of the mortgage sooner.
If you have a lot of financial discipline, doing it yourself is a better deal than a money merge account. However, if you’re prone to spending extra at all and have found yourself saying, “Well, I have plenty extra right now, so I can afford it,” then a money merge account is probably the fastest way available to you to pay off your mortgage.
Comments
I’d be wary of this type of money merge account, simply because your monthly payments don’t get put off when you over pay. Sure, you’ll blow through your mortgage in 13 years, but if at any time in those 13 years, you are out of a job, you won’t have a savings account to fall back on since all your money was “saved” in house equity.
You don’t want to be 8 years into prepaying your mortgage, and then lose a job, and have the house foreclosed on, that’s a horrible situation, which could have been solved by not giving complete power over to the mortgage company. Just pay extra by yourself, and you can eliminate this giant threat to your home.
Chris…
Do not worry… with the true money merge account you do not NEED a savings account… you have the equity line of credit if you need a financial cushion. In fact… with this program you will never be late on a bill again… and will have perfect credit (provided you do it right).
That is the whole point of this program. It is easy, and safe. Also… even if you can only qualify for a small equity line at the start… as you pay down your mortgage… you can have the bank raise it. Within a year you should easily have enough of a credit limit on the equity line to cover a 6 month (maybe longer) job loss situation. If that happens you pull money out of the equity line… then put a small amount back to satisfy the interest-only payment option (make sure you get that feature).
Chris,
Another positive point for the money merge account is that although you will save money by putting everything into your mortgage (by paying it off quicker), there is no harm in keeping a comfortable amount behind you in a savings account or CD (a safe investment) in case of such a situation as losing your job. Also, as Benjamin stated, you will have your line of credit to fall back on which can be adjusted as you gain equity in your home. This program tracks your unique earnings and spending habits and helps you keep your line of credit at a level that will minimize the amount of interest charged. That means that just because you have access to a certain amount, doesn’t mean you have to max it out. The MMA actually helps you keep the line of credit at a more manageable level so that your income can offset the balance without leading you into more debt.
Hope this helps.
Shari
Could someone please show the full HELOC spreadsheet of the example the MMA program uses in the video. They show the mortgage on the left hand side and the HELOC on the right hand side with about 10 lines of a spreadsheet. Could this be shown for the full 10.4 years it takes to pay off the 200,000 mortgage @ 6% =$1,199 per month. Just show the variables used in this example over and over again for the full 10.4 years and show the mortgage being paid off and the HELOC being paid off at the same time. If the example never carried this out for 10.4 years but just wanted to show you 10 lines only, could someone who is smart enought to do this on their own spreadsheet please do so and post so we can all see this carried out until the end just like you can see your amortization on your original mortgage carried all the way out to the end. I would post this example myself all the way through if I was smart enough to know how to do it and show it to everyone. Thanks.
Where is the above mentioned video being shown?
Thanks
This is the corporate website that displays the video mentioned by TIM.
http://www.xmission.com/%7Eu1st/mma100.html
This MMA program does more than what most spreadsheets will show, it takes into account all your financial variables that take place in your daily life. It gives you the best scenario for paying off your mortgage and usually other significant debts all in the same time frame. You become mortgage free and free of the debts included in the program at the same time and like mentioned above giving you a safety cushion all the while in case of emergency situations.
If you look at the video very very closely you will see that one of the first steps is to send a $3500 check to the folks who are pushing the program. They really gloss over this, but the bottom line is tht you start right out another $3500 in debt.
Although MMA’s can be a useful tool, you can do it yourself dropping $3500 on a MLM scam.
You writing illustrates a little bit of confusion about the Money Merge Account. E-mail me and I will be more than happy to shed some light for you.
Regards,
JAM
You can say “It costs $3500″, or you can say “What is my return for my $3500 and is it worth the money to ME?”. You can do the same thing with many other products. For example, I can push-mow my 2 acre yard, or I can buy a riding mower. How much is my time worth? That question is different for everyone. Some people enjoy push-mowing their yard. Some people enjoy crunching numbers in their spare time. Some people invest in the gym, some walk or run in their spare time. After all, you can do it yourself. You can hire a contractor to remodel your kitchen, or you can do it yourself. You can join Weight Watchers or diet on your own. But if you don’t actually do it on your own, then there are products out there to help you. It all depends on what works for you. This program is not a one size fits all. We all choose to spend our money on different things, that is our freedom and our right. If it’s not worth the money to you, don’t buy it.
In response to Jay about the first step being to send them a check. Well, isn’t that the first step in most anything you buy? If you buy a car, they want their money before you drive it off the lot. If you buy groceries, you pay before you leave the store. If you buy a house, etc. See where I’m going with this. We are all consumers and we all have choices. Some people buy name brand, some buy generic. Neither choice is wrong. The choices we make are individual and what is good for one may not be good for another.
I realize this is getting long so I’ll finish up. Yes, I have purchased this program. No, I am not selling it (that is my choice). For my situation, this product is a wonderful investment. Do your homework and make your own choice. But be sure you have all the facts and not just opinions. This product does work, but is it right for you?
This article is good, honest, relevant, and fair … a credit to good journalism.
However, it does miss one very important point… with the MMA you would still need to exercise ‘exactly the same amount of financial discipline’ and control that you would need to exercise if you instead simply managed the pre-payment on your own.
If someone needs help managing their finances (psychological, arithmetical, conceptual, or otherwise) then Quicken 07′only costs $30 … and is actually a much more sophisticated financial management and budgeting tool.
When you dig deeper into the MMA cash flows and apply some rigorous graduate level financial analysis… the ROI, IRR, and even NPV on the $3,500 upfront investment cost you pay today… it shows this is not the best available comparative investment of $3,500 for most homeowners.
Most all folks would simply be better off paying that $3,500 toward pre-payment of their mortgage or other debts instead.
The vast majority of the interest saving come ONLY from the homeowner’s pre-payment of the debt/mortgage from their own monthly income. That’s just simple obvious common sense…
Don’t loose sight of the forest by focusing only on one particular knotty tree.
Anyone come up with an Excel spreadsheet yet that ties in your monthly budget with an amortization table? I have to assume we can all do the same thing here and save ourtselves $3500. I don’t think, as claimed by the people hocking the MMA, that there are some fancy algorithms at work here. It’s an overpayment mortgage am table, (available for free on the internet), linked to a budget spreadsheet. No? However, if the MMA could magically reach into my wallet, steal that extra $20 before I blew it on Keno, and scold me for being a moron… now THAT would be worth the $3500.
All one has to do is go to http://WWW.DONNELLMORTGAGE.NET or any other website with financial calculators and they can run the numbers for themselves with as detailed of a breakdown as you want. All this seems to me is a HELOC being sold as a rolls royce. Simply use your head and pay down the 1st or 2nd with any extra income that you have left over at the end of the month. Also, a bi-weekly payment plan is not a bad idea to do on top of adding more money monthly above and beyond the minimums.
As mentioned previously, if you are a financially disciplined individual, a Money Merge Account, or a One Account, makes a lot of sense. And you don’t need to pay any bank or company any money. All it takes is a home equity loan. Some people feel like they must have a savings account for that “Just in case” moment, but as Ben mentioned on March 4th, as you pay off the loan, you are aggressively “saving” money on your line of credit. If you lose your job, simply withdraw money from your line to satisfy your needs.
This is a great idea; just don’t pay anything for it!
I can agree with Ron above, in part. It still does take financial discipline to use the MMA Program, but you still miss a certain point:
The MMA Program actually encourages that discipline, by showing people what happens when they make their decisions. They get to see the effects of their money, and how that affects their mortgage. Thos who claim that the same can be done with an Excel Spreadsheet simply don’t get it: this was designed for those who need the help. For people like me who spend 2 minutes a month balancing their checkbook, and then throw it into a sock drawer.
The actual fact is: you can do it on your own…just not as well as with the MMA Program.
If in doubt, then consider http://www.thejubileeproject.org/on_my_own.html .
Do your research, take your time and know what your getting into. I personally saved over $109K and shaved 22 years off my mortgage, BUT…it was right for me, for my goals, desires and as Ron said above: my discipline level.
I don’t think most people do (or will) give this Program enough credit…especially when they constantly refuse to include the ongoing personal support until the payoff of their mortgage and the written guarantee. Those in itself was enough for me to invest my $3500.
Remember that this MMA is not an automated system; rather it is only a reminder to do something which you still need to do 100% for yourself. Controlling your unnecessary spending and instead paying down your mortgage and your other debts is something that you still have to do yourself. There is no magic or miracle… just self discipline and common sense. Spending $3,500 will not buy that for you, you still have to do it yourself.
(As Noted Above) The same, and actually greater, interest savings can be accomplished by pre-paying principal on your own. For more information or to get a better understanding of the math / calculations and of what’s really going on behind the scenes with many ‘equity accelerators’, like the money merge account, check out the below links for more Free independent information.
http://www.integramortgages.com/FinancialVOODOO
United First Financial has said time and time again that if a client is truly disciplined enough to apply towards principal on their primary mortgage a set dollar amount of money each month; regardless of unforeseen financial situations that may and do occur in everyday life, then that client would experience a comparable performance on their own as they would with MMA.
However, what United First Financial has found as a company is that the MMA is a tool not a cure. Money is money, finance is finance. MMA has the ability to look at so many variables at one time which is typically beyond the capacity of the average consumer. As a model example in which the client can consistently apply $600 a month toward their principal, is good in theory but not so much so in practical application. Where the client would be set on $600.00 a month, the MMA software, looking at the big picture, would take very small amounts of money into consideration that are not included by the client in this example to produce large amounts of additional savings. MMA also has the ability to allow the customer to see how these seemingly small amounts of money will produce huge savings. The addition of $10-$50 a month will drastically alter the performance of the product.
The converse is also true. If a client has a particularly poor month financially, in their program they would not be able to send any additional funds that month to the mortgage, but MMA viewing the long run would still prompt the client to send additional funds. It would accomplish this by “automatically” adjusting the funds transfer dollar amount and interval.
The clients that are currently on MMA that have had similar initial responses or sceptisisms to MMA are experiencing performance from the product that they never counted on. Our average client across the board is performing a minimum of 20% better than the initial guaranteed numbers United First Financial supplied them at the onset; one year later. They do not, can and will not say that a client can not do something similar on their own. What they do say is that once a client is on the product; the product under promises and over delivers.
I have friends and clients on this product and NO ONE has EVER been disappointed or felt they were overcharged! In fact it’s quite the opposite. They love the simplicity of this very complex program AND have peace of mind they’ve never felt before with Customer Service just a phone call away.
I know someone will now write desparaging remarks on what I’ve written. Go ahead. I will continue to share the message of hope that so many are finding with the MMA. It’s my ministry to a hurting world.
Why anyone would PAY someone to help them do what they can do themselves is beyond me. Also, the people pushing this program are just MONEY lovers who are no better than snake oil salespeople and will do anything to get you to give them a penny, a dollar, or as much as they can sucker out of you. People WAKE up, learn how to use your money to your advantage and don’t GIVE anyone else a dime. Those of you who have already done so I hope it works well for you. I’ll check back in 5 years.
You know everyone here has Alot of good stuff to say! and it is all their OWN opinions! But America is a country where money is a serious thing! I agree the MMA program is a very good investment for those people that are unable to dish out the xtra $50-600.00 or more money, a month, most people I know live pay check to pay check, and there is not anything left at the end of the month. I really liked what Shari said back on March 23rd, if it is good for you then do it, if not then don’t! I first heard of the MMA program and my first thought was how can I help people do this for themselves! Not how much $ can I make! Not everyone out in the world is out to sucker $ off of someone, There really are people who still care about others!! And if I had to spend 3500$ to SAVE $152,534.49 off my mortgage, (which mind you stays IN my pocket over the last 14yrs of which I would have been paying to the bank) I would do it in a heartbeat! (which I did)that could pay for part of the colleges I will be paying for my 4 kids! SO check it out and see if it is for you if not, then it is not but let the people make their decisions for themsleves. And seriously on the other note there really IS some good Shark oil (never heard of snake oil) out there in the market place. (I’m 39yrs old)& I lived in pain for 16 yrs and no longer suffer from it BECAUSE of this shark oil!
Best of luck to all of you in your OWN decisions!
Take care
SK
Ethical Person,
you said: “Why would anyone PAY someone to help them do what they can do themselves is beyone me”.
Let me ask you some questions… Do you change the oil in your car? Do you cut your own hair? Do you go out to a restaurant where a cook or a chef makes your food? Do you have a bank or an investment advisor invest your $$ for you, say mutual funds, reits, etc..??
I am willing to bet you answer YES to all those questions!! Why, you can do all the above yourself??
Let me ask you another question… If people can do this program or concept themselves, then how many of them are curretnly doing so? I dont know anyone personally or professional that is, and i am in the mortgage business (you’d think i’d know maybe one or two)
Is it true that similar results can be accomplished if someone has the time, and abacus and knowledge of spreadsheets (that’s actually 2% of the population). You still won’t beat the software, maybe you could come close though…
To me, time is $$! My business partner and I spent $3500 and apllied this towards an invesment property we have, and so far it’s we are very satisfied. Once that’s paid off I plan on using it for additional properties in the future. I am now offering this as an extra feature to homebuyers and those existing clients that want to purchase or re-fi.
I just googled “amortization schedule” clicked on a link and put my mortgage information into the calculator. Then I put in additional $700 a month and it knocked off 15 years of my loan. I will call my mortgage company tomorrow and add that to my autopay and I will pay off my loan in half the time.
If anyone would like the above instructions mailed to you please send me 3000$.
Ethical ARE YOU KIDDING ME?
do you hire a painter? do you Hire a plumber?
an electrician? an auto mechanic with a little book know how you could do these things too.
like others have said Some have the skills,the TIME and patience to work this out. I have five kids each has their own schedule. each play sports at different times.
I don’t have the extra hours to do this on my own time. MMA takes minutes.
Wish I had an extra $700 a month to add to my mortgage but, like most people, I don’t. Also, once you send that $$ in, it’s gone. With MMA you still have access to it through your heloc. And, as Jack said, it takes minutes. I have kids who are very involved also and when I do get a free moment, I have other things to do, like reading a book with my 6 yr old. Like I said before, there are many things we can do on our own, but we have to choose which ones. I don’t have time to do EVERYTHING on my own so I make an appointment to get my hair cut and I have a riding mower for my grass. That gives me the time to watch my kids play sports, and help them with their homework and clean my house (unfortunately I have to do this one on my own *sigh*). Good luck to all in whatever decisions you make. For me, this is one less worry and well worth MY money. I’m sure there are others that feel the same, just as there are those who don’t. Happy Easter everyone.
Life is good. We live with free will. All of us have learned from our parents and grandparents how to make money and/or loose money. There are very few of us that were taught how to build wealth and/or loose wealth. After being in the mortgage industry. both commercially and residential, helping people get into homes with a great passion. This “system” will guide us in the financial path that that works for us. It gives us the options. If we could hire a “personal” fincial planner over the course of our next 3 home purchases for a measely $3,500 - Sign us up! Yes, I’ve purchased the program, and an agent. My goal is to give us an option. Thanks for having this forum.
Once again could someone show a spreadsheet for the HELOC from the MMA website example where the client has a 200,000 mortgage at 6% so the payment is 1,199 per month. The client has 5,000 a month income with 2,801 per month expenses and has the 1,199 mortgage payment leaving 1,000 in discretionary income per month. The HELOC example on the right side of the spreadsheet shows only 10 lines of the product at work. Could this exact spreadsheet payoff be shown for the entire 10.4 years on the HELOC side (not just 10 lines) with no extra variables included, just the 5,000 income, 2,801 expenses, 1,199 mortgage and the 1,000 discretionary income. If I could do this, I would post the full spreadsheet myself, but I cannot figure it out. Is there a timing mechanism involved in the equation to keep the HELOC as low as possible and how does that work? Also, how much discretionary income was used to pay off the mortgage in the example. Sorry I’m not good at math and cannot figure this out. Was a HELOC not a great and super product before the MMA program came out? Why did we not hear so much about a this great product called the HELOC before the MMA program was produced? I had only heard of a Home Equity Loan prior to all this. Thanks for the help and answers to my questions.
I am so glad I found this blog. Some great information and discussion. We have been approached to buy into a $3500 money merge account program. Probably the same one that is being discussed here. I have to admit that we are not very disiplined with our money management and I am not sure that we would follow the MMA tool’s advice either.
We are more interested in increasing equity over the next 3-5 years, than we are in paying off the mortgage in 14-15, because we hope to upgrade to a better home by then. How can we determine whether the $3500 is better spent on a tool or on paying down the mortgage principle by $3500 now?
Another factor which we have not heard addressed is the effect of reducing our biggest tax deduction. Does the savings in interest payments each year greatly outweigh the tax savings?
What I have not seen discussed here is the alure of the available credit on the credit line. It is no different than a credit card, except that presumably the interest rate is less. While I admire all of you who have the discipline to tap this line exclusively when told to do so by the MMA program, I suggest that most Americans are not nearly so disciplined and will not be able to resist the siren call of available cash. Our economy is run on the general public’s need for immediate gratification. Again I say that I admire those of you who are able to resist such temptation.
At the end of it all, those who buy the MMA program may well wind up oweing their mortgage and the payments on the credit line - including the $3,500 to purchase the MMA program. Taking on more debt is rarely a good way to get out of debt. If you are in a hole, quit digging.
Good luck!
Robert-that is a very good point. One of the coolest things about the MMA program is that the numbers are looking you right in the face so you see how your spending affects your payoff. I am very disciplined when it comes to my finances and we don’t carry balances/have loans so this program kicked in right away and is making a huge difference for us. But I think this will be a great tool for those who need help staying focused to not overspend. Everytime you make an entry into the system, your payoff changes so you can SEE how spending will affect it as well as the affect of earning more, or putting more into it. It has helped my dear friends to cut down on their pocket cash each week because they never thought about how much they wasted, until they saw it in black and white. Also, the program helps you to keep your credit line balance as low as possible so you don’t get yourself in more trouble. That being said, you are absolutely right that if you spend more than you make, nothing will help you. If you are always in the hole, YOU need to change your lifestyle. But that has nothing to do with how this program works. The program simply funnels your money through different avenues to make it work more effectively for you and less effectively for your creditors. As long as you have a positive cash flow, it will work. It’s not a cure-all and it doesn’t perform magic.
There is a lot of good detail here that should help a lot of folks become informed and make a better financial decision for themselves.
There have also been a number of requests for info and spreadsheets to help folks understand what’s really going on, and even how to do this themselve, or to at least understand the baseline results that they can already achieve by simply pre-paying their mortgage with the extra cash they earn every month.
For anyone who wants more info we have been providing FREE customized excel pre-payment spreadsheets to aid you in your analysis… just follow the below link and send an email to request the spreadsheet(s). http://www.integramortgages.com/FinancialVOODOO
If any homeowner, consumer, real estate professional or accountant is interested in more detailed information and truly analyzing these equity accelerator programs ‘particularly the Money Merge Account’ for themselves… below are some links to information that should shed a lot of light on this particular topic.
1) http://www.integramortgages.com/FinancialVOODOO
(FREE Mortgage Pre-payment calculators, FREE alternatives, details and opinions)
2) http://www.mtgprofessor.com/A%20-%20Early%20Payoff/the_good_fairy_of_rapid_mortgage_payoff_is_back.htm
(detailed analysis information & opinions from the respected Jack M. Guttentag, former Jacob Safra Professor of International Banking at the Wharton School of the University of Pennsylvania & Yahoo Finance Contributing Author)
3) http://www.danmelson.com/posts/1171373759.shtml
(detailed sales tactics informatio, analysis, and opinions from an Up-Front California Real Estate & Mortgage Professional)
4) http://forum.brokeroutpost.com/loans/forum/2/95315.htm (a very direct opinion from an attorney specializing in real estate law)
5) http://www.fatwallet.com/forums/messageview.php?catid=52&threadid=709007&start=0 (various impressions, opinions, and info)
Wow! Fantastic dialogue. All the sharp people on here who are paying down their mortgage on their own, congrats. But, in reality, I know 90%+ of people just go on blindly making the monthly minimum mortgage payment and think that is fine and dandy. In reality, by using the HELOC and floating that money to pay down your first mortgage, even if it takes 2 years to pay down the HELOC again..if you are using that account as your checking account you will be much farther ahead towards paying off that first than you would be otherwise and save tons in closed end interest charges. In addition, people do need a plan of attack so to speak, and our software application does it for you. Bottom line, we all pay much more than $3500 in closing costs just to get a home loan financed correct. Money down the drain right? Sure we can write off those fees, but beyond that the money is gone. With an investment in the MMA program, that $3500 goes a long way towards really helping the average Joe get ahead and a real reason to stay disciplined.
All the best….
Barbara, How much do you really get back on your tax return at the end of the year as a result of your mortgage tax write off? For me it makes the difference of about $6000. If I didn’t have a mortgage payment (2300/month) I would have $27600 dollars more in my pocket every year. $21000 of those payments would have gone to interest alone. So you see paying a little tax isn’t as bad as all the interest to the banks! And even better you could buy another home or a vacation home. Check out my website at http://www.eliminateinterest.com and you will see the equity you can build in your home in 3-5 years. There is a very informative presentation on the site. I have a link to the corporate site and an email link if you have any questions for me. This is an amazing product. One guaranteed by United First Financial because it is based on mathematics.
I have this program. What I will tell you next will blow you away. To start my monthly net income is $11,166.00. My mortgage is huge at $1,110,206.00 at 6% (monthly payment $6,656.25). I really have a monthly discretionary income of $2,500, but I take that money out each month and disperse some into savings accounts others into mutual funds. So in MMA’s perspective I have a $0 discretionary income (no additional money going towards principal). I have the system for 1 year and according to the analysis they gave me when I bought the system I am exactly on tract. ***I will pay my mortgage off in 22.8 years saving $363,068.54*** Now tell me this system doesn’t work. The truth lies in using the system without using any discretionary income.
Can I do This On My Own?
Whether a question or a statement, it’s something we have addressed in podcasts, letters, online posts, articles and emails until our fingers bled.
Ok, they didn’t actually bleed…but they got seriously sore!
The black and white answer to ‘Can I do this on my own?’ is… yes.
Now, you can walk away and smile to yourself as you whisper ‘I knew it’, or, you can hear the conditions of that answer…
YES, you can do this on your own, IF you have the financial discipline and mathematical skill.
YES, you can do this on your own, IF you have the right kind of HELOC.
YES, you can do this on your own, IF you are willing and able to account for every penny at all times.
YES, you can do this on your own, IF you are willing to tally all those variables and refigure your financial position EACH AND EVERY DAY.
YES, you can do this on your own, IF you can do this day in and day out for the next 10, 12, 15, 20 years.
YES, you can do this on your own, IF you can do this without personal support if something goes wrong or you get confused.
At this point, we’d give you a medal if you could actually do this. Not likely, but we have met some pretty amazing and intelligent people since we started offering this opportunity to the country. So, we’ll give you the benefit of the doubt, and say you CAN do all this, because you’re SO smart and then add one more…
YES, you can do this on your own, IF you are willing to leave TENS OF THOUSANDS OF DOLLARS ON THE TABLE AND WALK AWAY.
If you can, we’ll hold onto that medal for being so smart.
Yes, you can do many things if you have the determination and discipline, which will accelerate your payoff, but is it worth it, when you have a tool in front of you that takes care of all the variables, and simply tells you when and what amount to transfer?
What’s the REAL issue? It’s not your pride. You don’t really have anything to prove to anyone. It’s about the $3500 price tag for the Program.
Just say it. We’ll wait.
Consider something: Would you invest $3500 to make $40K? How about $60K, $75K or $100K? Well, know that if you attempt this on your own, the simple fact that you are human, and cannot locate all the variables day to day, that’s the kind of money you could be leaving on the table…and now you have to do all the work, by yourself.
Make the decision that’s right for you. As for us, it was a no brainer.
Here’s what I say when someone asks me “Can I do this on my own?”
I tell them No…and you WON’T. Its that simple. And then I ask them, “have you ever kept a new years resolution for 8-11 years?” Thats what it would take to accomplish a portion of the results that are made while using the Money Merge Account. A complete and total readjustment of your lifestyle and some financial education. Do your research and don’t pass up on this opportunity.
Wes
I am doing this on my own. At the end of the month I put all money after expenses toward paying off mortgage. Don’t need a heloc-Don’t need to account for every penny every day-Don’t need any mathematical skills-Don’t need to refigure every day. I will be saving thousands of dollars. I did not even have to borrow $3500. Anybody can do this. As for me this was a no brainer.
Don,
With the MMA it puts all your discretionary money left over every month to work for you. The benefit of the MMA is that in the event that you need that money for some unexpected reason then you have it available to you because the MMA incorporates a Home Equity Line of credit as your checking account. The MMA allows you to leverage someone elses money (HELOC) to benefit yourself (pay down large portions of high closed end interest with money from low open end interest from your HELOC). Also the $3500 is not a fee. Its an investment. I invested my $3500 into the MMA and I expect a return. My return is $253,000 of interest saved on my mortgage. Let me know if you have any questions.
Have a great day.
Wes
I wish I could do it the way Don is! I recently signed up for the program because I DO NOT want to send ALL my discretionary income to my mortgage each month. Why? Well, last month I had to pay $750 for car repairs. Summer is coming and I have day camps to pay for. If I sent all my discretionary income, I would have ZERO flexibility. Once it is gone, I can’t get it back.
The HELOC gives me a buffer. Now I can send a good portion of my discretionary income and still have money just in case. I have to be careful. I don’t take out money from the HELOC unless it is absolutely necessary. Also, the program really does help keep you on track financially!
I have accumalated savings to pay for the extra expenses.You are smart not to put all your discretionary income into your mortgage every month until you have accumalated some savings.The $3500 you paid for the program would have been a good start to a savings account
D.M.
1) Assume a regular consumer has a 30 year fixed mortgage, obtained some time in the past 5 years, with a 5.375% interest rate.
2) Assume this same regular consumer can obtain a 5.375% interest bearing FDIC-insured savings account at a bank.
Here are a couple websites with links to savings account carrying rates as much as 5.25%-5.40%…
https://bank.countrywide.com/CWBRates.aspx?tab=sl
http://www.pickafinance.com/new/search.php?keyword=high_interest_accounts
3) Somebody who is a proponent of these Money Merge Accounts, please explain to me how one is any better off applying their money against a mortgage or money merge account, instead of just having it deposited directly into an interest bearing savings account.
My point is that 5.375% earned is the same as 5.375% saved, especially since the tax consequences are the same. Additionally, by keeping the funds out of your mortgage, that money remains completely liquid. Additionally, you don’t have a ‘line of credit’ on your credit report. Additionally, you have options, as you can use the money that has accumulated in your interest bearing savings account to pay down your mortgage, or just continue to let it compound.
Whether your own money is EARNING you 5.375% interest income (compounding), or SAVING you 5.375% interest expense (compounding), the net difference is $0.
The whole setup explained above could be setup ‘automatically’ with a combination of direct deposits and carefully planned online bill payment plan, offered by almost every bank. So, why would somebody want to pay $3500 for this service?
G.O.
G.O. My mortgage is $384,000 at 6% for 30 yrs. Now I would make as much in interest with a savings account as I was paying on my mortgage if I had $384,000 in cash to make my first deposit!! I don’t have that kind of cash. The MMA gives me the ability to pay down LARGE portions of my principle which saves me a lot of interest. If you really want to understand how it works check out the MMA video presentation at my website http://www.eliminateinterest.com
Thanks, Wes
The one thing I have not seen addressed is your other bills. From what I have seen on these MMA’s is the ability to put all your interest bearing debt into this program. How are the credit cards, second mortgages paid off in this program?
Wes Put all your discretionary income in a savings account for 30 yrs.while paying off your mortgage. Then using the mma, after you pay off your mortgage put all discretionary income plus your mortgage payment into a savings account until the end of 30 yrs. using the same rate of intrest which account will have the most money?
One will never convince everyone that any particular product is better or worth in this case $3500.
Looking into this product one thing makes sense… If you currently have both a first mortgage and a HELOC, some of what is being stated would be worthwhile. Most checking accounts do not earn the amount of interest one pays on their HELOC’s. And HELOC’s interest is based upon the monthly average balance. So if one is to put all income sources into the HELOC, and use it as a checking account, and not spend more than earnings, the interest savings will effectively earn more than a standard checking account.
Now, the product does give you a barometer at all times of what is going on with your mortgage, this is a nice tool, most people would not be inclined to calculate this, they would merrily go on and pay their bills as usual.
Is this product worthy of a $3500 investment? The answer will depend on each persons own circumstances. If one intends to follow the plan, probably, it certainly will pay for it self, and once you own the program its yours, not like a loan that is refinanced every 5 to 7 years. The owner can apply it to all realty purchases.
I’m considering, and so far the nay sayers have not convinced me that I’d be better off without.
‘G Money’ hit the proverbial nail on the head! … Financial analysis is about comparisons of available alternatives, in order to make an informed decision about what is the ‘most prudent’ course of action. Which choice is best? This is what every corporation and financial analyst does on a daily basis when deciding how to spend or where to invest their money.
You must compare apples to apples as closely as you can, and then weight the remainder of the differences to determine your best course. Specifically in this case the comparison to the RISK FREE rate of return earned from FDIC insured deposits http://www.fdic.gov/ , in addition to the alternative of simply pre-paying $3,500 toward your existing mortgage debt!
Don,
Just straight cash with no interest earned figured…If I put all my discretionary money($900.00) into an account while I paid off my 30 yr mortgage I would have saved $324,000. With the use of the MMA having paid my mortgage off in 14 yrs and being able to put my whole mortgage payment into the bank for 16 years I would have accumulated $532,000($2300/mon. mort payment). Thats a huge difference.
I am currently on the MMA program and I am very pleased with the results that it is providing for me. I understood and still understand that I can have similar results by doing it myself, however even though I have known this for a while I never did it. The point that needs to be stressed here is not whether you can do it on your own but WILL you do it on your own. Financial planners and mortgage consultants can lay out the best plan in the world for you but if YOU don’t follow it to the T then it won’t work. The problem here isn’t the cost of the product but the YOU….
I think the point that most people here are missing is that most people in this country do not have the ability to make large lump sum payments to their mortgage. The MMA program provies the ability to these people.
$3500 is not a fee, it’ an investment. To those out there who belive the MMA program to be a scam, please explain to me why the company hasn’t been shut down? Just because it’s an MLM opportunity doesn’t mean it’s a scam. Have any of the nay sayers ever heard of Avon? Oh… Avon is MLM so it must be some sort of scam.
To those who feel they can do it on their own, sure you can try but you won’t save as much as you would by utilizing the MMA program.
Bottom line is that scams don’t save people hundreds of thousands of dollars in interest, do not guarantee performance of their product and do not provide lifetime support.
The MMA program seems to be more of a Money Management Tool. If one uses it as prescribed it will yield the results that are guaranteed.
Other Camps would say that paying off the home is not the way to go, and use the moneys from the home to invest. If you are willing to gamble, MMA may not be for you.
Some people are risk adverse, and would prefer having that loan and debt paid off faster.
The Cumulative effect of Small repetitive monthly pre-payments to principal… will be GREATER than the NET effect from a large lump pre-payment that was borrowed from another higher rate source of debt. Shifting debt from A to B, just to say A is lower is a shell game, especially if B costs you more.
The fastest way to pre-pay debt(s) is to earn the income, deposit it, earn interest, and prudently pre-pay the mortgage/ debts in the most advantageous way possible. That includes things like debt consolidation to reduce the overall “blended” interest rate to achieve the Lowest Interest Cost Possible. The further you deviate from that, the worse the return will be. There is no magic way to change those fundamentals; Debt Balance(s), Overall Rate + Costs, and Income.
Can you generate additional income from your cash accounts?… YES, you can at very least put the cash on deposit where you are being paid interest. There are many ‘risk free’ options paying more than 5% right NOW!
Any method of debt pre-payment that you employ will save money, so long as you are reducing your total indebtedness! Lower debt balance = less interest paid. Beyond that it’s a question of which method of debt reduction is the best and most prudent. Which achieves the best results, which saves the most money, which costs the least?
To make an analysis you need to consider not only what you will save on A, but also the costs paid on B, and the upfront costs, and the monthly or yearly costs, as well as the compounded time vale of all those cost components.
Then you need to compare between the various available alternatives. Principally, compare the lowest risk or “risk free” options to the other more risky alternatives.
If the ‘risk free’ return is GREATER than the other alternative Higher Risk choices… then the most prudent and best method is a clear choice!
If something saves you money, but it actually saves less than other Free alternatives… make no mistake, even though you saved something, it really Cost You More.
Don’t let a sales pitch, or emotional and psychological sales tactics divert you from the facts or from analyzing ALL of the available alternatives on your own. Make sure you are doing what you can to first help yourself… and ask someone whom you know, trust, and can rely on to help you. Always get a second opinion!
All things being equal, the simplest explanation is usually the most correct!
I just learned about the MMA account and seems very interesting to say the least. My wife and I are terrible with money and we live on a tight budget so this sounds like a minimal investment to get things in order. But I am still somewhat skeptical. Although this thread has been extrememly helpful so far. Thanks for all the links and advice.
Anyway, my one question is what if you already have a maxed out HELOC second mortgage? How does that effect my chances of getting into the program, if at all? Do I need to somehow combine my two mortgages first before I can start? My first is an interst only loan also. Any help is much appreciated!
Thanks.
I want to get started in the MMA program for two reasons: 1. I am a small business owner, and from time to time, will experience cashflow problems, and 2. I want to pay off my house faster taking advantage of my so called ‘larger than average’ descretionary income. Does anyone know about the financing options of this?
Adam and Jared,
Have either of you addressed these questions with the agent who introduced you to the program? That should be your first step. Your recruiting agent should be able to help you or direct you to someone locally who can help you.
Good Luck!
whats great about the mma is that it is much more beneficial than just simply adding extra discretionary income to the principal payment of the mortgage. you are subsizing this with time. when you pay in the most beneficial lump to decrease the amount of interest paid, this will pay off the mortgage much faster than simply adding your leftover income to your principal on your mortgage loan. The $3500 fee is greatly offset with the amount of savings incurred and doesn’t come directly out of pocket. it is basically streched throughout the payoff period and utilized immediatly in the program. A simple $35000 in savings will result in a 1000% return on investment and most customers are seeing at least $100,000 to $150,000 minimum in savings. i cant think of one other investment that is pretty much risk free that i can utilize the banks money to get multiple thousands percent return on investment. i think the MMA can help anyone that has a mortgage and can qualify for a HELOC and will change the entire real estate and lending market in the next few years.
I do not know if this program MMA for $3,500 works or not. The one thing that bothers me is the sales pitch for the program. My brother is in it, and the big goal seems to be to get other “agents” under you to, in-turn sell it, and you then get “residuals” up the chain of agents. Sounds like the MLM (pyramid)days of Shaklee and Amway products. I would love for it work, but am skeptical of the money incentives of the agents. I would pay a reasonable price for a software program, but do not want to take a $3,500 chance.
The big issue with the skeptics seems to be the $3,500 activation fee. Since the average homeowner is scheduled to pay-off their home in a time frame of 8-11 years, the activation fee comes out to under $1 a day. The same people that argue that they could “do it themselves” and save $3,500 probably spend $4 a day for a Starbuck’s coffee and eat at least one fast food meal a day at $5+.
The average effective interest rate for an MMA client is 2%. There is not one nay-sayer that if given the opportunity to refinance their existing mortgage to 2% and pay $3,500 in closing costs wouldn’t do it. FYI, only 1 percent of the population is “doing it themselves.”
The MMA program works with 0 or negative discretionary income for all those that make the extra principal payments directly to the bank.
Also, your local Real Estate and Mortgage Broker has agents that they recruited as well. That doesn’t make them an MLM.
One more thing. What difference does it make how much commission an agent makes? You bought a car and someone got paid to sell it. You bought your home and someone got paid to sell it. You got your mortgage and someone got paid to write it.
Do you realize how many millions (or billions) of dollars in advertising is spent to get you to buy everyday products. Did you realize that you pay for it in the cost of the product?
“Douglas” above is factually incorrect, and is also improperly comparing and analyzing financial figures… what’s he trying to sell?
The proper Return On Investment from this schema is NOT calculated based on the total interest that MAY be saved, but rather, from the net advantage (if any) as compared to the true “zero risk” alternative… especially in this case as the same (or superior) results can be accomplished without spending $3,500.
A true and honest comparison yields DRASTICALLY Different analytical results.
For “Ron”:The interest saved projection is based on the comparison of the existing mortgage under the regular amortization schedule.
In every analysis I do for a prospective client, I start with 0 discretionary income in the performa, but compare their stated discretionary with an amortization calculator that computes extra payments. In most cases, with zero discretionary income, the MMA program is comparable to the extra diresct payments. When using their discretionary income in the performa, the MMA is faster than the same payment sent directly to the bank. When we pay off as much debt as possible up front (car, credit cards, etc.) the MMA accelerates the mortgage by several years over direct extra principal payments.
If you think that you can due the same thing without the MMA software, good luck to you. Statistics show that people already don’t do it.
As far as “zero risk,” there is a money back guarantee that the program will work. Most are 20% ahead of the projections.
Ron,
I wonder what your incentive is to dedicate so much space on your mortgage company website to slander equity acceleration products, not to mention the time blogging all over the web with your misinformation. Could it be that you make so much money off of refinancing your clients every 2-5 years. I also noticed your company is in Florida where there is some of the highest defaults coming out of the option-ARMs and NegAms in the nation. I am curious if you would open up your books to show just how many of those you sold in the last few years.
I agree with Bryan. What difference does it make what commission the agents get? A refinance costs a comparable amount as the MMA program and people do it repeatedly. With MMA you can move it with you and are not required to refi. Not to mention the commission the lenders get, or many other professions who are commission only. Insurance, realtors, car sales, etc.
Ron…your website is totally inaccurate! You are obviously trying to sell mortgages yourself and completely not considering what’s best for the client. I’m willing to bet you get paid a commission for your work. How much do you make per sale? If you opened your mind to this concept, you could enhance your business by helping your clients. That would generate referrals and future business for you. Seems you are shooting yourself in the foot by posting such misinformation. Anyone who does their research will find the truth - and your website doesn’t have it.
It seems both “Bryan” and “Shari” may have something to gain/loose by pushing this MMA idea… Interesting?
We’re providing truthful, factual, financial opinions and analysis… and adding another valuable and legitimate point of view to this discussion (as is the very mission of this entire website http://www.thesimpledollar.com)… Self reliance and saving money! There are no strings attached, and the information is FREE to everyone.
If they don’t like it, perhaps it’s because the truth hurts, or threatens them.
So they resort to personal attacks, character assassination, and making baseless speculation to try to disparage us…. INSTEAD of actually discussing the facts, factual comments, and legitimate financial analysis of this mma schema.
What do they, and others, fear from a legitimate and honest discussion of the facts, financial analysis, and the truthful numbers of this matter? Isn’t that what everyone reading this really wants to know about and understand?
Their ‘in the gutter’ comments (and their motivations) only lend more credence to this web blog and to the honest analysis and opinions both myself and many others have regarding these ‘equity accelerator’ schemas, like the mma.
We’re not making this stuff up…
If any homeowner, consumer, real estate professional or accountant is interested in more detailed information and truly analyzing these equity accelerator programs ‘particularly the Money Merge Account’ for themselves… below are some links to information that should shed a lot of light on this particular topic.
1) http://www.integramortgages.com/FinancialVOODOO
(FREE Mortgage Pre-payment calculators, FREE alternatives, details and opinions)
2) http://www.mtgprofessor.com/A%20-%20Early%20Payoff/the_good_fairy_of_rapid_mortgage_payoff_is_back.htm
(detailed information & opinions from the respected Jack M. Guttentag, former Jacob Safra Professor of International Banking at the Wharton School of the University of Pennsylvania & Yahoo Finance Contributing Author)
3) http://activerain.com/blogsview/48018/Money-Merge-Accounts-Are (other honest opinions from a south Florida mortgage planner, even someone selling it agrees it’s NOT the best solution for most 85% of folks.)
4) http://www.danmelson.com/posts/1171373759.shtml
(sales tactics information, analysis, and opinions from an Up-Front California Real Estate & Mortgage Professional)
5) http://forum.brokeroutpost.com/loans/forum/2/95315.htm (a very direct opinion from an attorney specializing in real estate law)
We hope this information educates you, helps you achieve your financial goals, and that it helps YOU save money!
Best wishes to everyone,
Ron,
In case you didn’t notice, I did make factual comments… and you still didn’tanswer the question of what you stand to gain and you didn’t answer the challenge of how many loan products you sold and made money on that weren’t in the best interest of the homeowner.
I also am not promoting my individual business (or any other) or website in this blog as you have. Nor have I made any assertations that the MMA is going to benefit 100% of the population.
Of the 15,000 UFirst agents, over half of them are Mortgage and Real Estate Professionals and Financial Planners.
1/3 of Australian homeowners are on similar programs. 1/4 of British homeowners are as well.
In the U.S., these programs have already saved thousands of homeowners millions of dollars of mortgage interest and have also facilitated better money management skills.
It is interesting all of these people you have links for offering “free” advice. A number one sales lead-in is something for free to offer an “added-value” in order to get a client. All of your “free” helpful advice is nothing more than a sales tactic of your own.
Almost all of the negative comments revolve around agents makingmoney selling the program. What about the statistic that over 2/3 of all Mortgage lenders got into their industry in the last 5 years… I’m sure it’s because they do loans for free!!!
Ron,
First, I am a client, not an agent. I am simply a homeowner who signed up for the program and am excited about what it has done for me!
Second, of the links you have provided above, the only one I would consider worth the time to research is http://activerain.com/blogsview/48018/Money-Merge-Accounts-Are
Third, your website claims the information is free, but one must provide their email address in order to obtain it. So what’s your ulterior motive? Not to mention that you are telling people that these accellerator programs work by sending in all of your discretionary income and that’s simply not true. Nor is it true that by using a heloc as a checking account is only robbing Peter to pay Paul as you also claim. If you have a positive cash flow then you are only funneling your cash a different way. And when you do transfer a lump sum onto your primary mortgage, you still have access to it through your heloc whereas if you send in all of your discretionary income to your primary mortgage, you have lost that cash.
These are the facts and the reasons why I say the information you present on your website are inaccurate. I am not selling anything as I have stated and I don’t see that Bryan is giving links to his website. It seems that you are the one bashing those who are FOR the program and you are also the only one posting links for your personal gain. How mu
My cousin does the bi-monthly payment thing, where you pay your mortgage every two-weeks. He had an initial cost of about 300 and pays a monthly fee, the cost overall is ok. The point is that he is the type of person that ALWAYS succumbs to the human nature effect, where if he has money lying around he will spend it. He is not discipline enough to manually make the extra payment. This system works perfectly for him.
The thing is when I try to recommend this type of system to people that I know cant control their spending they always say, “Why pay when I can do it myself.” These are the very people that will always say, “I’ll save more next month,” but of course they dont, yet they keep repeating how at anytime if they really wanted to, they can pay the mortgage off quicker.
Systems like these, not only minimize the “YOU” factor, it makes everything more organize and simple, because its automatic.
jake @ 2:03 pm March 3rd, 2007 (comment #1)