UFF's $3500 up-front fee is ridiculous. In fact, it is unlikely that salary float through a HELOC is smarter than salary float through a high yield savings (HYS) account. That said, here is the FW way to set up and use the money merge account, for free:

1. Find and set up the best HELOC you can. Look here.
2. Direct deposit your salary into the HELOC
3. Pay-down your highest interest rate debt with a one-time transfer from the HELOC with an amount equal to one month's salary. Do this around the time your salary deposit arrives into the HELOC.
4. Pay your bills from the HELOC, as close to the due date as possible, BUT DO NOT cut it so close you are hit with late fees.
5. Any HELOC balances above 0 on your salary deposit day are either salary you did not spend (good for you !), or the couple of dollars this scheme is netting you. Invest the positive balance wisely, or send it to high interest rate debt for faster pay-off.
6. Want to know how you are doing ? Use this calculator.

Before you go through the hassle, realize that a $3000 salary will net you about $5 a month, a $6000 salary about $10 a month, etc based on a 6% home loan and 8% HELOC. If instead you put your salary into a HY checking or deposit account (3% as of March 2008), you will make about $4 a month with a $3000 paycheck, or $8 a month with a $6000 paycheck.

FW threads
one, two.
archived threads three, four, five.

External Links:
Money Merge Accounts: Good Fairy or Demon?
Money Merge Accounts: Are They A Good Deal For Home Borrowers?

[EricGo07]
=================================

And, for this program that "originated in Australia" - the news is not good - it is under investigation by law enforcement and securities organizations for false, deceptive and misleading business practices

Oops Mortgage Accelerator under fire; Australian Securities and Investments Commission taking action against mortgage brokers.

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US promoters are correct to say that this program was sold in Australia before it was “discovered” by US borrowers. However consumer organisations such as ours, and our national financial services regulator - Australian Securities and Investments Commission (ASIC) - concluded years ago that there were no savings to be made, and that promoters were engaged in unlawful conduct. Examples and charts showing massive savings have all been shown to include significant increases in payments being made to the mortgage (in addition to the funds deposited temporarily). Any savings made by depositing regular salary into the LOC amount to possibly a few hundred dollars per year, and unless the borrower has significant funds to deposit, these savings are less than the additional interest paid on the LOC - even if the LOC is quite small (say $50,000). Borrowers who pay any money for software, monitoring or other services, are often thousands of dollars worse off.

I don’t personally know anyone who has used a LOC in this way, apart from consumers who come to our agency for assistance.

Our regulator ASIC says, on its website:

“in reality there is no magic trick or secret type of loan that will let you own your home sooner. Substantial savings are only achieved by consistently making additional payments on your mortgage. You therefore need to be very careful when brokers claim that you can own your home sooner and make substantial savings by using a line of credit mortgage facility.”

ASIC has taken action against mortgage brokers promoting this type of product, as well as companies providing calculators to consumers and brokers. This action has resulted in:

* The withdrawal of a LOC Calculator that was on over 100 websites;
* Changes being made to a “Simulator” Calculator
* Court orders (by consent) against a company promoting “mortgage reduction”, including orders that the company write to past customers advising they may have a right to claim loss or damage caused by misleading and deceptive conduct.

The misleading and deceptive conduct included showing clients comparisons between loans arranged by the company and standard loans, that represented that by switching loans they would save money and pay off their home loan sooner but failed to adequately explain that to obtain this benefit clients would need to make extra repayments.

Despite the action from the regulators above, there is still some promotion of this type of scheme, but much less than in the US.

---

---

No credit for misleading loan calculators
We acted to close down loan calculators on more than 100 websites of Australian financial institutions, including banks, credit unions, other lenders and finance brokers. The calculators suggested that using a line of credit will result in the consumer paying off their home loan more quickly.

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7-95 ASIC obtains injunctions against loan calculator operator

Thursday 12 April 2007


ASIC has obtained orders in the Supreme Court of Queensland today against Gold Coast company, Etracka Pty Ltd (Etracka), following concerns over a loan calculator licensed to mortgage brokers throughout Australia.

These orders follow allegations by ASIC that the information provided by the company’s Express Simulator calculator was false, misleading or deceptive or likely to mislead or deceive.

The Express Simulator is currently accessible to members of the general public via a number of mortgage brokers' websites. It is also accessible via a website operated and controlled by Etracka located at www.etracka.com

The Court ordered that Etracka add a warning to Steps 1 and 4 of the Express Simulator, and to the Simulation Express Report which is subsequently emailed to the user of the calculator. This warning will now advise users that if they have not elected to make an additional monthly repayment into the Non-transactional Loan (which is as high as reasonably possible having regard to the user’s financial circumstances and the terms and conditions of their loan), the calculator will not provide a reliable comparison between a Non-transactional Loan and a Transactional Loan used in accordance with the eTracka Strategy.

The Court also ordered that Etracka send corrective notices to its members, clients, and licensees, and users of the Express Simulator calculator within seven days.

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talljay said:

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Do you want to keep this solely focused on these "offset accounts", limit it to any plans that pay off your mortgage sooner (like bi-weekly or just paying extra principal at times) or open it up for the whole gamut (e.g. if two of the main reasons to buy a house are the leverage and that the interest is deductible, why would you deliberately work against these)?

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Guys don't get rich having debt.

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People here are so short-sighted and self righteous.

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While there are many companies pushing a pay for home ownership acceleration program, there are some (Wells Fargo) that do not charge you anything to do bi-weekly payments.

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lostdude said:

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People here are so short-sighted and self righteous.

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Mike, what's the point of your post? What does your view of this forum has ANYTHING WHAT SO EVER to do with the OP or Talljay's post? Why crap a good thread to show you are not one of us "little people"?

Of course debt is not desirable but not all debt are the same.

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While there are many companies pushing a pay for home ownership acceleration program, there are some (Wells Fargo) that do not charge you anything to do bi-weekly payments.

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Talljay is talking about those who charge fee for such program but that topic is covered already in the FAQ #5

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umcsom said:

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Don't feed the trolls

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mikef07 said:

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To some, any debt puts a ton of pressure on them so in that sense all debt is the same.

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mikef07 said:

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He also stated that "...(like bi-weekly or just paying extra principal at times) or open it up for the whole gamut (e.g. if two of the main reasons to buy a house are the leverage and that the interest is deductible, why would you deliberately work against these)?" which shows that he is thinking that biweekly payments are bad as well.

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rigor said:

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can someone good at math show me some numbers (120K household salary - average two person):
6% APR 15 year conforming mortgage say 300K - pretty average - extra $500/month paid towards principal
or
6% APR Savings $500/month

which yields better?

Please factor in income tax benefits/results. I suck at the whole amortization/interest/tax part of this.

I think thats why people think the HOA are good, its hard to calculate to the penny which yields best.

I guess i could find a calculator to do the amortization schedule with +500 principal versus the normal payments? but those don't consider income tax deductions? or do they?

Then the 6% APR Savings i guess there's a calculator for that but how does the IRS factor into it over the years?

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EricGo07 said:

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Simplest is to simply send the mortgage payment in earlier in the cycle.

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EricGo07 said:

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Berlins, thanks for the clarification. I wondered about this after I wrote the post. I don't think it has anything to due with simple vs compound rates though --

Would you mind writing the exact language from your contract that supports your conclusion ?

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EricGo07 said:

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Saving pennies by sending in a mortgage payment early may be a ymmv item. I have a HEL with PenFed that says:

"I will pay interest at a yearly rate as set forth above. Interest will be charged on that part of principal which has not been paid."

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EricGo07 said:

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Anyway, back to topic: Since a HEL can be simple interest, pay ahead delays payments, and the interest rate is often (at least in PenFed's case) the same as a standard mortgage, perhaps it should be used as the offset account rather than a HELOC ?

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mikef07 said:

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umcsom said:

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Don't feed the trolls

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Ahh I am a troll because I answered a question a guy had. I love how jealous you are. Anything I try and say you shoot down.

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berlinsmommy said:

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Basically, the simple interest vs. amortized interest is one of the arguements people use for these MMAs and if one were to actually get a HELOC for an interest rate equal to or better than their current mortgage interest rate, the idea behind this product would be a valid one (but it still doesn't justify the purchase of the software when a simple Excel spreadsheet can do the same thing).

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neilruby said:

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MMA Month 1
$3500 MMA one-time upfront fee which comes straight out of the equity line of credit. The client then uses the HELOC as their primary checking account. They write checks for their $4000 in living expense every month. So they have now used $7500 of their $60000 HELOC. They then deposit their paycheck into the HELOC ($5000) to adjust their daily balance down to $2500. So the bank is now only charging interest on $2500. The bank was expecting a payment of $20.83 (based on a 10% interest rate) but instead received the paycheck deposit of $5000. This reduces interest greatly. The client also pays no interest on the $4000 they used for their living expenses since they made the $5000 deposit. So the HELOC is the Interest Cancellation Account when used as a checking account. In some cases the interest that ends up being paid on the HELOC or a portion of it is tax deductible as well. So the total owed at months end in the HELOC is $2500 plus the interest of $20.83. $2520.83

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neilruby said:

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Control your money so it doesn�t control you
Get your money to work for you instead of working for the bank

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jgd51 said:

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It is very clear that NO ONE person on this forum has bothered to
truly investigate the MMA!

Shame on you all!

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jgd51 said:

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All these people here jumping to conclusions about wether an MMA/ALOC is a scam...
Here's a quote I think we all need to ponder:

"There is a principle which is a bar against all information,
which is proof against all arguments and which cannot fail to
keep a man in everlasting ignorance --
That principle is contempt prior to investigation."

-- Herber Spencer

It is very clear that NO ONE person on this forum has bothered to
truly investigate the MMA!

Shame on you all!

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jgd51 said:

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You are right, the math does not lie. And if you work the numbers
from the UFF soft ware, it all makes sense. Have you gone that far?

Consider this, the MMA is growing exponentially every month here in the US.

And from what I can see, it ain't about to get shut down.

If it was a scam it would have been stopped in it's tracks in Europe and Austrailia over 15 years ago.

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jgd51 said:

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You are right, the math does not lie. And if you work the numbers
from the UFF soft ware, it all makes sense. Have you gone that far?

Consider this, the MMA is growing exponentially every month here in the US.

And from what I can see, it ain't about to get shut down.

If it was a scam it would have been stopped in it's tracks in Europe and Austrailia over 15 years ago.

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lostdude said:

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jgd51 said:

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You are right, the math does not lie. And if you work the numbers
from the UFF soft ware, it all makes sense. Have you gone that far?

Consider this, the MMA is growing exponentially every month here in the US.

And from what I can see, it ain't about to get shut down.

If it was a scam it would have been stopped in it's tracks in Europe and Austrailia over 15 years ago.

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Learn to read, no one is saying MMA is a scam. But the outfits that pushs "special" software and setup fees are scam.

Just like there are mortgage scammer, HYIP scammer, etc... If you bothered to read the past threads links, MMA were very well received back when the interest rate made sense for doing MMA.

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jgd51 said:

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You are right, the math does not lie. And if you work the numbers
from the UFF soft ware, it all makes sense. Have you gone that far?

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ThirdJoker said:

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jgd51 said:

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Finally, comparing MMA to "Europe and Australia" isn't really fair. The part of the MMA that people are referring to as a "scam" is the $3500 software, not the concept of "interest cancellation".

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Is $3,500 really a lot of money?

If someone buys into a program that will save them tens of thousands of dollars and more worth it?

If it changes the way people in America think about managing their money for the better, is that worth $3,500?

As a loan officer, I see more and more people refinancing just to consolidate debt!

Our economy is fueled by credit cards! All I need to do is review over 80% of my cases the last year.

So, is $3,500 too much?

It's worth what someone will pay.

And right now, LOTS of people are getting on board faster than I can process their applications.

I don't know if anyone has had a chance to actually see the LOOOONG version of how the software works, so I will post it here.

Go ahead folks, take your shots!
http://www.u1stfinancial.com/portals/0/media/mma100.html

NOTE: this link in no way promotes my business. It merely explains how MMA works.
So, hopefully this is not in violation of Fat Wallet TOC.

As far as I am concerned, I'm helping a lot of people and making a very decent living.

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drosengarden said:

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However - here's what the payoff statistics look like when run through a calculator using the feature of a HELOC (open loan, average daily balance interest calculations, and deposits are considered the monthly payment due, check writing/debit card/online bill pay, etc.)

My friend will be out of debt in 7.3 years and paid a total $25,370.42 in interest.

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drosengarden said:

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Mr. Joker,

You are incorrect in your assumptions that the software isn't sophisticated and not truly necessary. You liken the software to "rubber chickens" and state the likes that if I wake up one morning and because now I have a rubber chicken that I purchased that made me realized I have to work out to be healthy - I then work out because I spent my money on that rubber chicken.

I would like to ask you to tell me how exactly I would know when and how much I would have to pay towards my first mortgage out of my available balance of my HELOC in order to get the MAXIMUM possible debt reduction in terms of time and interest saved? This software, sir, is no rubber chicken. It's a necessary calculator. One cannot calculate this on his or her own without the calculator - and if you are gifted enough to do so - then you'd be 1% of the population I am sure.

Save us all the $3500 and tell us - I'll be grateful for life and so will my clients. How do I know how much and when to take out of my HELOC and put it towards my first mortgage to maximize pay off time and interst saved? And then tell me how I adjust knowing how much and when to pay if I need to buy a new car, or take a vacation, or pay for a financial or medical emergency, etc?

Again - I apologize for coming off too sarcastic if I have - but I will gladly eat crow if you will save me and my clients the $3500 with the "non-magic formula" (as you say) to do this same thing of paying of the mortgage early.

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drosengarden said:

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i'll gladly eat crow if you can show me a system that will direct my clients how to do this for free or less money

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drosengarden said:

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My friend will be out of debt in 7.3 years and paid a total $25,370.42 in interest.


Be careful people - many are going to wake up with major egg on their face after having been proven wrong - and it's not going to be me. I have a successful mortgage practice and I will be putting all of my clients on this program

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here you go - actual figures

1st mtg is 93000 5.625 fixed.
student loan 8000 6,8 fixed 10 years
student loan 7000 4,5 fixed 10 years

new heloc 18500 9 variable

net take home 4200/mo
discretionary income 815/mo

There you have it sir. no 25000 monthly income asyou suggest.

typed from my mobile pocket pc sorry for the grammar.

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drosengarden said:

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algorithm in your head? no you can't! you are a liar a phony and a fraud. and add in that you said that you could do it after sitting down and watching the software for awhile. how long? until the debt was paid off at the accelerated rate? I guess then you wouldn't need the algorithm any more then, right? you admit you would need the software and this to do a thing you could not do and use regularly in your head without error. why would you try to mislead like this and outright lie? I asked to prove it and you just blankly state that you could do it with no proof. if math is math and there's no magic here - whixh I agree it's just math - then put the puppy down right here on this forum. i'll give it to my super geeks and they'll make the software for me and i'll give it out free with every heloc that is opened with me.

oh! and explain to me this tax benefit thing - for the common man - wheb does it benefit me to spen 1 dollar just to get 33 cents back? and I know - wheb I have a return that would make me more than the 67 cents I spent to get that 33 cents in a investment account. but why wouldn't I just want to get out of debt 1st for peace of mind and then play at that game wheb the first goal is accomplished successfully. again - for 99 precent of my clients - this would not make sense and the much rather be out of debt and own everything out rigth.

so forget the investment and tax returns. tell me where I can get over 502 precent return on my principle paid without changing my spending habits! and that return already takes into consideration the 3500 spent out of equity!!!

i'm waiting for valid responses to prove me wrong with facts - not blundering. and no! i'm not joking. i'll gladly eat crow if you can show me a system that will direct my clients how to do this for free or less money - and not using your so called 1 percent of the gifted world who can do it in your head! yeah right!

typed from my mobile-sorry about grammar

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Glitch99 said:

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drosengarden said:

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i'll gladly eat crow if you can show me a system that will direct my clients how to do this for free or less money

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A pencil and paper will do the trick (and a calculator if you cant add in your head). Write down the days you will make money and how much, and the days you pay bill and how much, merge the two lists by date, and figure a running balance. When your running balance doesnt drop below $100 after a given day, then you can afford to pay an extra $100 on that day.

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jgd51 said:

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Consider this, the MMA is growing exponentially every month here in the US.

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VirginiaBob said:

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I make money biweekly, $1700 each check, my bills are all due on the 15th of the month and that is when they are electronically debited, and around $2000 total. All additional money goes directly to my stock account earning an average of 9% per year historically. I keep very little extra money sitting idle in my checking account, an average of $500.

So now me how my money paying off my 5.5% mortgage is better than my money now currently earning an average of 9%. Heck, just he $3500 alone pays off a third of my mortgage over the life of the loan.

I want detailed month by month tables which I know you will not provide since this is a scam anyways. It's up to you to prove to me it is not a scam. It's not up to me to accept it as blind faith and pay the $3500. Detailed monthly tables please including my investments at 9%.

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drosengarden said:

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....I am a mortgage broker with my own branch....
But that's why I posted here - as I said - I would gladly eat crow. Mmmm...tasty! Let me put it this way - I would consider myself a fruad, fake, phony, and liar if I didn't post this now that I "saw the light." (And still kicking myself for being so stupid.)

Anyway - see the other post (should be right after this) I am copying the e-mail that I sent to me UFF-MMA upline agent. If you're interested in replies - I'll put them up.

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kamalktk said:

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drosengarden said:

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....I am a mortgage broker with my own branch....
But that's why I posted here - as I said - I would gladly eat crow. Mmmm...tasty! Let me put it this way - I would consider myself a fruad, fake, phony, and liar if I didn't post this now that I "saw the light." (And still kicking myself for being so stupid.)

Anyway - see the other post (should be right after this) I am copying the e-mail that I sent to me UFF-MMA upline agent. If you're interested in replies - I'll put them up.

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Are you going to call back the people you've sold MMA to and get them into better loans?

I'd be interested in the upline agents reply. It should be funny

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drosengarden said:

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Mr. Suck,

The problem a lot of times with these forums and issues of "hot debate" is that people don't take time to realize that other people might not exactly understand the concept completely. More patience should be shown in helping others to understand if you have hardcore evidence and facts (not hearsay) to the contrary. Some people, however, just feel that others of less understanding don't deserve any treatment other than berating. With that being said - if my tone was berating then I suppose that I deserve your breatement. Let it be clear, however, that regardless of how my tone was interpreted through the written word - my 100% intention was to prove wrong OR be proven wrong. I did have a presupposition coming in to this forum (obviously) but it was not with the intention of holding to it should the presupposition prove fatal.

In fact - as I promised I would - I am eating crow. And very much thanks to your reply using simple numbers and actual method concept. The truth be told is that I feel stupid for not running my calculator in the manner you have proposed before spouting off - but I didn't and therefore thought I saw a new business opportunity for my existing mortgage business.

With all that being said - he is a copy of the e-mail that I just sent to my UFF upline:
--------------------------------
Bad news Mercedez...

I've been sniffing around the Internet and forums, etc. about paying off mortgages early. I am in deep research to find if my clients and friends would be able to find any tools that are cheaper priced or better yet free vs. the MMA software.

Well - in one particular discussion - a gentleman pointed out the easy and the obvious. The friend I did the analysis for - he has $815/month discretionary income. Using the MMA tool and including the the $3,500 software fee - my friend would be debt free in 7.3 years with just over $25,000 interest paid.

However - using the most simple concept of paying the extra $815/month into his all his debts in the most dollar wise fashion - and then continue to roll down every month on a regular basis - my debt rolldown software shows that he will be debt free in 7.0 years and spend just a little over $22,000 interest paid.

Where does the extra time and extra interest come from? Well - it would be the fact that my friend would have borrowed $3,500 on the software and converted lower interest rate student loans into a higher interest rate HELOC.

I hate to say this - but the MMA is nothing but a bunch of smoke and mirrors covering nothing more than the good old fashioned frugal principle of making extra payments to your mortgage every month.

Granted - this whole interaction has shown me a more powerful use of the HELOC. Instead of leaving discretionary in the checking/savings - dump ALL left over cash in your mortgage. BUT MAKE SURE you have a HELOC because if you ever needed to get that cash quickly in the event of an emergency, crisis, or other quick need - you would need to pull that money (equity) back out. Hence the ONLY need for the HELOC. (Now other people would say to invest the discretionay in an account that was earning at LEAST more than the after tax adjusted rate of interest on the money borrowed in your mortgage - this would earn you more principle and "pay off" everything much more quickly - but for practical purposes and considering some people are afraid or don't know where to turn for investing - paying off the house in quickest fashion is at least a guaranteed thing.)

I'll be open to other scenarios that you could let me run on both my MMA login and my personal debt roll-down software. I'd like to see if you still believe the MMA would work better than just extra principle payments - then I need to see the numbers for myself by running them myself. But I don't believe this is going to be the case. It would appear there are no true algorithms of any type of ultra-sophisticated means. Just the simple concept of paying extra principle every month.

Please let me know - and I hope your family situation is doing better.

Sincerely,

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drosengarden said:

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Granted - this whole interaction has shown me a more powerful use of the HELOC. Instead of leaving discretionary in the checking/savings - dump ALL left over cash in your mortgage.

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drosengarden said:

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Why - with my personal info in there I get booted or something? Maybe I should read that pop up window before pressing ok.

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MVP9596 said:

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My apologies for the accidental deletion that led to all of the ugly red text. Please return to your regularly scheduled programming.

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drosengarden said:

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Granted - this whole interaction has shown me a more powerful use of the HELOC. Instead of leaving discretionary in the checking/savings - dump ALL left over cash in your mortgage. BUT MAKE SURE you have a HELOC because if you ever needed to get that cash quickly in the event of an emergency, crisis, or other quick need - you would need to pull that money (equity) back out. Hence the ONLY need for the HELOC.

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jgd51 said:

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Here are two links from my personal web site:

...

Thank you for taking the challenge!

Warmly,

JGD

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dcwilbur said:

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drosengarden said:

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Granted - this whole interaction has shown me a more powerful use of the HELOC. Instead of leaving discretionary in the checking/savings - dump ALL left over cash in your mortgage. BUT MAKE SURE you have a HELOC because if you ever needed to get that cash quickly in the event of an emergency, crisis, or other quick need - you would need to pull that money (equity) back out. Hence the ONLY need for the HELOC.

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You've still got this wrong. If you put ALL "left over" cash in your good ol' thirty year fixed rate mortgage and then count on using your HELOC when you need the money, you are going to be in a real mess when the rate on your variable HELOC has risen up to 8, 9, 10% or more and your partially paid off first mortgage was only in the 5 to 6% range. The only way the rapid payoff would work is if you already had a big HELOC balance or you were willing to expose yourself to the interest rate risk by moving your entire mortgage to a HELOC arrangement.

I STILL think paying off the house is a bad idea.

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mikef07 said:

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no one ever got rich by not paying off their house

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mikef07 said:

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While I don't neccesarily agree with a pay program no one ever got rich by not paying off their house or better said having a house payment.. Personally I would love to not have a house payment. Less stress, less risk, more money going to me.

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I generally get the concept of amortized vs simple interest and leveraging float, etc. I also understand that the software automatically calculates what you would save and the time to payoff, etc.

My questions:
1. Is it possible to setup your mortgage the same way (MMA, HELOC, etc.) and do the exact same steps without the software?

2. If it is, wouldn't the lenders charge you the same interest if you did the exact same thing regardless of whether you have the software or not?

My point is if I do the exact same thing, I don't need a software to tell me exactly when I will pay off my mortgage. The lender should tell me when to stop and won't accept any more money from me just because I didn't have the software to tell me that I'm already paid off.

drosengarden said:

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Mr Monky,
Finally - the software - this can not be done with out the software. For several reasons:

First - To calculate the timing of this mortgage "acceleration" considering the factors of closed interest, open interest, forecasted costs, etc., etc - would be impossible to do without the sophisticated calculator. (If you believe that you can do it SIMPLY for the AVERAGE lay person - then show me the goods)

Next - The fact of LIFE. Life has it's unplanned changes - including changes in income and changes in expenses. One changes happen - again you would need to software to recalculate what this means before the software could direct you to make the adjusted payments in order to keep the program working and to keep you afloat in your daily living expenses.

To me this isn't that hard to see (but I'm a numbers guy who actually works in the mortgage business - I'm not the average lay person like my customers.) However what I see here is that most people don't understand the concept but thing that they do - then they bash it and cite off things like Quicken, and bi-weekly payments, or extra payments per month (like my friend here) and actually think that it's just as good if not better than using a HIGHLY sophisticated interest calculating software.

By all means - I understand that some people choke at $3500 - and I also understand that as everybody finally wakes up and gets it in the US (like they have done in Austraila and U.K. for decades now) then bank and companies will offer this product for less, and less, and less - until it eventually becomes a free tool that you get as a courtesy just to open your HELOC with "our bank."

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dcwilbur said:

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mikef07 said:

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While I don't neccesarily agree with a pay program no one ever got rich by not paying off their house or better said having a house payment.. Personally I would love to not have a house payment. Less stress, less risk, more money going to me.

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Some people get it, some people don't.

HINT: OPM

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mikef07 said:

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For JayK - Go ask a rich person how they got rich. Their answer will not be "By not paying off my house." Think the richest men in America have mortgages? Probably not.

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mikef07 said:

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For JayK - Go ask a rich person how they got rich. Their answer will not be "By not paying off my house." Think the richest men in America have mortgages? Probably not.

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jayK said:

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mikef07 said:

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For JayK - Go ask a rich person how they got rich. Their answer will not be "By not paying off my house." Think the richest men in America have mortgages? Probably not.

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Many of the richest people in the world have gotten their start taking out mortgages and other loans to bootstrap a new business. Even after they've made it big, you can bet that if they think they could get a better return on their investment than what they are paying out in mortgage interest, they'd get a mortgage in a heartbeat.

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mikef07 said:

---

They could (get a better return) and they don't (get mortgages). They pay cash for their house.

---

drosengarden said:

---

Being debt free is NEVER a bad idea.

---

drosengarden said:

---

But for the average Joe lunchbucket who wants massive acceleration of mortgage payoff and still have access to cash in case of emergency - what I just suggested will work totally fine.

---

jayK said:

---

drosengarden said:

---

Being debt free is NEVER a bad idea.

---

BZZT...myth #24. Thanks for playing.

http://www.fatwallet.com/t/52/225082/

---

jayK said:

---

drosengarden said:

---

Being debt free is NEVER a bad idea.

---

BZZT...myth #24. Thanks for playing.

http://www.fatwallet.com/t/52/225082/

---

drosengarden said:

---

Truth be told - I just joined UFF and got access on Monday. I haven't sold anybody anything yet. The $175 I spent to join UFF to get access to the software and research for myself. I

Well - as I stated - I was wrong. And I'm out $175 - but I haven't lost any face. None of my clients even know abou this yet.

---

---

Being debt free is NEVER a bad idea - you seriously have a different view than probably 9 out of 10 Americans. And that is a bit unusual - unless of course your are the 1 out of 10 sophisticated to understand

---

---

Mr. Suck,
In fact - as I promised I would - I am eating crow. And very much thanks to your reply using simple numbers and actual method concept. The truth be told is that I feel stupid for not running my calculator in the manner you have proposed before spouting off - but I didn't and therefore thought I saw a new business opportunity for my existing mortgage business.

---

mikef07 said:

---

Go ask a rich person how they got rich. Their answer will not be "By not paying off my house." Think the richest men in America have mortgages? Probably not.

---

SUCKISSTAPLES said:

---

mikef07 said:

---

Go ask a rich person how they got rich. Their answer will not be "By not paying off my house." Think the richest men in America have mortgages? Probably not.

---

Mike, you think Donald Trump doesnt have mortgages on his Real Estate and owns it all free and clear?


Your tagline "do you think a rich person has a mortgage" is nothing but that Dave Ramsey BS. He loves to say that, but ignores the fact that many of the most successful people in RE , who own multiple properties, do not own them free and clear. Mortgages provide leverage, and thats what enables these people to get rich.

---

SUCKISSTAPLES said:

---

drosengarden said:

---

Truth be told - I just joined UFF and got access on Monday. I haven't sold anybody anything yet. The $175 I spent to join UFF to get access to the software and research for myself. I

Well - as I stated - I was wrong. And I'm out $175 - but I haven't lost any face. None of my clients even know abou this yet.

---

drosengarden said:

---

Being debt free is NEVER a bad idea - you seriously have a different view than probably 9 out of 10 Americans. And that is a bit unusual - unless of course your are the 1 out of 10 sophisticated to understand

---

drosengarden said:

---

Mr. Suck,
In fact - as I promised I would - I am eating crow. And very much thanks to your reply using simple numbers and actual method concept. The truth be told is that I feel stupid for not running my calculator in the manner you have proposed before spouting off - but I didn't and therefore thought I saw a new business opportunity for my existing mortgage business.

---

Mr. Rosengarden - I am glad my example and my math helped you see how MMA is nothing more than a prepayment strategy, and that 95% of the mortgage shortening comes from EXTRA PRINCIPAL PAYMENT, not the software timing BS. KUDOS to you for discovering the product you were about to sell is based on DECEPTION and refusing to sell it.

You are correct that 9 out of 10 people dont know how to manage their money....but you have found the "1 out of 10" - THIS FORUM IS VERY ATYPICAL. In this forum , the vast majority of people are VERY financially sophisticated. Thats why we dont fall for these scams. DcWilbur, myself and others make far more in other investments than our low mortgage rates, and paying off the mortgage as slowly as possible is actually the most financially advantageous option for us. I dont know how you found this forum (probably by searching yahoo/google) but you happened to stumble on a very unusual group of folks, who handle their finances far better than the average American.

I noticed you said you paid $175 to become a UFF MMA Agent - If you dont mind, it may help others when approached to sell this product if you could detail the "initiation procedure" and how you were conned into becoming a UFF MMA agent, so that others can recognize the scam and avoid it.

---

mikef07 said:

---

I am sure a ton of the rich guys have personal mortgages. NOT!!!. While Trump may have a ton of outstanding debt on his business properties, he probably owns his personal property free and clear.

---

mikef07 said:

---

While there are many companies pushing a pay for home ownership acceleration program, there are some (Wells Fargo) that do not charge you anything to do bi-weekly payments.

---

b8b said:

---

I thought that if I allocate the same amount of funds I am already paying (in my case the extra payment per year divided evenly into monthly payments) and divided the monthly payment into two payments and paid them twice in a month (approx. two weeks apart), that I would achieve additional benefit. Am I correct?

---

drosengarden said:

---

There - have I regained my respectable status now?

---

SUCKISSTAPLES said:

---

Only one or two actually apply the early payments to your mortgage when received. See the Finance FAQ link at the top of this forum, as this is explained in greater detail.

---

b8b said:

---

SUCKISSTAPLES said:

---

Only one or two actually apply the early payments to your mortgage when received. See the Finance FAQ link at the top of this forum, as this is explained in greater detail.

---

I re-read through the FAQ and the only reference to biweekly payments points to this thread . I always feel guilty if someone finds a thread I should have found myself somehow, but I'm really stumped. I'm sure it's stated somewhere which companies apply payments when recieved and allow two payments per month... I'll keep looking and post here when I find it, unless someone finds it first, of course

---

SUCKISSTAPLES said:

---

Wells Fargo discussed here
http://www.fatwallet.com/forums/arcmessageview.php?catid=52&threadid=658195

---

---

No fees is good, but crediting of payments is whats key here. Most mortgage companies dont care whether you pay early or up to 14 days late, the payment is credited equally.

---

b8b said:

---

SUCKISSTAPLES said:

---

Wells Fargo discussed here
http://www.fatwallet.com/forums/arcmessageview.php?catid=52&threadid=658195

---

Unless I am mistaken, it doesn't appear determined in this thread whether payments were applied when recieved. You correctly said: SUCKISSTAPLES said:

---

No fees is good, but crediting of payments is whats key here. Most mortgage companies dont care whether you pay early or up to 14 days late, the payment is credited equally.

---

So I'll have to dig up and through the TOS or search again, must go worship first

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mikef07 said:

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They are applied when recieved. When I receive my statements or check online they are applied the day they are taken out.

---

ThirdJoker said:

---

By the way, it's really very unfair to talk about the "benefit" of saving on mortgage interest without talking about two things: taxes and opportunity costs. Factor those things in and, personally, I want the biggest ol' mortgage I can get without ever paying it off!

Edited for spelling typos...

---

mikef07 said:

---

b8b said:

---

SUCKISSTAPLES said:

---

Wells Fargo discussed here
http://www.fatwallet.com/forums/arcmessageview.php?catid=52&threadid=658195

---

Unless I am mistaken, it doesn't appear determined in this thread whether payments were applied when recieved. You correctly said: SUCKISSTAPLES said:

---

No fees is good, but crediting of payments is whats key here. Most mortgage companies dont care whether you pay early or up to 14 days late, the payment is credited equally.

---

So I'll have to dig up and through the TOS or search again, must go worship first

---

They are applied when recieved. When I receive my statements or check online they are applied the day they are taken out.

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Forever21 said:

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wells fargo offers a biweekly program and it has no setup nor transaction fees. any advice

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SUCKISSTAPLES said:

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They are applied when recieved. When I receive my statements or check online they are applied the day they are taken out.

---

Thanks, Rivler. The only qualm I'd have with this is that this isn't a "new breed" at all. Anyone with any financial acumen at all knows that leverage is the key. The rich get richer by using "other people's money". Like I said, you either get it or you don't.therivler1 said:

---

Article in NYTimes today:

The $3.6 Million Mortgage (free sub maybe required)

"Seth Weinstein, a real estate developer, was approved last month for a $3.6 million mortgage on the $4 million condominium he is buying at the Century at 25 Central Park West."

"He said he wanted to use as little of his own money as possible to buy the apartment, preferring to invest it in Connecticut real estate, where he expects the returns to be 25 percent."

"I�ve seen more $10 million mortgages in the past 6 months than in the past 10 years," said Melissa Cohn, the president of Manhattan Mortgage Inc. "We have the new breed of buyers who are buying real estate for investments and consider leverage to be part of that ongoing investment."

---

drosengarden said:

---

Yeah DC,

No actually on this I don't think I would agree with you.

You see - if you need the cash as an emergency - then you take it out of your 2nd mortgage HELOC - but then you dump ALL of your paycheck (discretionary and all) back into the HELOC. Depending on the emergency - You will attack what you have withdrawn from the HELOC quickly with the discretionary - and while the paycheck is sitting in the HELOC until expenses are necessary - you are paying minimum interest.

Being debt free is NEVER a bad idea - you seriously have a different view than probably 9 out of 10 Americans. And that is a bit unusual - unless of course your are the 1 out of 10 sophisticated to understand and actually make work the money in your mortgage at one tax deductible rate work for you at a higher tax deferred rate.

But for the average Joe lunchbucket who wants massive acceleration of mortgage payoff and still have access to cash in case of emergency - what I just suggested will work totally fine.

Remember - in an emergency - the money has to go out no matter what. So why not have the money "soak up" the interest you normally would have on your first mortgage until that emergency arrives (acceleration) - and only take it out at a higher HELOC when EMERGENCY necessary. You'll then attack that with all you paycheck and soon be done with it.

I think you get the idea here...

---

dcwilbur said:

---

Thanks, Rivler. The only qualm I'd have with this is that this isn't a "new breed" at all. Anyone with any financial acumen at all knows that leverage is the key. The rich get richer by using "other people's money". Like I said, you either get it or you don't.therivler1 said:

---

Article in NYTimes today:

The $3.6 Million Mortgage (free sub maybe required)

"Seth Weinstein, a real estate developer, was approved last month for a $3.6 million mortgage on the $4 million condominium he is buying at the Century at 25 Central Park West."

"He said he wanted to use as little of his own money as possible to buy the apartment, preferring to invest it in Connecticut real estate, where he expects the returns to be 25 percent."

"I�ve seen more $10 million mortgages in the past 6 months than in the past 10 years," said Melissa Cohn, the president of Manhattan Mortgage Inc. "We have the new breed of buyers who are buying real estate for investments and consider leverage to be part of that ongoing investment."

---

---

bjlee979 said:

---

ThirdJoker said:

---

By the way, it's really very unfair to talk about the "benefit" of saving on mortgage interest without talking about two things: taxes and opportunity costs. Factor those things in and, personally, I want the biggest ol' mortgage I can get without ever paying it off!

Edited for spelling typos...

---

You are assuming home values go up!

According to Robert Kiyosaki, real estate is ready to go bust. Or is the real estate is about to go boom, and metals are going to go bust? Or was it metals are going to go bust? All I know is that he says he's always seen every bust or boom coming, so that's how he's made all his money. Whatever you do, don't put it in stocks, that's stupid!

Sorry, any conversation about one "feel-good" scam deserves mention of the king of all "feel-good" scammers!

---

Most people get rich by earning money and saving/investing what's left. A select few get FILTHY rich by leveraging other people's money. It could be someone starting their own business by getting a loan from the bank or someone like Trump using the bank's money to buy/build NY high rise buildings. The Automatic Millionaire is a nice story about saving and living below your means and paying off your mortgage. But it takes more than just saving/investing your savings to get from $1M to, say, $50M. You have to leverage other people's money.

mikef07 said:

---

No, the rich get richer by making more money and doing smarter things with their money. If you save and invest more than you make you can be very rich. Your biggest wealth building tool, of course, is your income. Anyone can make it in this world. My closest friend just accepted a slaes job with BEA systems starting at $240,000 a year with no college education. Is he super smart? No. How can he get rich? Living a $80,000 lifestyle and put the rest away. Anyone on this board can be rich without having to use anyone else's money. OPM doesn't make you rich, making a lot of money and finding ways to make a lot of money makes you rich. OPM may add to your wealth but the BT games and bonus games won't make you rich, they will just add to your wealth.

---

BTW, I'm still hoping to get a response from people who may have experience with the Mortgage Accelerator process or the software. My point is to be able to isolate the process/concept from the software, if at all possible.

anthonyu said:

---

I generally get the concept of amortized vs simple interest and leveraging float, etc. I also understand that the software automatically calculates what you would save and the time to payoff, etc.

My questions:
1. Is it possible to setup your mortgage the same way (MMA, HELOC, etc.) and do the exact same steps without the software?

2. If it is, wouldn't the lenders charge you the same interest if you did the exact same thing regardless of whether you have the software or not?

My point is if I do the exact same thing, I don't need a software to tell me exactly when I will pay off my mortgage. The lender should tell me when to stop and won't accept any more money from me just because I didn't have the software to tell me that I'm already paid off.

drosengarden said:

---

Mr Monky,
Finally - the software - this can not be done with out the software. For several reasons:

First - To calculate the timing of this mortgage "acceleration" considering the factors of closed interest, open interest, forecasted costs, etc., etc - would be impossible to do without the sophisticated calculator. (If you believe that you can do it SIMPLY for the AVERAGE lay person - then show me the goods)

Next - The fact of LIFE. Life has it's unplanned changes - including changes in income and changes in expenses. One changes happen - again you would need to software to recalculate what this means before the software could direct you to make the adjusted payments in order to keep the program working and to keep you afloat in your daily living expenses.

To me this isn't that hard to see (but I'm a numbers guy who actually works in the mortgage business - I'm not the average lay person like my customers.) However what I see here is that most people don't understand the concept but thing that they do - then they bash it and cite off things like Quicken, and bi-weekly payments, or extra payments per month (like my friend here) and actually think that it's just as good if not better than using a HIGHLY sophisticated interest calculating software.

By all means - I understand that some people choke at $3500 - and I also understand that as everybody finally wakes up and gets it in the US (like they have done in Austraila and U.K. for decades now) then bank and companies will offer this product for less, and less, and less - until it eventually becomes a free tool that you get as a courtesy just to open your HELOC with "our bank."

---

---

anthonyu said:

---

BTW, I'm still hoping to get a response from people who may have experience with the Mortgage Accelerator process or the software. My point is to be able to isolate the process/concept from the software, if at all possible.

---

mikef07 said:

---

dcwilbur said:

---

blah blah blah therivler1 said:

---

blah, blah, blah

---

---

blah blah blah

---

kamalktk said:

---

mikef07 said:

---

dcwilbur said:

---

blah blah blah therivler1 said:

---

blah, blah, blah

---

---

blah blah blah

---

and sadly, another thread gets hijacked.

---

mikef07 said:

---

kamalktk said:

---

mikef07 said:

---

dcwilbur said:

---

blah blah blah therivler1 said:

---

blah, blah, blah

---

---

blah blah blah

---

and sadly, another thread gets hijacked.

---

Yes. We apologize for having a discussion in a difference in philosophies. You once again bring nothing to the conversation. It is amazing how there is a direct correlation between people's personalities and their success level. I think we know where you fit in. If you can't follow the change in discussion stick to the kiddie pool.

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kamalktk said:

---

mikef07 said:

---

kamalktk said:

---

mikef07 said:

---

dcwilbur said:

---

blah blah blah therivler1 said:

---

blah, blah, blah

---

---

blah blah blah

---

and sadly, another thread gets hijacked.

---

Yes. We apologize for having a discussion in a difference in philosophies. You once again bring nothing to the conversation. It is amazing how there is a direct correlation between people's personalities and their success level. I think we know where you fit in. If you can't follow the change in discussion stick to the kiddie pool.

---

I'm sorry, what did all your posting in this thread have to do with "Mortgage Accelerator / Offset Account / Pay off Your Mortgage Sooner Myths and Facts FAQ" again? If you want to start a thread about how you should pay all cash for properties, go ahead and we can discuss that there.

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mikef07 said:

---

I'm sorry just about every single thread moves to different topics because that is what adults do. They can discuss different topics, even in one thread, and not get confused. Now go to the kiddie table while the adults talk.

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SUCKISSTAPLES said:

---

Please read what I stated in the old thread very carefully...what matters is when the payment is CREDITED.

I recommend people read DaveHanson's excellent thread on mortgage payment crediting and timing. search the archives for title word netbank

---

SUCKISSTAPLES said:

---

anthonyu said:

---

BTW, I'm still hoping to get a response from people who may have experience with the Mortgage Accelerator process or the software. My point is to be able to isolate the process/concept from the software, if at all possible.

---

on page 2 of this thread , neilruby did whats probably going to be the best explanation as a MMA insider. Its going to be tough, if not impossible, to get more MMA sales agent to present unbiased and accurate details without stating its the best deal in the world.

Typical salary figures , such as $5-10k monthly paydowns of a HELOC to reduce average daily balance, will only reduce interest costs by maybe $20/month. And if you otherwise just kept the money in a 6% savings account, you would earn that $20/month there. Midmonth payment timing tricks alone is NEVER going to amount to significant savings...its all about using every penny of "discretionary income" to make large mortgage prepayments which shortens the loan payoff date.

---

anthonyu said:

---

SIS, thanks for the response. What I'm trying to find out is if I can replicate the scenario by setting up my own HELOC, why would MMA agents keep on pushing the $3500 software (especially in a forum like FW Finance)?

---

kamalktk said:

---

anthonyu said:

---

SIS, thanks for the response. What I'm trying to find out is if I can replicate the scenario by setting up my own HELOC, why would MMA agents keep on pushing the $3500 software (especially in a forum like FW Finance)?

---

They make $ selling $3500 software. This being a finance forum, they realize people here care about $ more so than most, thus financial forums would be a good target. Unfortunately for them, FWF is the proverbial lions den for these types of scams.

---

SUCKISSTAPLES said:

---

I recommend people read DaveHanson's excellent thread on mortgage payment crediting and timing. search the archives for title word netbank

---

SUCKISSTAPLES said:

---

when you refine the search results to topics started by DaveHanson they are easy to find

---

kamalktk said:

---

and sadly, another thread gets hijacked.

---

dcwilbur said:

---

drosengarden said:

---

Yeah DC,

No actually on this I don't think I would agree with you.

You see - if you need the cash as an emergency - then you take it out of your 2nd mortgage HELOC - but then you dump ALL of your paycheck (discretionary and all) back into the HELOC. Depending on the emergency - You will attack what you have withdrawn from the HELOC quickly with the discretionary - and while the paycheck is sitting in the HELOC until expenses are necessary - you are paying minimum interest.

Being debt free is NEVER a bad idea - you seriously have a different view than probably 9 out of 10 Americans. And that is a bit unusual - unless of course your are the 1 out of 10 sophisticated to understand and actually make work the money in your mortgage at one tax deductible rate work for you at a higher tax deferred rate.

But for the average Joe lunchbucket who wants massive acceleration of mortgage payoff and still have access to cash in case of emergency - what I just suggested will work totally fine.

Remember - in an emergency - the money has to go out no matter what. So why not have the money "soak up" the interest you normally would have on your first mortgage until that emergency arrives (acceleration) - and only take it out at a higher HELOC when EMERGENCY necessary. You'll then attack that with all you paycheck and soon be done with it.

I think you get the idea here...

---

You've changed your story again...first you were saying to put all the "descretionary" funds into the mortgage, now you are talking about pulling the money out when you have an emergency. Gee, I thought "descretionary" meant "money I don't need to pay my regular monthly bills". So where do I put the money I am saving for my next car or vacation or that home improvement project? Oh, that's right, for the average joe, those are all emergencies. So you've just talked that average joe into gradually converting his nice 6% fixed rate mortgage into variable rate HELOC debt at 9 or 10% interest and never paying it off. Nice.

---

SUCKISSTAPLES said:

---

Of course it can be replicated using a no fee HELOC...get the HELOC, draw out an amount equal to your earnings, use that money to paydown your mortgage, then pay your bills from the HELOC. Repeat every month.

But will all that actually SAVE you any money? Probably not. As I stated in the OP, IF you can make HUGE paydowns (such as using 50-100k of 0% BT money) you can effectively reduce the interest paid on your mortgage. But just depositing a 5-10k monthly paycheck isnt going to reduce your interest costs significantly.

However, a MUCH SIMPLER alternative is to forget the "HELOC timing tricks" and simply deposit your earnings, or 0% BT money, in a 6% savings account, and leave your 5-6% mortgage alone. Youll earn just as much (and possibly even more) in the savings account as you would save in mortgage interest reduction!

These strategies made MUCH more sense a few years ago, when savings account rates were 2-3%, and HELOCs only cost 4%, both much lower than typical mortgage rates. So paying down your mortgage this way netted some substantial savings. But in todays rate environment a savings account pays 6% (just as good or better than many mortgages) and a HELOC interest rate is 2-3% higher than your mortgage rate.

---

drosengarden said:

---

Anyway - I got a response from my upline. And they had to bring they're upline on board to help explain my "confusion!"

Anyone care to hear what was said?

---

drosengarden said:

---

One interesting thing here is you don't sound as sure as yourself as you had before that the EXACT numbers are any better one way or the other. (And see above - I've given an example where the mortgage/savings arbitrage is NOT better than paying off the mortgage early! GIVE REAL NUMBERS AND REAL EXAMPLES - I DID)

Anyway - I got a response from my upline. And they had to bring they're upline on board to help explain my "confusion!"

Anyone care to hear what was said?

---

drosengarden said:

---

So I have a 6% rate on $100,000 loan...Take a 33% tax rate...That's a 2.59% effective annual rate.

---

dcwilbur said:

---

drosengarden said:

---

So I have a 6% rate on $100,000 loan...Take a 33% tax rate...That's a 2.59% effective annual rate.

---

I thought I was a pretty smart guy, but could someone please explain to me how a 6% rate adjusted by 33% becomes 2.59%?

---

lostdude said:

---

dcwilbur said:

---

drosengarden said:

---

So I have a 6% rate on $100,000 loan...Take a 33% tax rate...That's a 2.59% effective annual rate.

---

I thought I was a pretty smart guy, but could someone please explain to me how a 6% rate adjusted by 33% becomes 2.59%?

---

Simple, that's explained in the post just prior. RE agent tend to use this "fuzzy math" as well by overcounting the tax benefit or misunderstanding how mortgage interest work. I attended a first buyer seminar long time ago and the RE agent used similar shell game as an example to make buying a house seems a no brainer vs. renting.

The same folks usually runs away once you expose the math. Sad, really, I believe most of them really believe in their own BS until.. someone takes the time to go through the numbers for them. Kudo for SIS for starting this thread so we don't have go over this same math over and over again every time a shill shows up.

---

b8b said:

---

drosengarden said:

---

Anyway - I got a response from my upline. And they had to bring they're upline on board to help explain my "confusion!"

Anyone care to hear what was said?

---

I do. And by upline, do you mean you're in some MLM?

---

SUCKISSTAPLES said:

---

drosengarden said:

---

One interesting thing here is you don't sound as sure as yourself as you had before that the EXACT numbers are any better one way or the other. (And see above - I've given an example where the mortgage/savings arbitrage is NOT better than paying off the mortgage early! GIVE REAL NUMBERS AND REAL EXAMPLES - I DID)

Anyway - I got a response from my upline. And they had to bring they're upline on board to help explain my "confusion!"

Anyone care to hear what was said?

---

Im sure we all want to hear what your MLM style "upline" explained to you...im sure thats some sage and ubiased advice

I gave YOU real #s and real examples on page 3 of this thread. You clearly saw that simply funneling $815 of "discretionary money" each month could payoff their home 3 months faster, and pay LESS total interest BY NOT USING A HELOC or MMA AT ALL, and simply making extra principal payments to their mortgage company each month. You saw this is nothing more than a glorified prepayment program, that funnels large mortgage prepayments to shorten the term of the mortgage.

Regarding mortgage/savings arbitrage, thats VERY simple...if you can earn more in other investments than your mortgage note rate, it makes sense to payoff your mortgage as SLOWLY as possible. Conversely, if your mortgage rate is higher than what you can earn in other investments, you'll want to pay it off as quickly as possible. That topic is discussed extensively here and DC Wilbur referred you to it. Note that #s you used in your post to DC Wilbur ere all based on assumptions. You are assuming tax rates and assuming that people will make an investment equal to their mortgage payment PLUS the prepayment amount once they payoff their loan quick then "dedicate that money all to investments" for the next 22 years, and you are ASSUMING the rate that investment will earn over those 22 years! Life insurance salesman use very similar "assumptions" to make their products and presentations for whole life look rosier than they really are too.

More telling, you admited you have fallen for MLM schemes before. What makes you think this is different? When will you learn that getting information from your "upline" is not unbiased or accurate, as it only shows 1 side? Look, We have no incentive to bash your product/software here...we dont get paid for saying its crap. If it was GOOD we would all be getting it. If it was worth the $3500 cost, or even worth $99, or $29, we would get it. Fact is, Its not.

Most importantly, as a mortgage broker, you should have a duty not to scam innocent borrowers who are easy targets, just for you to earn an additional commission selling the software. They wont even recognize the cost of the program since you will likely roll it into the HELOC balance. If you do so, I honestly hope you lose your license and face criminal sanction.

---

dweick said:

---

drrosengarden,

Let me point out a few flaws with your scenario:

BZZZT(s)! Are drosengarden responses...

1) Most people who purchase $100,000 houses do so because that is all the house they can afford. If they could afford a $1400/month house payment instead of a $600/month house payment they would have purchased a more expensive house.

BZZT! The numbers I gave are 100% accurate from an actual friend of mine from church - the same friend whose numbers I've touted since the beginning of my posts. (Thank you for playin...and reading for that matter!)

2) You wildly overestimate the tax savings from the mortgage interest deduction:
a) People who purchase $100K houses typically aren't in the 33% marginal tax bracket
b) People who pay $6000/yr in mortgage interest and purchase $100K homes rarely have
deductions that exceed the standard deduction.

BZZT! Where would you place a $75,000 anual income with MINIMUM 10% given to church (probably more like 15-25%) and all the other likes of a smart cookie? Even if (and most likely) a LOWER tax bracket - that would apply to both the INTEREST PAID and INTEREST EARNED - all thing being equal - you would still come out ahead if not just break even by paying mortgage first THEN dumping 100% of that payment into savings. Again - thank you for playing.

3) Your use of phrases such as 2.17% "effective annual interest rate" are wildly misleading. The effective interest
rate on a mortgage loan even assuming the wildly improbability that they are in the 33% marginal tax bracket
and assuming the wildly improbability that their deductions before mortgage interest exceeds the standard deduction
would be 4%. You aren't calculating an interest rate at all, much less a meaningful one.

BZZZT! (Man you're not doing so hot are you now!) Tell me how one figure the actual AVERAGE YEARLY rate of interest paid on a principle amount over a period of time. Meaningul is the essence of my calculations. Thanks once AGAIN for playing.

4) You played a shell game with all your numbers. You shuffled things around, quoted bogus interest rates,
tax rates, etc. Why? To cover up the real fraud in your numbers. It's the same kind of fraud where someone can
"prove" that 1+1=1, they start adding and subtracting different things (apples - oranges).

BZZT! No fraud - actual calculation - refer to the BZZT! above! Wow - sir - maybe you want to try replying to this one again. I will allow you to press the restart button on this one. Thanks for playing.

In your case you talk about net interest paid (after the mortgage interest deduction) but COMPLETELY FAIL to account
for that tax savings in your two respective cases. The simple fact is, using your numbers, the person who paid more mortgage interest is going to save more money on taxes and that happens to EXACTLY equal your alleged "difference" in account valuations at the end of the 30 years. Nice of you to forget to accumulate up that tax savings in your totals.

BZZZZZT! This one actually show for some reason YOU'RE misleading. Tell me how showing the actual difference between the COMPARISON of two figures - BOTH of which are showing the NET INTEREST PAID (net after the fact of the tax SAVINGS return received) is NOT showing the tax savings difference. Now you have just labeled yourself either lazy or TOTALLY incompetent - and I'm really not in this to name call - but this one takes the cake. Thank you for playing.

The bottom line is you don't need to pay $3500 for a piece of software to know that if you simply pay more on your mortgage each month you will pay it off earlier. Unfortunately suckers who pay $3500 for a piece of worthless software who own $100K homes and are struggling to make their monthly payments don't tend to have the gumption to cut their spending and increase their savings. They also don't have the brains to realize that saving the money in a 6% savings account is going to be just as good as putting the money towards extra payments on a 6% mortgage without all the bother of the goofy HELOC money shuffling (which adds NO value to the scheme but serves to muddy the waters enough that the suckers think that is where the magic money to pay off their house early is coming from when reality is far different).

BZZT! Um...who ever said anything about paying $3,500 and who ever said anything about using a software tool. I KNOW based on the full descriptive and numbers I've put forth you can EASILY recreate what I did with amortization and savings calculators (I say I KNOW because this is what I used - nothing else) Um...did you actually READ this post or just get pissed at the words? Thanks for playing.

Edit: In case it wasn't clear, drrosengarden claimed that the advantage of paying off the mortgage earlier vs just putting the extra cash in a bank account was $662,218.09 vs $633,460.06 but that smooth talker forgot to include the additional $30K in income tax savings the second person would have enjoyed. If he had actually done his math correctly the bottom line numbers would have been identical.

BZZT! Again - refer to above - I did mention the $66,000+ in interest saved from paying off the mortgage early versus over 30 yeasr (and that number came from NET INTEREST PAID - once again where NET INTEREST means Actual Interest Paid MINUS Tax Return From Interest Paid (at my example rate of 33% tax bracket.) Oh sigh...thanks for playing.

Now you tell me which is easier, putting all your extra discretionary income in an interest earning account an withdrawing it as needed or spending $3500 for a software program that pays all your extra discretionary income towards your mortgage and borrow money from an 8% HELOC as needed?

Seems like a no brainer to me.

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mikef07 said:

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Screw it. I'll play. Let us take a real life example.

House is currently worth $350,000
Loan is for $231,000
Pmt - $~1440/month
Interest Rate - 6.125%

Currently we do pay 1 extra payment per year to drop our loan life to ~23 years. We have at least $2000 in extra income that we can do whatever we want with.

Tell me how this would help me.

We are taking that extra $2000 and investing at say 8% currently (It really is higher but let us take low return)

Total interest paid over the life of the loan is approximately $212,000

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drosengarden said:

---

[There you have it folks. UFF people are supposed to sell MMA programs for $3,500 based on a sales tool that is "company attorney restricted" in order to make the money back guarantee stronger. And clients are just supposed to take your word for it that the program calculations will actually be better than what the sales tool is putting forth for your clients (or yourself - depending if you were hoodwinked into it too!)

I LOVE IT! MLM (NETWORK MARKETING) RULE #1 PROVEN ONCE AGAIN - IF A PRODUCT OR SERVICE IS BEING SOLD THROUGH MLM (NETWORK MARKETING) THEN THE BUSINES, THE PRODUCT, AND THE PEOPLE ARE A SCAM.

---

drosengarden said:

---

I feel very aweful and quite the jack ass about this for several reasons:

#1 I knew this was an MLM (Network Marketing - you know, AMWAY!?) company. I've done MLMs before in a different life and I came up with this UNIVERSAL (not personal) rule: If the product is attached to Multi-Level-Marketing (AKA "almost" illegal PONZI schemes) then the product sure enough IS A SCAM. I ignored that rule before I spent the $175 on the entry to UFF and sure enough - I discovered the rule was true

---

SUCKISSTAPLES said:

---

drosengarden said:

---

[There you have it folks. UFF people are supposed to sell MMA programs for $3,500 based on a sales tool that is "company attorney restricted" in order to make the money back guarantee stronger. And clients are just supposed to take your word for it that the program calculations will actually be better than what the sales tool is putting forth for your clients (or yourself - depending if you were hoodwinked into it too!)

I LOVE IT! MLM (NETWORK MARKETING) RULE #1 PROVEN ONCE AGAIN - IF A PRODUCT OR SERVICE IS BEING SOLD THROUGH MLM (NETWORK MARKETING) THEN THE BUSINES, THE PRODUCT, AND THE PEOPLE ARE A SCAM.

---

dude, do you have double personality disorder?

One minute youre touting MMA, next minute you are agreeing its an MLM scam??

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drosengarden said:

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mikef07 said:

---

Screw it. I'll play. Let us take a real life example.

House is currently worth $350,000
Loan is for $231,000
Pmt - $~1440/month
Interest Rate - 6.125%

Currently we do pay 1 extra payment per year to drop our loan life to ~23 years. We have at least $2000 in extra income that we can do whatever we want with.

Tell me how this would help me.

We are taking that extra $2000 and investing at say 8% currently (It really is higher but let us take low return)

Total interest paid over the life of the loan is approximately $212,000

---

I'll do this for you - but not now - the wife is waiting with dinner. But I'll love to play. (And I'll show you the same thing as I showed my friend - the MMA is a scam of course.)

But I need a few other pieces of info - what is your NET take home pay per month? What are your TOTAL living expenses. And then what are your TOTAL debt expenses? (All monthly of course.) And exactly what are you paying MORE than the minimums on the debt? And again - just to be clear - restate EXACTLY how much you are throwing into savings. (Again - monthly)

Chat wit you soon.

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drosengarden said:

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lostdude said:

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dcwilbur said:

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drosengarden said:

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So I have a 6% rate on $100,000 loan...Take a 33% tax rate...That's a 2.59% effective annual rate.

---

I thought I was a pretty smart guy, but could someone please explain to me how a 6% rate adjusted by 33% becomes 2.59%?

---

Simple, that's explained in the post just prior. RE agent tend to use this "fuzzy math" as well by overcounting the tax benefit or misunderstanding how mortgage interest work. I attended a first buyer seminar long time ago and the RE agent used similar shell game as an example to make buying a house seems a no brainer vs. renting.

The same folks usually runs away once you expose the math. Sad, really, I believe most of them really believe in their own BS until.. someone takes the time to go through the numbers for them. Kudo for SIS for starting this thread so we don't have go over this same math over and over again every time a shill shows up.

---

Ok - well my respect for the "1%" of America who can understand and work out the math just dropped into the toilet.

People - let me make up a number for you - $35,012.34 (Interest paid total) And another number - $321,890.22 (Total principle borrowed.) And yet another number - 18.4 years (Time it takes me to pay off the principle and interest on the loan).

Now tell me - what is my AVERAGE ANNUAL INTEREST RATE PAID ON THIS LOAN?

Thank you for playing.

---

1. MOST

2. Married filing jointly, you are in the 15% tax bracket if you make $75K and take the standard deduction. You don't hit the 33% bracket until your taxable income is over $196K (married filing jointly).

3. I compute an annual average interest rate by computing the interest rate for each year of the loan, adding those and dividing by the number of years.

4. Since you can see that your 33% tax bracket was wrong it is difficult to believe your claim of "actual numbers". See #5 as well.

5. Net interest paid is meaningless as you have each person take the same amount of money each month and use it to pay off their home at different rates with the excess being put in a savings account. You then attempt to show that the person who pays off their house faster (ie puts less in savings each month while paying off the house) ends up with more money. This is false because you forgot to add to each person's savings account their tax savings each year. The person who paid off their mortgage more quickly pays less income tax. If you assume all mortgage interest is deductable at the same marginal tax rate as interest income is taxed and your mortage rate is the same as your savings interest rate then it is a complete wash whether you pay more towards your mortgage or take the same money and put it in your savings account.


The HELOC money shuffling is all show yet it is the cornerstone of the sales pitch and people are mislead into thinking the fancy money shuffling is what pays off their mortgage earlier instead of the very simple, completely free concept of just paying more towards your mortgage each month (OR just save money money in your savings account each month and feel free to pay off your mortgage if you wish when the savings account balance equals the remaining amount owed on your mortgage).

drosengarden said:

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dweick said:

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drrosengarden,

Let me point out a few flaws with your scenario:

BZZZT(s)! Are drosengarden responses...

1) Most people who purchase $100,000 houses do so because that is all the house they can afford. If they could afford a $1400/month house payment instead of a $600/month house payment they would have purchased a more expensive house.

BZZT! The numbers I gave are 100% accurate from an actual friend of mine from church - the same friend whose numbers I've touted since the beginning of my posts. (Thank you for playin...and reading for that matter!)

2) You wildly overestimate the tax savings from the mortgage interest deduction:
a) People who purchase $100K houses typically aren't in the 33% marginal tax bracket
b) People who pay $6000/yr in mortgage interest and purchase $100K homes rarely have
deductions that exceed the standard deduction.

BZZT! Where would you place a $75,000 anual income with MINIMUM 10% given to church (probably more like 15-25%) and all the other likes of a smart cookie? Even if (and most likely) a LOWER tax bracket - that would apply to both the INTEREST PAID and INTEREST EARNED - all thing being equal - you would still come out ahead if not just break even by paying mortgage first THEN dumping 100% of that payment into savings. Again - thank you for playing.

3) Your use of phrases such as 2.17% "effective annual interest rate" are wildly misleading. The effective interest
rate on a mortgage loan even assuming the wildly improbability that they are in the 33% marginal tax bracket
and assuming the wildly improbability that their deductions before mortgage interest exceeds the standard deduction
would be 4%. You aren't calculating an interest rate at all, much less a meaningful one.

BZZZT! (Man you're not doing so hot are you now!) Tell me how one figure the actual AVERAGE YEARLY rate of interest paid on a principle amount over a period of time. Meaningul is the essence of my calculations. Thanks once AGAIN for playing.

4) You played a shell game with all your numbers. You shuffled things around, quoted bogus interest rates,
tax rates, etc. Why? To cover up the real fraud in your numbers. It's the same kind of fraud where someone can
"prove" that 1+1=1, they start adding and subtracting different things (apples - oranges).

BZZT! No fraud - actual calculation - refer to the BZZT! above! Wow - sir - maybe you want to try replying to this one again. I will allow you to press the restart button on this one. Thanks for playing.

In your case you talk about net interest paid (after the mortgage interest deduction) but COMPLETELY FAIL to account
for that tax savings in your two respective cases. The simple fact is, using your numbers, the person who paid more mortgage interest is going to save more money on taxes and that happens to EXACTLY equal your alleged "difference" in account valuations at the end of the 30 years. Nice of you to forget to accumulate up that tax savings in your totals.

BZZZZZT! This one actually show for some reason YOU'RE misleading. Tell me how showing the actual difference between the COMPARISON of two figures - BOTH of which are showing the NET INTEREST PAID (net after the fact of the tax SAVINGS return received) is NOT showing the tax savings difference. Now you have just labeled yourself either lazy or TOTALLY incompetent - and I'm really not in this to name call - but this one takes the cake. Thank you for playing.

The bottom line is you don't need to pay $3500 for a piece of software to know that if you simply pay more on your mortgage each month you will pay it off earlier. Unfortunately suckers who pay $3500 for a piece of worthless software who own $100K homes and are struggling to make their monthly payments don't tend to have the gumption to cut their spending and increase their savings. They also don't have the brains to realize that saving the money in a 6% savings account is going to be just as good as putting the money towards extra payments on a 6% mortgage without all the bother of the goofy HELOC money shuffling (which adds NO value to the scheme but serves to muddy the waters enough that the suckers think that is where the magic money to pay off their house early is coming from when reality is far different).

BZZT! Um...who ever said anything about paying $3,500 and who ever said anything about using a software tool. I KNOW based on the full descriptive and numbers I've put forth you can EASILY recreate what I did with amortization and savings calculators (I say I KNOW because this is what I used - nothing else) Um...did you actually READ this post or just get pissed at the words? Thanks for playing.

Edit: In case it wasn't clear, drrosengarden claimed that the advantage of paying off the mortgage earlier vs just putting the extra cash in a bank account was $662,218.09 vs $633,460.06 but that smooth talker forgot to include the additional $30K in income tax savings the second person would have enjoyed. If he had actually done his math correctly the bottom line numbers would have been identical.

BZZT! Again - refer to above - I did mention the $66,000+ in interest saved from paying off the mortgage early versus over 30 yeasr (and that number came from NET INTEREST PAID - once again where NET INTEREST means Actual Interest Paid MINUS Tax Return From Interest Paid (at my example rate of 33% tax bracket.) Oh sigh...thanks for playing.

Now you tell me which is easier, putting all your extra discretionary income in an interest earning account an withdrawing it as needed or spending $3500 for a software program that pays all your extra discretionary income towards your mortgage and borrow money from an 8% HELOC as needed?

Seems like a no brainer to me.

---

Well sir - NO BRAINER seems to sum up your post quite well. So thanks so much for playing. Buh-bye now! (Oh and to make sure I'm thorough in addressing all your points - I just showed a VERY realistic scenario where one comes out ahead, TAX DEDUCTIONS/SAVINGS - WHATEVER YOU WANT TO CALL IT - All 100% accounted for - and NO $3,500 NO MMA, NO NOTHING OTHER THAN GOOD OL' FASHIONED MATH APPLIED! And throwing ALL your money in ONE payment to RETIRE DEBT in just over 7 years actually seems quite the MORE simple option to me. But then again - you're the one who admitted to..."NO BRAINER"....GAME OVER MAN!)

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AppleDay said:

---

One sad thing about this blog... the moderators here allow folks to bad-mouth a company... then when someone from the company tries to defend it (usually with facts) ... they lock the forum or delete the post... but leave the negative posts. I will be interested to see how long this says up. I wonder if the Fat Wallet people understand that there have been lawsuits lost by forum moderators who, by selectively editing their blogs, ended up having the courts intrepret their actions in such a way that the blog was not covered under free speech anymore... it was evaluated under the publishing laws and precedents. And the publishing laws do not protect libel or slander. The last time I tried to defend United First Financial the moderators told me (after deleting my post) that defending WAS OK... as long as the post was not INITIATIED to advertise for the company, but was posted to defend, and to clear up missunderstanding. Since this is obviously a defense of the negative comments posted here... I hope they keep their word. I think that balance is important - though from the looks of the ratings here, that is not a popular belief.

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AppleDay said:

---

Again... math does not lie:

Interest over life of mortgage: 1 year snapshot of interest paid on heloc versus interest saved on primary mortage: 12 months total on heloc interest: $297.89 - Interest saved on primary mortage side: $50,862
Add cost of software to interest on heloc $3797.89 - so is that a good return on investment?

1 year EQUITY advantage: Analysis with $200,000. mortgage @ 6%, Heloc @ 10%, $1400 income bi-weekly, $550 weekly, and $0 discretionary income left over at month end. Pay off in 16.7 years and save $121,050 in interest over the life of the mortgage. EQUITY at end of first year with regular mortgage - only $2484.04 would have been paid down in principle. With this program it is $7327.79! Those would be guaranteed results. That is an advantage of $4843.75 in ONE year. Subtract cost of program ($3500) = $1343.75 so even if heloc interest was $500 for that year... they still have an advantage in just the first year of over $1300.

Year 3 - they would have paid down mortgage by $7923.86 with the old way... but with this program they have paid down mortgage by $23,492.07 Remember... that this is with $0 in discretionary income at month end. So... the average person waits 5-7 years to build enough equity to afford a bigger, better house. With this program they have MORE equity in 3 years... than then would in 7 using their regular 30 year mortgage.

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AppleDay said:

---

The State of Utah audited our company a few months ago and found that the EFFECTIVE interest rates for the helocs our clients were using was a little over 3%.

Does it make sense to borrow money at 3% to pay down a 6% loan?

---

---

So why does it pay off faster even with ZERO discretionary dollars?

There are 3 concepts that drive this...

1 - Value of your stagnant - sitting around money. We all have thousands of dollars sitting in our checking account waiting to be spent. We can put the value of that money to work for you with this program. I am sure that everyone here is financially savvy enough to realize that money begets money... and that that stagnant money has a value that can be borrowed against.

---

---

2 - Open-ended heloc versus closed end mortgage. If you borrow $1 from a heloc @ 10% - you pay 10 cents if you pay that dollar back the last day of the year. But put it into a 30 year mortage at the beginning of the mortgage (first 10 years) it will save you $4 to $5 in interest over the life of that loan. Does paying 10 cents to save $4-5 sound like a good idea?

---

---

So let us borrow against the value of your stagment money. Software insures borrowing is controlled, and transfers are to a gnats whisker for optimization.

---

---

3 - Interest Cancellation. By treating your heloc like a checking account... and depositing income into it... you constantly drive down the average daily balance of that account.

---

---

Primary mortgages are calculated on month end balance - helocs on average daily. If you borrow $1 at 10% interest... you only pay 10 cents if you pay it back the last day of the year. But what if you pay it back in 3 months or less? Then you are paying less than 3 cents in interest... and have an EFFECTIVE interest rate of less than 3%. By constantly washing your income through that heloc you achieve this lower effective interest rate.

---

---

See... even if you THINK you have $0 discretionary... this program uses the 3 concepts above to FIND money. It is truly just nickels and dimes. But nickels and dimes add up to dollars... which applied to a 30 year mortage at the beginning of a mortgage... saves 4 to 5 times that amount in overall interest over the life of the loan. Savings on 15 years loans are less... but still a great return on investment.

---

---

The great thing about this is... since this program can build you equity even WITH $0 discretionary income.. it is easy to see that you could get creative and take equity back out later to use for higher yield investments.

---

---

Math does not lie.

---

---

All you have to do to understand this program is get someone to run an Analysis for you on numbers YOU understand. Then... use your own tools to see if you can beat the results (which would be guaranteed). If you CAN beat the Analysis... then you should not buy the software, unless you just want to save time. If you can NOT beat it... then it is a good investment for you. Of course... even if you can beat it... you will have to ask yourself if you really want to do that kind of math every month, month after month, year after year, when you could have just bought the right tool for the job

---

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Anyway... national PR campaign starting this month. Bank announcement next month. Soon everyone is going to know that this works, and it is NOT a scam. It is going mainstream. Those of you that have been voicing your opinions on something you really do not understand... You might want to get up to speed for credibility reasons. Let me know if you do.... I can run an Analysis for you.

Note.... there was one accurate statement I found on this blog by a skeptic. And that is that this program will not work for someone who constantly spends MORE than they make. But it does not appeal to those kinds of people. It appeals to smart money people who are a bit more disciplined.

---

---

Again... math does not lie:

---

---

Interest over life of mortgage: 1 year snapshot of interest paid on heloc versus interest saved on primary mortage: 12 months total on heloc interest: $297.89 - Interest saved on primary mortage side: $50,862
Add cost of software to interest on heloc $3797.89 - so is that a good return on investment?

---

---

1 year EQUITY advantage: Analysis with $200,000. mortgage @ 6%, Heloc @ 10%, $1400 income bi-weekly, $550 weekly, and $0 discretionary income left over at month end. Pay off in 16.7 years and save $121,050 in interest over the life of the mortgage. EQUITY at end of first year with regular mortgage - only $2484.04 would have been paid down in principle. With this program it is $7327.79!

---

---

Those would be guaranteed results. That is an advantage of $4843.75 in ONE year. Subtract cost of program ($3500) = $1343.75 so even if heloc interest was $500 for that year... they still have an advantage in just the first year of over $1300.

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EricGo07 said:

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Nice Summary SiS.

However, aren't you forgetting to take the effective capitalized interest reduction divisor threshold into account ?!?

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Thank you AppleDay for the following PM SPAM:

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Delzy...

Did you mean this...

Interest over life of mortgage: 1 year snapshot of interest paid on heloc versus interest saved on primary mortage: 12 months total on heloc interest: $297.89 - Interest saved on primary mortage side: $50,862
Add cost of software to interest on heloc $3797.89 - so is that a good return on investment?

The $50,862 is the interest saved over LIFE of primary mortgage. But in the first year the program has knocked 53 months off the mortgage... and has cost the homeowner the program cost plus the interest on the heloc to do it. Normally it would take about 5.5 years to get to the same principle balance.

I am sorry.... I am thinking that perhaps I did not make it clear enough that that was interest savings over LIFE of mortgage?

But... as you can see... even if you stopped here... you are still in good shape... $12,000+ in additional equity in just the first year. Most folks break even on the cost of the program in 3-4 months, but even if it took a year, my opinion is that it is a good ROI for how easy it makes the other years of the program. Plus... you can use it on up to 5 primary residences at no extra cost.

Can a super smart math person do their own program and get similar results? Sure... we have never said they cannot. But the average American does not want to spend weekends pouring over spreadsheets. And it IS math, not horseshoes or handgrenades. Similiar/close could still be $10,000, $30,000, $60,000 away from the results you would get with more precise calculations.

I am pretty analytical...so I figured out that if your projected savings were $100,000, you would have to be confident that your own program would be within a 3.5% margin of error. On savings of $200,000... it would have to be a margin of 1.7%. I am sure that some of you brainy math types can be confident of those margins... but I know that I could not be.

Anyway... sorry again if I caused you to missunderstand this.

Best wishes!

Sue
407-607-8869

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Venturion said:

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I end up with one question. If I can't change a person's behavior with logic and sense (think budgets, planning, frugality, etc.), is $3,500 too high a price to pay if it "misleads" said person into a forced savings program under the guise of "magic" software?.

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Venturion said:

---

As I digest the wonderful information provided (both misleading from the MLM participants and clarifying from the FW members), I end up with one question. If I can't change a person's behavior with logic and sense (think budgets, planning, frugality, etc.), is $3,500 too high a price to pay if it "misleads" said person into a forced savings program under the guise of "magic" software?

As a crude analogy, I'm reminded of how I have to resort to fuzzy logic (or use sweet rewards) to explain and incent good behavior to my young nephews.

Let me reiterate that I fully understand and agree that the software is a sham. However, is there some Matrix-like "blue pill" effect in forcing certain consumers to change their behavior from over-spenders to super-savers (via the hidden extra pre-payments) through this type of program? My gut says no, but there is some odd attraction to this type of manipulation (insert mad scientist laugh). For the moment, I'm actively ignoring other (relevant) issues like asset concentration, housing market dynamics, etc.

---

---

The real paydown in their example is due to the $1000 month extra payment on the mortgage each month, nothing to do with shuffling money in and out of the HELOC ($5000 monthly paycheck, $4000 monthly expenses, excess sent to the mortgage).

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Berlins' said:

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Although we may admit for the financially undisciplined this may "help" them, I think the opposite is true. You just slapped a HELOC on their home and gave them the ability to spend against it, even to above their paycheck.

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berlinsmommy said:

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Although we may admit for the financially undisciplined this may "help" them, I think the opposite is true. You just slapped a HELOC on their home and gave them the ability to spend against it, even to above their paycheck. Instead of depositing $1,400 biweekly and having the ability to spend $1,400 biweekly, they can now not be "limited" by that $1,400. I can just see the family who gets the MMA through UFF and suddenly now has the means to go buy that 4 wheeler, the new fridge, a weekend at the casino, and the "much deserved" vacation.

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SUCKISSTAPLES said:

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wow - besides stressing that its only for people who spend less than they earn, that article glosses over most of the negatives of moving mortgage to HELOC (mentions the higher rate in one small sentence)...

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SUCKISSTAPLES said:

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chatterweb...why? What are Sydneys costs and fees, and terms of their HELOC?

have you compared those terms to the lenders listed in the HELOC FAQ in this forum?

And most importantly, after reading the OP of this thread, and understanding that the TRUE way the mortgage principal is reduced by these schemes is by simply funneling every penny of extra income each month into mortgage paydown, why not just make extra principal payments to your mortgage?? It accomplishes the exact same thing at less cost!

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Venturion said:

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It's late as I read it, but the Sydney web site doesn't really discuss the concept of a HELOC in the second lien position. Nor does it show any fees. Of course this encourages inquiries. If someone does more digging, it would be good to get the details. I'm sure the rate will be higher and there will be refinancing costs, but it doesn't hurt to keep an open mind.

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BobTrout said:

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blah blah blah

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All of this blogging and nay-saying sort of reminds me of history class... When we learned about all the hub-bub and controversy that was happening back when folks were convinced the earth was flat. The round-earth people could not show them a photograph from a space ship back then... so they had to try to prove it with math.

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BobTrout said:

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Just got back from a United First Financial conference. It was announced that in the next month several NATIONALLY RECOGNIZED names in finance are publically endorsing the UFirst software and the Money Merge Account. They have a national bank announcement coming out soon as well.... so simply keep your eyes open for these announcements.

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BobTrout said:

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Just got back from a United First Financial conference. It was announced that in the next month several NATIONALLY RECOGNIZED names in finance are publically endorsing the UFirst software and the Money Merge Account. They have a national bank announcement coming out soon as well.... so simply keep your eyes open for these announcements.

Credibility for United First Financial (among folks who understand, and own, the program) is growing as fast as sales. Last month the companys sales increased 65% ... that was a one month increase!

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BobTrout said:

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Actually because of the advance-time value of transfers you will never get as good a result if you use the conservative approach of just using the HELOC as a cushion and throwing only your discretionary income at your mortgage.

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BobTrout said:

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Is the software worth it? That is the only valid question.

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The latest shill said:

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For instance... on a $5000 amount going to your primary mortgage over a 13 week period.
If you send it in with the first payment it saves you $262 more than if you waited the 13 weeks... saved it up... then sent it.

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from the OP

SUCKISSTAPLES said:

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Just watch to see HOW MANY NEW MEMBERS signup at FW just to post in this thread promoting them

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TaxLaw said:

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Just two of the things that make United First Financial stand out is that we have a HUGE customer support staff to help our clients whenever they need

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we are the ONLY one with an algorithm driven software program.

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It is like a financial GPS system. If you make wanky amounts of income,

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the software is always going to get you back on track to the fastest way to zero.

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It was announced that the next generation of software is going to blow this one away.

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Upgrades are free.. another advantage we have over all the competitors I have looked at.

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ellory said:

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TaxLaw said:

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Just two of the things that make United First Financial stand out is that we have a HUGE customer support staff to help our clients whenever they need

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Except when someone wants their money back

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we are the ONLY one with an algorithm driven software program.

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Wow! You have a patent on math?

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It is like a financial GPS system. If you make wanky amounts of income,

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mumbo jumbo

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the software is always going to get you back on track to the fastest way to zero.

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Except it doesn't tell you not to waste your money on this garbage

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It was announced that the next generation of software is going to blow this one away.

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Do us a favor. Turn it on yourself first. Blow yourself, your bad math, and your scam away

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Upgrades are free.. another advantage we have over all the competitors I have looked at.

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Guess you have never looked at simple mortgage prepayments. No upgrades required. No $3500 scam software. No MLM scammers. Go away. People here already understand that this worse than a complete waste

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mikef07 said:

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You will come out behind no matter what than if you did it on your own.

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Roccy said:

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....

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TaxLaw said:

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For instance... on a $5000 amount going to your primary mortgage over a 13 week period.

If you send it in with the first payment it saves you $262 more than if you waited the 13 weeks... saved it up... then sent it.

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Hi there...you are correct in pointing out the differences, but whether its UFF or the CMG "system" or anything else, you are selecting a fee laden, poor-rate, higher priced loan than you can get yourself. At the very least, check out Salem five, linked here

http://www.fatwallet.com/forums/arcmessageview.php?catid=52&threadid=570039

they offer a similar product to CMG with lower margin, coming directly from reputable bank instead of a middleman.

I still dont like these loan systems bc they either try to rip you off with upfront fees, tell you to move your current low mortgage rate balance into a higher rate new mortgage or HELOC, etc. How much "savings" you can accomplish is obviously a factor of how much extra money you have each month to dedicate to prepayment, the rate you can earn in other investments, etc.

xraymikek said:

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*** CONCLUSION ***

So if you have a bunch of cash always sitting around in your checking account, and if that checking account earns no interest, and if you earn relatively big paychecks compared to your mortgage, this may be a viable financial option.

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*** CONCLUSION ***
...viable financial option

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xraymikek said:

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I was unaware, however, of the existence of a 6% free checking account. That makes all of this exotic mortgage talk relatively pointless. Can someone either post a link or tell what to search for in the forums for the info?

Regards

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mattw2411 said:

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The CEO of Prudential Realty is an agent.

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mattw2411 said:

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The CEO of Prudential Realty is an agent as well as a client.

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max101 said:

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Everyone I'm lost, I'm a Soldier (Army) 20yrs to date just recently bought a house. I am way over my head on this besides the other things going in my world. I really need some advise; I bought a house for 185k with the payments being 1200 a month, for a 30yr fixed mortgage. I would like to pay the house of early or have some decent equity in the house. Help me get my self together, I have a trillion questions and have all the time in the world to listen. In Iraq at least between missions just need to know how I can own a piece of the American dream and not lose my house in the process! Look forward to hearing the replies

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mattw2411 said:

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This link will affrim that the MMA is not a scam. Click here: HERE.

For further information, you may visit my website,
Financial Freedom LLC. or . . .
www.UnitedFirstFinancial.com -- check out the 15-minute video about our revolutionary MMA.
Graze either site at your leisure.

For inquiring minds, interested in due diligence:
UFF is debt-free, with a D & B #1 rating (highest possible)
We are presently doing a limited joint venture with US Bank in California, Colorado, Utah, Oregon, Florida, Idaho, Missouri, New Mexico, N Dakota, Wyoming. We reference US Bank as our "Preferred Provider". All indications are that this will soon become a nationwide partnership.
Largest ReMax office in the US is now on board.
One of the largest mortgage houses (2500 Agents) in US, InterMountain Mortgage, is also on board.
The CEO of Prudential Realty is an agent as well as a client.

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mattw2411, how about answering the question where you "claimed" , that
mattw2411 said:

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We are presently doing a limited joint venture with US Bank in California, Colorado, Utah, Oregon, Florida, Idaho, Missouri, New Mexico, N Dakota, Wyoming. We reference US Bank as our "Preferred Provider". All indications are that this will soon become a nationwide partnership.
Largest ReMax office in the US is now on board.
One of the largest mortgage houses (2500 Agents) in US, InterMountain Mortgage, is also on board.
The CEO of Prudential Realty is an agent as well as a client.

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jayjaysin said:

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Hi, new member here.

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jayjaysin said:

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But after reading all of this, I sounds like maybe if I put all of my salary into the HELCO and use it as a checking account, I could pay that off more quickly than the traditional way of making a payments monthly from my current checking account, by saving on the interest caclulations. Then, once my HELOC is paid off, I can just take the discresionary income in the amount I was paying on the HELOC, and send it to the first mortgage. I don't need the expensive software for that.

Most of the posts here say that the use of the HELOC as a checking to pay a mortgage isn't worth it, but there are a few that I interpreted as it can work to pay off an existing debt on the HELOC.

Does everyone agree that floating the money in a HELOC can help pay the balance on the HELOC down faster?

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MrRightGuy said:

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http://video.google.com/videoplay?docid=-629412742370576178&total=28&start=0&num=10&so=0&type=search&plindex=0

http://video.google.com/videoplay?docid=4731012363475358075

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jsimon7777 said:

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Many of you guys are not quite understanding the Home Ownership Accelerator.

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JSimon777 said:

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4. Interest rates are going to go up. Inflation is rampant and rates are at historic lows.

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Early payoff tool: CMG's program has been hyped as an early payoff tool because the prospect captures people's attention. However, while the intramonthly interest savings described earlier are real, they don't add up to much. To pay off a 30-year loan in 10 or 15 years requires extra payments, and you don't need an Accelerator loan to make extra payments.

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jsimon7777 said:

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ellory said:

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jsimon7777 said:

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Many of you guys are not quite understanding the Home Ownership Accelerator.

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Not true. But what is true is that you UFirsters don't understand High School math.

Want to prove me wrong? Take the CalvinandHobbes challange. Be the first UFirster to ever complete it

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Wow, did you guys even read my post? I said Home Ownership Accelerator. That's not UFirst or whatever that pyramid scam is called. This is CMG through GMAC. Ya know, GM, mom, and apple pie. Here, read something from the Washington Post about it:
http://www.washingtonpost.com/wp-dyn/content/article/2007/12/14/AR2007121401062.html

I'm paying 3.5% on my loan right now. In 12 years or so, I'll have paid off my loan while paying a butt load less in interest than a 15 year fixed would require, let alone a 30 year with extra payments, and that's including rising rates. Yeah, the rate will likely go up, but I'm getting the super low rates now while I have the highest balance, so I can deal.

For the right people with the right expectations, good credit, and income, CMG's loan rocks.

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jsimon7777 said:

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I'm paying 3.5% on my loan right now. In 12 years or so, I'll have paid off my loan while paying a butt load less in interest than a 15 year fixed would require, let alone a 30 year with extra payments, and that's including rising rates. Yeah, the rate will likely go up, but I'm getting the super low rates now while I have the highest balance, so I can deal.

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ioio said:

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for the reading challenged, what is the bottomline? I stumbled into this thread trying to find some information on if i should sign up on the bank of america mortgage accelerator program. I haven't done the math, or find out detail about it, but was offered a similar accelerator when i was with chase, i just want to know if there's a calculator out there for it. is this good, bad, or bad only if you don't move/refi, etc, etc...

hope this makes sense. thanks.

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