Posted on: 16th Sep, 2007 09:21 pm
I was wondering if anyone had experience using United First Financial's Money Merge account program. The program is designed to pay the mortgage off more quickly by depositing your paycheck into an equity line of credit account then using the equity line to pay your bills. Is it a ligitimate program? Does it work? Any concerns with using the program? Thanks for your time...
"If I recall correctly - the one spent something like $130 dollars in interest in 3 months and reduced his mortgage interest by over $10,000 by using the principal transfers.
"
So what you are saying is it cost him to transfer his own money. Because the way the program works he has to pay off the 2nd. If he would have sent the same money to the 1st instead of the 2nd he would have saved his $130... and still saved the $10,000. And not to mention the $3500.
"
So what you are saying is it cost him to transfer his own money. Because the way the program works he has to pay off the 2nd. If he would have sent the same money to the 1st instead of the 2nd he would have saved his $130... and still saved the $10,000. And not to mention the $3500.
Eric,
I did not think I was attacking your credibility at all, just disputing your numbers. I am sorry you felt that way as that was not my intention.
You are 100% correct in that they can just make the extra prinicpal payment themselves and achieve the same results.
The interest charge was not soley to transfer his own money - yes, it went to pay the MMA fee (which I think is really high) and the rest of the interest went to pay for the HELOC advances on the princpal payments. Of course, by depositing their own money into the HELOC, they have reduced the amount of interest.
I do not believe this program is the save all for anyone who wants to pay-off early, but it is an option for some. I definitely don't promote it, but would also never tell a client not to do it. I would help them get informed and let them make the choice. Like I said - I don't have the MMA and am not in line for one either - probably not in the near future or ever.
Again, I am very sorry that you felt I attacked your credibility.
I did not think I was attacking your credibility at all, just disputing your numbers. I am sorry you felt that way as that was not my intention.
You are 100% correct in that they can just make the extra prinicpal payment themselves and achieve the same results.
The interest charge was not soley to transfer his own money - yes, it went to pay the MMA fee (which I think is really high) and the rest of the interest went to pay for the HELOC advances on the princpal payments. Of course, by depositing their own money into the HELOC, they have reduced the amount of interest.
I do not believe this program is the save all for anyone who wants to pay-off early, but it is an option for some. I definitely don't promote it, but would also never tell a client not to do it. I would help them get informed and let them make the choice. Like I said - I don't have the MMA and am not in line for one either - probably not in the near future or ever.
Again, I am very sorry that you felt I attacked your credibility.
Eric,
I did just notice that I never specifically told you which numbers I do not agree with - sorry.
It is the $500 dollar payment to the HELOC (P/I pmt) as the people's scenarios I have seen paid no where near $500/mo. They pay interest only payments with their disposable income reducing the HELOCs principal balance. Then, when the balance is low enough, the software prompts another transfer to the first mortgage.
The rest of your numbers are dead on.
I did just notice that I never specifically told you which numbers I do not agree with - sorry.
It is the $500 dollar payment to the HELOC (P/I pmt) as the people's scenarios I have seen paid no where near $500/mo. They pay interest only payments with their disposable income reducing the HELOCs principal balance. Then, when the balance is low enough, the software prompts another transfer to the first mortgage.
The rest of your numbers are dead on.
Michelle,
No problem. You will notice when it comes to these types of posts (specifically with U 1st Financial involved) the only positive responses they get are salespeople, attacking someone like my credibility. And I am here to help anyone who might get suckered in to this scam. I will always respond to any disputes that arise and have all the proof ready to back up my claims.
I do want to clarify though. It doesn't matter what scenario you use. These programs do nothing. It has nothing to do with choice.
"You are 100% correct in that they can just make the extra prinicpal payment themselves and achieve the same results."
Not the same results! Better results! It costs money to use these programs. So I stand by this... these programs are not for anyone. It simply does not work... no matter what anyone says without mathmatical proof... hear say is just that, hear say.
"It is the $500 dollar payment to the HELOC (P/I pmt) as the people's scenarios I have seen paid no where near $500/mo. They pay interest only payments with their disposable income reducing the HELOCs principal balance. Then, when the balance is low enough, the software prompts another transfer to the first mortgage.
"
Again this doesn't make any sense. If you pay interest only payments, you don't pay any to principle... hence "interest only". Are you aware of how principle and interest work? The balance on the heloc (or Aloc... lol ... this company made up that term) either ... A. never goes down OR B. you pay extra interest on the higher rate heloc. You don't cancel interest on the 1st mortgage this way, all you do is pay less interest on the heloc (interest you don't need to pay from the first place).
No problem. You will notice when it comes to these types of posts (specifically with U 1st Financial involved) the only positive responses they get are salespeople, attacking someone like my credibility. And I am here to help anyone who might get suckered in to this scam. I will always respond to any disputes that arise and have all the proof ready to back up my claims.
I do want to clarify though. It doesn't matter what scenario you use. These programs do nothing. It has nothing to do with choice.
"You are 100% correct in that they can just make the extra prinicpal payment themselves and achieve the same results."
Not the same results! Better results! It costs money to use these programs. So I stand by this... these programs are not for anyone. It simply does not work... no matter what anyone says without mathmatical proof... hear say is just that, hear say.
"It is the $500 dollar payment to the HELOC (P/I pmt) as the people's scenarios I have seen paid no where near $500/mo. They pay interest only payments with their disposable income reducing the HELOCs principal balance. Then, when the balance is low enough, the software prompts another transfer to the first mortgage.
"
Again this doesn't make any sense. If you pay interest only payments, you don't pay any to principle... hence "interest only". Are you aware of how principle and interest work? The balance on the heloc (or Aloc... lol ... this company made up that term) either ... A. never goes down OR B. you pay extra interest on the higher rate heloc. You don't cancel interest on the 1st mortgage this way, all you do is pay less interest on the heloc (interest you don't need to pay from the first place).
For the "average Joe" the MMA can work.
Yahoo business posted yesterday that 52% of all Americans have less than $25k saved for retirement and a larger majority of those Americans don't have $10k in non-retirement liquid money.
You don't need the MMA to paydown your mortgage, you can and should do it yourself and end up ahead, but that would mean you are the other 40% of Americans who can do this.
For those Americans who don't have a chunk of cash to send to the first mortgage for principle paydown, the MMA program/method can work.
Scenario (with numbers!)
Ln balance of $350k, at 6.5% 30 yr fixed rate fully amortized.
For simiplicity, if you were to make a $5000.00 payment as your first payment, you would reduce would be saving $28,458.54 in interest and shaving 15 months.
Now lets use our average Joe, who doesn't have that kind of play money laying around, but can pay $416.66 per month toward the mortgage (x 12 mos = $5k). The numbers are different. You save $27,521.84 in interest and shave off 14 months.
That's $936.70 savings with the lump sum vs installments.
To optimize, Joe would take an advance off his HELOC for the $5k, and than payback the HELOC in installments with principle and interest.
If Joe deposited $5300.00 into his HELOC, and wrote $4833.00 in checks from the HELOC monthly,he would have an interest expense of $150-$200 covering the 12 months depending on how Joe handles his average daily balance. There will be some months where the outgo is lower or higher. It's an average.
Subtract the interest expense, and you still save around $750.00 which is an additional 15% more than if Joe just sent the money over himself monthly instead of using the HELOC lump sum paydown.
I wasn't sure of my math or even the MMA idea itself so I had a business math professor do the numbers. There are websites out there that will do the same.
I've also read posters say they've ran it thru Excel yada yada. If you don't run a separate Excel program to figure the average daily balance your numbers will be off.
The program is pricey at $3500, but it isn't any different than a rate and term refi. It will take several years to pay for the program cost, but so does a refi to warrant paying its costs.
Joe won't payoff his mortgage in 10 yrs as MMA says, you would have to have more disposable income to do that.
Would I pay for this program? No because I don't want to lose my tax deduction.
But todays American Way is I want it now and I want someone else to do it for me. $6 lattes/fraps 5 days a week when your coffee maker at home works perfectly fine, $15.00 car washes, when you or your kid can do it, mowing your own lawn.....etc.
These are the people who need this program. I am amazed today at how many people are so leveraged to the hilt, but won't give up their Starbucks and BMW's. I get these borrowers constantly. You coach them a bit and do their cash out refi debt consol, but they have no financial dashboard and you see them again in a few years to do another debt consol.
By saying "it's simple just do this or just do that" doesn't work for these people. They need guidance, a watchdog or something.
The MMA will force them to question their spending habits, and give them the arbitrage advantage of leveraging ave daily balance HELOC against the compounding 1st mortgage.
Again, it's pricey. I wouldn't buy it because I don't need it but there are people out there who could use it, because they're not going to spend the time on the a.d.b. spreadsheets, they will want someone else, the program, to do it for them.
Yahoo business posted yesterday that 52% of all Americans have less than $25k saved for retirement and a larger majority of those Americans don't have $10k in non-retirement liquid money.
You don't need the MMA to paydown your mortgage, you can and should do it yourself and end up ahead, but that would mean you are the other 40% of Americans who can do this.
For those Americans who don't have a chunk of cash to send to the first mortgage for principle paydown, the MMA program/method can work.
Scenario (with numbers!)
Ln balance of $350k, at 6.5% 30 yr fixed rate fully amortized.
For simiplicity, if you were to make a $5000.00 payment as your first payment, you would reduce would be saving $28,458.54 in interest and shaving 15 months.
Now lets use our average Joe, who doesn't have that kind of play money laying around, but can pay $416.66 per month toward the mortgage (x 12 mos = $5k). The numbers are different. You save $27,521.84 in interest and shave off 14 months.
That's $936.70 savings with the lump sum vs installments.
To optimize, Joe would take an advance off his HELOC for the $5k, and than payback the HELOC in installments with principle and interest.
If Joe deposited $5300.00 into his HELOC, and wrote $4833.00 in checks from the HELOC monthly,he would have an interest expense of $150-$200 covering the 12 months depending on how Joe handles his average daily balance. There will be some months where the outgo is lower or higher. It's an average.
Subtract the interest expense, and you still save around $750.00 which is an additional 15% more than if Joe just sent the money over himself monthly instead of using the HELOC lump sum paydown.
I wasn't sure of my math or even the MMA idea itself so I had a business math professor do the numbers. There are websites out there that will do the same.
I've also read posters say they've ran it thru Excel yada yada. If you don't run a separate Excel program to figure the average daily balance your numbers will be off.
The program is pricey at $3500, but it isn't any different than a rate and term refi. It will take several years to pay for the program cost, but so does a refi to warrant paying its costs.
Joe won't payoff his mortgage in 10 yrs as MMA says, you would have to have more disposable income to do that.
Would I pay for this program? No because I don't want to lose my tax deduction.
But todays American Way is I want it now and I want someone else to do it for me. $6 lattes/fraps 5 days a week when your coffee maker at home works perfectly fine, $15.00 car washes, when you or your kid can do it, mowing your own lawn.....etc.
These are the people who need this program. I am amazed today at how many people are so leveraged to the hilt, but won't give up their Starbucks and BMW's. I get these borrowers constantly. You coach them a bit and do their cash out refi debt consol, but they have no financial dashboard and you see them again in a few years to do another debt consol.
By saying "it's simple just do this or just do that" doesn't work for these people. They need guidance, a watchdog or something.
The MMA will force them to question their spending habits, and give them the arbitrage advantage of leveraging ave daily balance HELOC against the compounding 1st mortgage.
Again, it's pricey. I wouldn't buy it because I don't need it but there are people out there who could use it, because they're not going to spend the time on the a.d.b. spreadsheets, they will want someone else, the program, to do it for them.
Hello Kevin,
I disagree as usual. The MMA costs money over the long run. That has been the figures I have seen. I have yet to see any scenario work better than paying directly with your own money, from your own checking account. It does not save money because of an average daily balance it actually ends up costing more.
Please reference the post at http://www.mortgagefit.com/know-how/homeownership-accelerator-3.html
to see and example comparing the differences on an ongoing basis.
It is as simple as using any extra money to pay towards your mortgage. If you don't have "extra" money, the MMA not only costs more but it won't work either. And I am not talking about up front money, I am talking about extra money acquired throughout the payoff time.
Let me know if you have any questions.
I disagree as usual. The MMA costs money over the long run. That has been the figures I have seen. I have yet to see any scenario work better than paying directly with your own money, from your own checking account. It does not save money because of an average daily balance it actually ends up costing more.
Please reference the post at http://www.mortgagefit.com/know-how/homeownership-accelerator-3.html
to see and example comparing the differences on an ongoing basis.
It is as simple as using any extra money to pay towards your mortgage. If you don't have "extra" money, the MMA not only costs more but it won't work either. And I am not talking about up front money, I am talking about extra money acquired throughout the payoff time.
Let me know if you have any questions.
I saw the presentation on the MMA and I understood that you are accelerating paying off your mortgage by paying extra toward the principle. I also understand some people need a plan to do this I don't think MMA is the only option. Eric what do you reccommend to someone that wants to pay off consumer debt and may or may not want to pay off mortgage. Do you recommend a program that does not require a HELOC.
Beatriss
"Lbntravel@sbcglobal.net"
[Email address deactivated as per forum rules. Thanks.]
Beatriss
"Lbntravel@sbcglobal.net"
[Email address deactivated as per forum rules. Thanks.]
I don't recommend any program. I recommend being an adult and managing your money with a plain old checking account. If you have extra and you choose to pay your mortgage off sooner, then do so simply BY WRITING A CHECK AND SENDING IT TO PAY DOWN THE MORTGAGE with your normal payment.
I just don't get the run around bit. There really is nothing complicated about it.
Beatris, if you want to pay off debt, what do you need a program for? You just pay it off. It's that easy.
I just don't get the run around bit. There really is nothing complicated about it.
Beatris, if you want to pay off debt, what do you need a program for? You just pay it off. It's that easy.
"www.homeownerhsipaccelerator.net"
Prime clients are 65%LTV refis, good credit, good disposable income. No software purchase required, no prepayment penalty, can buy down the margin to 0.75% over the 1-yr LIBOR (so closing costs can be quite high, not unlike an FHA with its upfront MI payment).
The lender suggests that you will never need another loan, because you can -- if needed -- access your equity routinely. Otherwise, monthly deposits (including rental property income, etc.) can work away at the principal balance. Essentially, the monthly payments reduce with time.
All mortgage products have a target base -- this one has had good success in other countries, and it is starting to make sense now with the lower LIBOR.
[Link deactivated as per forum rules. Thanks.]
Prime clients are 65%LTV refis, good credit, good disposable income. No software purchase required, no prepayment penalty, can buy down the margin to 0.75% over the 1-yr LIBOR (so closing costs can be quite high, not unlike an FHA with its upfront MI payment).
The lender suggests that you will never need another loan, because you can -- if needed -- access your equity routinely. Otherwise, monthly deposits (including rental property income, etc.) can work away at the principal balance. Essentially, the monthly payments reduce with time.
All mortgage products have a target base -- this one has had good success in other countries, and it is starting to make sense now with the lower LIBOR.
[Link deactivated as per forum rules. Thanks.]
They are great because you can submit a Free secure MMA Analysis. At the bottom there are video links for explanations on the product.
FOR SKEPTICS:
On the cover of theese magazines:
Broker Banker Magazine
Mortgage Planner Magazine
This months True Wealth Magazine
Also...
D&B highest rating they give
U1st MMA on the news
Click here for location of this quote: "As an experienced mortgage originator and Founder/Publisher of Broker Banker Magazine, I've come across every imaginable product designed to help mortgage originators generate more business. Some have been great, most have not. I have never personally and/or publicly endorsed any product. However, I'm endorsing this one. It's the Real Deal."
Brian Topor, Executive Publisher of Broker Banker Magazine
There's more for the stubborn ones :-)
I will be happy to provide the links for these.
FOR SKEPTICS:
On the cover of theese magazines:
Broker Banker Magazine
Mortgage Planner Magazine
This months True Wealth Magazine
Also...
D&B highest rating they give
U1st MMA on the news
Click here for location of this quote: "As an experienced mortgage originator and Founder/Publisher of Broker Banker Magazine, I've come across every imaginable product designed to help mortgage originators generate more business. Some have been great, most have not. I have never personally and/or publicly endorsed any product. However, I'm endorsing this one. It's the Real Deal."
Brian Topor, Executive Publisher of Broker Banker Magazine
There's more for the stubborn ones :-)
I will be happy to provide the links for these.
Stubborn?
Do you guys even read the rest of the posts?
Prove your point... oh, thats right... you don't have one. All you can do is quote mindless rhetoric... instead of proving anything. The facts and figures can be found by reading above for anyone interested.
These programs don't work... PERIOD.
Even after I say you are coming... you still show up and post the same advertising pitches the company uses.
None of those magazines are real magazines. It does not make something true just because it is in print.
Let me ask you something... if I made a magazine and called it "Mortgage Professional Quarterly" ... sounds professional, doesn't it? ... and then posted that you could save money by getting a higher rate than you have now would you believe me? Absolutely not and that is why you shouldn't believe these programs. They have no proof... so without proof there is nothing to believe.
Do you guys even read the rest of the posts?
Prove your point... oh, thats right... you don't have one. All you can do is quote mindless rhetoric... instead of proving anything. The facts and figures can be found by reading above for anyone interested.
These programs don't work... PERIOD.
Even after I say you are coming... you still show up and post the same advertising pitches the company uses.
None of those magazines are real magazines. It does not make something true just because it is in print.
Let me ask you something... if I made a magazine and called it "Mortgage Professional Quarterly" ... sounds professional, doesn't it? ... and then posted that you could save money by getting a higher rate than you have now would you believe me? Absolutely not and that is why you shouldn't believe these programs. They have no proof... so without proof there is nothing to believe.
If you are serious about not just paying off your mortgage but all your bills, this is the best program out their. I have been doing it for a month and payed off all my debt except my mortgage and the initial Heloc. I borrowed $65000 to pay off all my debt and by following the mma program haven't paid a cent in interest and am lowering my Heloc and will then start working on the principal on my mortgage. Everything will be paid off in 5.6 years. I had 24 years left on my mortgage if this program didn't come along. I definetly would recommend this to anyone who wants to be debt free!!!
You have no idea what you are talking about!
Ahhh...the real world responds! It's like a breath of fresh air!
Howie -- You'd do this Community a great service if you were to stay in touch. Tell us more about your experience with your financing as time goes along -- you mention that you've had the product for 1-month. Dude, that's not too long! I am glad that you are happy with your choice of mortgages, though -- please check back in with us. GOOD LUCK!!