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United First Financial Money Merge Accounts: Scam or Legit?
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A reader recently sent an email asking about a program United First Financial runs called a Money Merge Account and whether it was legitimate. United First Financial promises that the program, which costs $3500, would have you pay off the mortgage in one-third to one-half the time it normally would take. Knowing nothing about money merge accounts and knowing a little bit more about simple math, I smelled a fat $3500 scam brewing. The only scenario in which I could see $3500 cutting your mortgage in half is if you had a $7000 mortgage. But, setting my mental scam alerts aside, I did some more research about the plan.
Apparently it’s a fancy name for an accelerated mortgage repayment scheme. The first step in the money merge account is to take out a second mortgage on your home, a home equity line of credit. Then, what you do pay your entire paycheck towards the first mortgage and withdraw money from the HELOC to cover your expenses. You save a little money because the interest on a HELOC is calculated based on average daily balance rather than the final monthly balance. This lets you pay off more of the mortgage at the beginning of the month and then be charged less interest on the HELOC. (this assumes the same interest rate, which is a big flaw)
However, the plan also has a lot of other assumptions and flaws.
- It assumes that your HELOC interest rate will be the same as your first mortgage interest rate – very unlikely. The bigger the HELOC rate, the less you save on that difference.
- It assumes a single monthly paycheck so it’s a plan that loses some of its power if you are paid irregularly or every two weeks.
- One big flaw is that there is never discussion of HELOC fees. I’ve never opened a HELOC but I imagine it’s not free.
- This plan requires that you don’t save at all for anything else. Since your entire paycheck goes towards the mortgage and you withdraw expenses, it penalizes you drawing on the HELOC for non-essentials. Why pay $100 towards a 6-7% mortgage and then borrow $100 from a 10% HELOC?
- Finally, as if all those weren’t enough, you have to pay $3,500 for a program to help you do this!?
In researching this article I researched a lot of sites and they were nearly unanimous in their opinion that these types of programs are not worth the money (not surprisingly). They’re not scams in the sense that you pay your $3500 and they disappear into the night but it’s something you can do yourself.
This begs the question, should you use it to force discipline? I could justify paying $100 to enforce discipline because it can save you quite a bit in the long run, if you can overcome the failings, but $3500 is ridiculous. If you have $3500 and you want to pay off your mortgage sooner, send a $3500 check to your mortgage company. (if you want a legitimate and easy way to pay off a mortgage faster, consider making mortgage payments every two weeks)
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James still has not given an answer as to why it is so important to pick a certain day of the month to pay a car loan when buying a new car. He has however said that the UFF software can figure out which day is the magic day. More magic and no math from James.
JimmyDaGeek said, “I simply took all the information, recreated all the calculations and put that into a spreadsheet here: http://spreadsheets.google.com/ccc?key=pszjmlNnSFKhwM90Q3dWHVg&hl=en where you can see that, according to MMA’s own numbers, it does not beat doing it yourself.”
Looking through the UFF flash video you linked to, it looks like your numbers jive with what they showed for the most part. The MMA video payment values are also shown in this agent’s example website, which has been linked to in other threads.
https://www.debtfreeproject.com/money_merge_account_example.html
For the 1 year mark, the difference between JimmyDaGeek’s original spreadsheet and the debtfree example is that Jimmy adds the current month’s HELOC beginning balance to the mortgage loan balance
(176,319.64 + 9,202.00 = 185,521.64)
whereas the debtfree example adds the average daily HELOC balance to the mortgage balance
(176,319.65 + 9,167.30 = 185,486.95).
There are typical rounding issues, but those are on order of pennies. And they are more than the simple prepayment value of (185,208.41).
I guess there is no way to know exactly what MMA would transfer from the HELOC in this example case after month 12, but it probably would mimic what it had started out to do. And as complex as Jimmy’s original spreadsheet looks, the Do-It-Yourself prepayment method really wouldn’t need anything remotely complex. $3,500 (or 3,800 + 24.95/month) doesn’t seem like it’s adding as much value as it should.
Interesting.
I finally got my computer back from my 8 and 11 year olds for a second…..
Jimmy, take your spreadsheet showing the $50 a month extra. Change that to $1 and post that would you please? I just changed mine to $1 dollar and it added only 1 month. I am anxious to see if yours does the same.
The video you refering to is using a HELOC and is quite old and not very detailed. It is not using the credit card system in my example. It may or may not make a difference in your spreadsheet.
WhackAShill, here it is again for you. If a guy, like in my example, only had $50 a month in disposable income and took part of his line of credit from his credit card to come up with a down payment, you know as well as I it would affect the outcome of the pay off of that debt and others using any software or roll down method Jimmy’s using. Since that money is no longer available to use to offset the other credit cards interest that month and the next few, and now you have a higher car payment or new one, it of course affect the numbers and you need to know that before you make the purchase. If you took the downpayment out of your paycheck the day of your paycheck it would result in different numbers than if you just took it off the CC lines.The software would tell you how that will affect your payment schedule on all debts.
MMA software users said:
“The average daily balance of interest is significantly reduced the longer you leave your paycheck money in the HELOC (keeping the balance lower). So, it would make sense to have your car payment taken out at the end of the month versus the beginning of the month because it enables the borrower to keep a lower balance on the HELOC until the end of the month when the line is accessed to make the payment.”
Wouldn’t it make sense then just to wait till the following month to buy the car? This would leave the money in the account even longer! Wait, why not wait 2 months to buy the car? Even more money saved! 6 months? 1 year? When does it end?
“I got a text message from UFF that told me wait to buy my car until 2015 when cars will run 200 miles on 1 gallon of gas!”
James
If you look at my MMA Payoff Example spreadsheet, above, you will notice that the MMA principal balance is also lower compared to the do-it-yourself. If you look carefully at the bottom of the column, its the HELOC that has the balance that needs to be paid off.
As for my other example, I also can’t believe the difference is as large as it is. That’s why I wanted to know why my Current Debt Schedule interest sum is not the same as your report. As I said, I vetted my numbers with online calculators, so I know my starting calculations are correct. Perhaps you can ask your people to vet their numbers.
Even with changing expenses, you don’t need software to pay off a mortgage. With a HELOC as a backup, you can borrow on it if you have a shortfall and then pay it off immediately.
If you give me a HELOC interest rate, I will be glad to create a HELOC model using your challenge report data and see if there is much of a difference.
If you are refering to the spreadsheet that had your way on one side and the MMA on the other (not the debt roll down one) that spreadsheet is flawed because your line of credit daily interest is not calculated properly since you did not apply the $5000 his salary each pay period to offset the daily interest, so all of the numbers are off. Additionally, I software doesn’t just send in extra payments every two months so that is off.
I was comparing your debt roll down scenario spreadsheet to my analysis I posted in my comment below:
“My MMA is paying off more principal faster than your own debt roll down spreadsheet. Im over $3000 ahead of you in principal reduction the first 12 months. I am paid off in 148 months (even though I had to pay for the financed MMA of $3800), you in 150, which saves an additional $5200 in payments over your spreadsheet. How is it then that I am paying $9000+- more in interest? If I am reading iyour spreadsheet right, it shows 110k paid interest. Im thinking there may be a error in one of your formulas or something didnt get added. What did I miss? If I used a HELOC instead of CC, btw, it would bring it down to 144 payments. I did it on CC’s because getting a HELOC is tought right now, to say the least.”
Even when using $1 instead of 50 for disposable income, I am only at 149 months to pay off.
JamesBarnes says “My frustration is that everybody comments on the software when they have not even seen it (they have only seen the analysis software) and say they can do it better themselves”
Are you saying that the analysis software does not reflect what the “real software” does?
Are you willing to make provide a free license for test purposes so that people can see what the “real software” does?
No way I am putting up $3500 for a flawed product. (I don’t need too see the flawed UFF GPS to know it doesn’t work. I only need to see that the U1st GPS is telling me that the “optimal route” to cross the street is to drive across town and back
Ellory,
One of the things that I admire about the company is that you have to send it the clients information before selling it to them. They look at the analysis to make sure the salesman did it right and correct any mistakes and resend it back for redisclosure. If it won’t do as it says, they won’t sell it to you. I have seen that happen. I cant think of another company that does that, can you?
I am currently waiting for Jimmy to make some adjustments on his two spreadsheets to see if it is really better to do it yourself in his simple scenarios. So far, the debt roll down he used is not beating it and I am waiting for the adjustments on the HELOC spreadsheet I described above in my previous post. Im sure Jimmy will do it. He is probably busy as am I.
Why and how do you feel the product is flawed? Does it work? Yes. Can you do it yourself as efficiently? Maybe, if your life is not complicated and things don’t change much. But, if your life is constantly changing financially with unexpected bills due to kids, or you have commission and bonus income, medical issues, etc., it is very nice to have piece of software that automatically makes the necessary adjustments for you to keep you on track and show you the consequences of your spending habits over the long haul.
James, UFF does not automatically change when a complicated financial situation arises, you have to input the changes into the web site. Same as inputing the changes into Microsoft Money or Quicken. Don’t make UFF sound superior when it is not.
One of the things I don’t admire about the company is how agents and the UFF web site claims that you do not have to change your lifestyle for the program to work. Well I guess people can still spend all their discretionary income on whatever they want then huh? Oh wait, the UFF is using all that money to pay down the mortgage so I GUESS THEY DO HAVE TO CHANGE THEIR LIFESTYLE. Another UFF lie.
WhackAShill, In the scenario I posted, I can change the discretionary income to $1 and it still pays off in 149 months, so it does work and they are NOT changing their lifestyle.
When things change, lets say your commissions or bonus was less or you had to pay for a car repair, you just plug that in, in one place. The software then recalculates ALL of the necessary adjustments to the floats on the credit cards and mortgage payments to keep you on track. Guess your $5 calculator and Quicken to do that too with one entry….
WhackAShill, since you have not seen the software, and what you know about it is SO limited and based upon other peoples opinions who also have not see the software, why do you feel you can comment on what it does or doesn’t do or if it any good or not?
WhackAShill, just sit back and let JimmyDaGeek handle this. He at least is being professional.
James,
I have seen the software, remember a UFF agent came to my office and asked to me to push this software onto my clients. Within two hours of seeing the software, showing me the software, giving his “pitch”, he admitted that it was nothing more than a motivational tool, and that anyone can replicate the results.
The software is nothing special, I can attest firsthand. However, you do not need to see the software to know its a scam. All you have to do is look at the marketing.
James even in your example the person has to drastically change their lifestyle!
Once the credit card salary float manages to pay off the credit card debt, those payments that were going to pay the credit card THEN GOTO THE MORTGAGE.
Also, how did the person in your example rack up all the credit card debt in the first place? Probably by spending more than they make! They have to CHANGE THEIR LIFESTYLE and stop SPENDING MORE THEN THEY MAKE in order for the UFF payment plan to work!
No, you didnt see the software, you saw the analysis software Agents don’t go around showing the full version, just the analysis software. Wrong again. Sounds like your UFF agent didn’t understand the product if he said it was a motivational tool, and in the last two years they have had 2 or 3 major upgrades to the software which allow for many more scenarios and upgrades are always free.
Yes, once the float pays off the credit cards, the money they were spending is paying off the mortgage. Are they spending more than they were when they started? No. Is it allowing them to use the banks float to start an organized roll down when they dont have the extra money themselves? Yes. Additionally, now that the cash is freed up from the credit cards they can pay cash for emergency expenses or invest.
How does some one rack up all that credit card debt? WhackAShill, people come to me DAILY for mortgage loans that have 15-80k worth of credit card debt. So having 25k in debt is not uncommon. They can still use their credit cards but it will show them how that effects their debt roll down on all debts, something you can not do on a simple spreadsheet.
James
I have not had a chance to rework my debt roll-down spreadsheet to change the discretionary income to $1.
But, let me explain my earlier MMA Payoff spreadsheet. Looking at lines 9-20, you see the money flow as presented in the original MMA overview that I cited above. You see the EXPENSES and INCOME columns which track that information. This gives you the $1000 discretionary income. The three different BALANCE column and INTEREST column values are all calculated to match the video numbers. I also determined how many days were in each month used to calculate the interest.
If you go down to the blue lines 26-37, you see that the numbers are identical to ones on 9-20. These are also calculated. You don’t see the explicit INCOME and EXPENSE columns because the calculations take the $1000 discretionary amount into account to pay down the HELOC. I tried to simplify the presentation. Even though the video only shows 12 months, there is a pattern to the transfers in lines 29, 32, & 35 that brings the HELOC balance up to $10,983.86. I simply extended this pattern until the mortgage is paid off. Once that happened, I had to pay off the HELOC.
I had a discussion with an MMA agent who claimed that the HELOC pay off would be handled such that the mortgage and HELOC would be paid off almost at the same time.
Going back to your statement about the mortgage balance being smaller in the blue MMA columns, I saw that and was trying to understand why. The mortgage interest is also smaller because the balance is smaller. That is why I created the INDEBTED column on the far right. It adds the mortgage balance and the HELOC balance together to give the total indebtedness. If you notice, this number is always higher than the BALANCE in the green columns of doing it yourself.
This is one reason why MMA doesn’t beat doing it yourself in a higher interest environment.
Thank you Jimmy. I will review your comments and spreadsheet and be back.
I get scared when I read comments that claim that mortgages are front-loaded or are calculated using compound interest. This tells me the person knows nothing about mortgages and is just parroting what ever pablum was presented to them without understanding it.
If mortgages were front-loaded, we would be paying extra interest that we did not owe, but was tacked onto our early payments. If mortgages used compound interest, that would mean that we were paying interest on our interest. Both are completely false.
Mortgages are mathematically designed to use a steady monthly payment for the term of the loan. The monthly interest is calculated first. Then, enough principal is added to the payment to make the payment the same as the previous month’s payment. This is the same as your car loan or a signature loan. In these kinds of loans, interest is calculated on arrears, that is, the money you already borrowed. That is why, when you take out a mortgage, you don’t make a payment for at least one month. You don’t owe any interest yet. The monthly interest rate is calculated by taking the yearly interest rate and dividing it by 12.
It only seems that mortgages are front-loaded because at the beginning of the mortgage, we owe the most amount of money and pay the most amount of interest. You can even the score by paying extra principal so that you pay less interest in the long run. You don’t need software to do that.
James is in “quotes”
“No, you didn’t see the software, you saw the analysis software Agents don’t go around showing the full version, just the analysis software.”
Either you are lying or he did, he said this is the actual version and then logged onto the web site and put in his passcode…..
“Wrong again. Sounds like your UFF agent didn’t understand the product if he said it was a motivational tool,”
Exactly my point, UFF agents generally don’t know much about mortgages, debt, or software. They just spout out marketing crap that they learned at UFF cult meetings.
“and in the last two years they have had 2 or 3 major upgrades to the software which allow for many more scenarios and upgrades are always free.”
And UFF still makes claims that are not true.
“Yes, once the float pays off the credit cards, the money they were spending is paying off the mortgage.”
The float only helps slightly to pay off the credit cards, in the best case scenario the float only saves $55/mo in your example. $6000 @ 11%APR = $55/mo savings.
“Is it allowing them to use the banks float to start an organized roll down when they don’t have the extra money themselves? Yes.”
Anyone can do this, and if you don’t know how it only takes 5 minutes to do. Not worth $3500.
“Additionally, now that the cash is freed up from the credit cards they can pay cash for emergency expenses or invest.”
Again the software did not do this the person did with their own money.
“How does some one rack up all that credit card debt? WhackAShill, people come to me DAILY for mortgage loans that have 15-80k worth of credit card debt. So having 25k in debt is not uncommon.”
I did not say it was uncommon, I said that these people WOULD HAVE TO CHANGE THEIR SPENDING HABBITS. Something that UFF claims they don’t have to do!!
“ They can still use their credit cards but it will show them how that effects their debt roll down on all debts, something you can not do on a simple spreadsheet.”
You can’t have it both ways, you either change your lifestyle of you don’t! For any system to work, these people have to CHANGE THEIR LIFESTYLE. By saying that you don’t, agents make the software seem like a magic pill. It’s an outright lie and you can’t get around that no matter how you spin it!
-WhackAShill-
James,
You keep saying that your mortgage is paid off in 148 months compared to my 150 months. OK. I will be glad to model a HELOC payoff if you tell me what interest rate to use. I never try to model MMA since I don’t know how it works.
JimmyDaGeek,
In your 6 CC debt paydown spreadsheet, I noticed the extra payment going to the mortgage after all the other payments have been paid off is only $1,230.03 (120 * 6 + 510.03). Shouldn’t the 50$ be in there also?
-L2G
As far as 148 vs 150 goes, I could care less about the fastest or slowest time to pay off the debts. What I care about is 110,966 in interest payments versus James’s MMA analysis quote of 122,309.
James, is there anyway to show the first few months of actual payments for your 6 CC, car, mortgage analysis?
Late2Game
You are right. I corrected the spreadsheet. James is not going to be to happy. Even less interest is paid and the payoff is in 148 months.
As Dr Fronkenshtein said to Igor: “Damn your eyes!”
Even a hand picked scenario by a UFF agent shows no financial benefit to using the software over doing it yourself. Well done Geek and Late2Game.
Indeed. I’m just getting back to this thread after a hellish few days, to find Jimmy and friends have already done my homework for me. Thanks, guys.
Jimmy, can you please post the corrected HELOC spreadsheet and the corrected debt roll down sheet showing the $1 so I can look at them? Or did you just make the changes and the same link works?
WhackAShill, he/she logged in and showed you the analysis software only. You can not loggin and see the entire version even today. That is done with the client on the phone during the setup phase of the software. BTW, like a refinance, you have a 3 day right of recesion on the software if you don’t like it or feel it’s not for you.
I can’t comment on your UFF agent or their background and their lack of understanding of the system or their inability to communicate the priciples to you. I can comment on the many ignorant loan officers, attorneys, and Realtors I have met over the last 26 years in the mortgage business. Sorry you had a bad experience with him/her. BTW, what do you do for a living and why didn’t you put your email address or website when you click on your name?
The float only saves $55? Please show the math then. Actually, WhackAShill, the new software does do it for them. It does all the calculations and auto pays all of the debts via their online banking system in order they need to be paid on the date they need to be paid in order to maximize interest cancellation.
How are the clients in my example changing their spending habits? They are already spending everything they have except $1. WhackAShill, no one has to spin anything.
Why do you care about any of this and why are you so obsessed with this calling people names? You remind me of the insurance agents from the early 80′s who got mad at the AL Williams organization for replacing all of their crummy universal life and whole life policies….
PS. And WhackAShill, I am not done yet. I still have not seen the “corrected” spreadsheets Jimmy and Late2theGame are providing. I will comment on them after I have had chance to review them.
James,
It is the same one as before. Here it is linked so you don’t have to scroll up:
http://spreadsheets.google.com/pub?key=pszjmlNnSFKizFsBPXtHbQA
-L2G
Also,
I quickly through together a spreadsheet using Excel’s Loan Amortization template. I assumed a $0 discrectionary income instead of $50. When each of the credit card debts were paid off after 42 months, I applied those payments ($120 * 6) to the mortgage. When the car was finished being paid off after 72 months, I added the $510.03 also to the mortgage.
Here is a google doc of it:
http://spreadsheets.google.com/pub?key=pRGtatNXs6xryA7RqWhcZcQ
In the upper right corner, you can see, even paying the minimums on the car & cc debts (worst case scenario), it still only costs $113,789 in interest versus your example $122,309.41.
I don’t know what your MMA is doing to add that much interest to the analysis. Cash advances from the cc’s to pay the mortgage or car loan?
-L2G
James
If you read a couple of posts above, I corrected the spreadsheet for a mistake I made. It now takes 148 months to pay off everything. You use the same link to see the spreadsheet. You asked about changing the $50 discretionary income to $1. I was going to work on that, but seeing the 2 month payoff improvement I got by correcting my mistake, I can unequivocally say that if I change the discretionary income to $1, it would set things back by at least 6 months. If you say that the MMA estimate barely changes, fine. I have no idea how MMA does anything. But I do know how to pay down debt without software and I do not believe you get a return on your $3500 investment.
Looking at your orignal spread sheet with the guy with no credit cards, 6% 200k loan and $1000 disposable and 8.6% HELOC I did find a major error I think.
If I am reading it right, you immediately took 11k+- out of the line of credit the first month. First question is why 11k? By immediately taking out this amount you are making it impossible for the guy to cancel the interest.
I still don’t see where you are depositing the 5k of his salary into the HELOC to off set the interest. Where is that? Even with 11k as the balance and using 5k the numbers would not be as high as you have them.
What amortization period are you using for the HELOC?
James said,
**If I am reading it right, you immediately took 11k+- out of the line of credit the first month. First question is why 11k? **
Did you read his post earlier? That transfer is directly from UFF’s example video, also linked earlier. And is also represented “debtfree” website (an Agent’s site) showing the exact same thing as UFF’s example video. Scroll up and read and click through the links to follow. If you think that is “wrong”, then you will have to take that up with UFF. Your instincts are correct that this is a large amount to move from the HELOC. The example pays 8.6% (or 8.57%) on the ave. daily balance, which UFF’s own example video keeps at about 9,000 to 11,000 for any given month in the first 12 they showed.
Also, if you read JimmyDaGeeks post, he explains what is happening with the 5000 income. He also typed it out in the spreadsheet, “This MMA example assumes that all transactions are done on the first day of the month” to simplify the transactions. (Side note: I read in that fatwallet thread that even optimal timing, income in early in the month, payments on last day of the month, still doesn’t add up to what many think it does.)
What is interesting, is this, and JimmyDaGeek can verify his calculations against the UFF example video:
The average daily balance in the HELOC for month (10,617.73) is EXACTLY equal to (11,983.86-5000+4000) OR (10,983.86) multiplied by 29 and divided by 30. What this means is $0 for one day of the month, all the transfers on the second day of the month, and kept at that level for all others. You can check that on your trusty HP 12C. So if the HELOC interest is 75.05, as shown in the video, then the UFF example is not even showing the “optimal” timing that many people claim make all the difference with MMA vs. DIY.
James said:
“WhackAShill, he/she logged in and showed you the analysis software only.”
Wrong again, the agent logged into his very own account, showing how UFF was working for him. (I then showed him how he could easily replicate what the UFF software was doing and came out $10,000 ahead of UFF software because $3500 was not needed for doing it yourself)
“You can not loggin and see the entire version even today. That is done with the client on the phone during the setup phase of the software. BTW, like a refinance, you have a 3 day right of recesion on the software if you don’t like it or feel it’s not for you.”
The 3 day right of rescission is a government law, not a perk of UFF. The money back guarantee would be a perk if it were true, looking at the Better Business Burro record, it would appear difficult to actually get your money back from UFF.
“I can’t comment on your UFF agent or their background and their lack of understanding of the system or their inability to communicate the priciples to you. I can comment on the many ignorant loan officers, attorneys, and Realtors I have met over the last 26 years in the mortgage business. Sorry you had a bad experience with him/her.”
It was not a bad experience, I enlightened him as to what he was actually selling.
He had no idea that one could easily replicate the software for free, or that the lies that UFF taught him were untrue.
“BTW, what do you do for a living and why didn’t you put your email address or website when you click on your name?”
I work for a real estate development company which my family owns, we also own eight real estate offices, a mortgage company, and a title company. I don’t link any of our sites because unlike you, I am not trying to sell anything here.
“The float only saves $55? Please show the math then.”
If the salary was $6000/mo you can at best cancel that much interest on the credit card. In your example you state 11% interest on the card. That’s $660/yr or $55/mo.
“ Actually, WhackAShill, the new software does do it for them. It does all the calculations and auto pays all of the debts via their online banking system in order they need to be paid on the date they need to be paid in order to maximize interest cancellation.”
You can do this yourself by calling your creditors and setting up direct payment from your account.
“How are the clients in my example changing their spending habits? They are already spending everything they have except $1.”
Obviously they were spending more than everything because their credit cards were racked up, how else do you explain the credit card debt?
“WhackAShill, no one has to spin anything.”
That’s exactly what UFF does, they spin old concepts and try to make them new again.
“Why do you care about any of this and why are you so obsessed with this calling people names?”
I don’t like scams, but I find them interesting to read about and comment on. I haven’t called anyone something that they are not.
“You remind me of the insurance agents from the early 80’s who got mad at the AL Williams organization for replacing all of their crummy universal life and whole life policies….”
You remind me of those mortgage brokers who are indicted in fraud suits across the nation.
“PS. And WhackAShill, I am not done yet. I still have not seen the “corrected” spreadsheets Jimmy and Late2theGame are providing. I will comment on them after I have had chance to review them.”
Typical narcissist, you’re always right, right? Not willing to accept anyone’s factual conclusions.
Whackashill,
You said you work for real estate development company your family owns, also you own eight real estate offices, mortgage company, and title company. And you don’t link any of your sites because you are not trying to sell something. Excuse my thinking if it is wrong, but I could also use anonymous name and tell you I am a mortgage finance expert with many years of experience and many finance degrees and I own several investment firms with thousands of employees. But with just a strange screen name and telling people that how can we know this is factual? I clicked on James Barnes and he has mortgage company with location and address. Since you are not selling can you give location and address of your family businesses, or website so everyone can see them to show you are factual.
Sorry I came late to the discussion. I downloaded the “MMA Challenge.pdf”. I missed these values in the .pdf document. I’m intrigued by the challange.
What interest rate or term does the GMAC debt have?
What interest was assumed for the LOC?
Whoz
Why would I have to lie about that? I’m not trying to sell anything? I’ve linked our R/E office page for your pleasure.
Speaking of doing things yourself but choosing to rely on services that make life easier…Hiring a Real Estate Agent falls into that category! That is a service that you are backed into a corner to use since everyone else is! I guess that is a SCAM also.
And they charge 3x more then the Money Merge Account Software and do very little for you. And that happens over and over again. Not just a one time fee!
Whackashill,
I don’t understand lot of what James Barnes says, and probably I don’t agree with it all, but I know who he is for his website link. You gave a link, but that does not tell me that you are the one who owns or works for these. I can send you a link of something and say I own or work for it too. I don’t see that this is factual. What I want to know is if this will help me pay off my mortgage faster. I wish to hear from someone maybe who uses the system, not from someone who doesn’t use it and tells me it won’t work. If I try to find good dentist I want to hear from someone who uses one, not from someone who says he’s no good, but has never used him.
Bonhoeffer – As an impartial observer with no vested interest, I understand your logic but think that it’s flawed. You’re focusing on the messenger rather than the message. You can look at the arguments from both sides, both for and against the system, and decide based on that… it shouldn’t matter who James Barnes is, who Whackashill is, or who I am – the system should be analyzed on its merits.
I don’t have to prove legitimacy for anyone, again, I am not selling anything here.
If people want to sell their house themselves thats fine, I don’t have a problem with that.
UFF makes claims that simply are not true, that is why it is a scam. The large fee that UFF charges is the direct cause of why the software does not do as well as doing it yourself.
Jim,
I could not agree more. That’s why I like to hear from someone who has used the system. I don’t care who someone else is, but when they put it on their post like Whackashill did to make a point about how they are legitimate I think it’s not relevant because it doesn’t mean anything, whether they are selling something or not.
Bonhoeffer – In the case of a system like this where the numbers are out there in the open, I think you can take the analysis by someone who hasn’t used the system. I believe it makes no difference whether you’ve actually made payments or set up the software or paid the fees to know whether the system works because it’s all in the numbers, right? I mean at the end of the day, you want to know that if you do steps 1, 2, and 3 then you will shave years off your mortgage. If that’s true, the numbers should show that.
In the case of WhackAShill, it sounds like he sat down with someone who explained the system, showed him the software, and he came away thinking it was a bad idea and a waste of money. That’s about as close as you’ll get, anyone who uses the system likely wouldn’t be as forthright because of pride. It’s hard to say you spend thousands on a system that didn’t work.
I does not seem that you are impartial observer, Jim. I know many people who have spent money on something and are not shy to say how they are very unhappy about what they bought if it did not perform as they thought it would. So I do not agree anyone who uses system will not be honest because of pride. Have you ever looked at discussion boards from people who have bought cars? They made a big investment and if they don’t like it they are not shy to say so.
I think someone who just sat down with a person who explained system and then decided it was a bad idea and waste of money would not use the name Whackashill. Then when you click his name Wikipedia definition of shill comes up, before he changed it to link with Coldwell Banker website. That would make everything else he says hard to believe because it looks like someone who wants to make other people look like shills instead of someone who looks at numbers and decides the system does not work. Jim, as you said it shouldn’t matter who Whackashill is, or who anyone else is, the system should be analyzed on its merits. So why does not someone do that instead of accusing someone else who does not agree as being shill? Maybe I ask for too much. Excuse my thinking if I am wrong.
Scott,
GMAC: $30,000 72 month loan @ 6.9%
6 CC’s each with $4,166 @ 11%
Mort.: $200,000 30 year @ 6%
$50 disposable income (in addition to the minimum payments to the above debts).
All are shown in JimmyDaGeek’s googledocs spreadsheet.
Bonhoeffer
Seems like you are hot to buy MMA or something like it. I am just a numbers guy who was looking for a way to pay off my brand new mortgage. I read about MMA and investigated it. I never heard about the HELOC idea before. Once I worked it all out, I realized that if I was going to pay my mortgage down, I didn’t need a program, just discipline and “discretionary income”.
What is it that you want to do with your spare cash? Each use you asked about implies completely contradictory needs. Are you looking for retirement income, long-term investment, emergency cash, short-term investment, etc?
If you pay down your mortgage, your money is locked up in your house and you can’t get it out without borrowing against. If put it into a savings account, you get immediate access to it, but not much interest. If you put it into a CD, you can get a somewhat higher interest rate, but pay a small penalty to get your money. If you want retirement income, put your money into a Roth IRA, if you qualify. One bonus is that you can withdraw your contributions (not the returns) at any time.
And, finally, if you are interested in paying down your mortgage, in the current low-interest environment, borrowing a lump-sum from a HELOC and putting it against your mortgage will work, as long as the interest rate is below your mortgage rate. The most efficient strategy is to keep all your money in a good interest-paying account and use that $900 to pay the mortgage down directly, without running it through a HELOC. If you don’t have emergency cash, you will need the HELOC as a backup.
JimmyDaGeek says,
“And, finally, if you are interested in paying down your mortgage, in the current low-interest environment, borrowing a lump-sum from a HELOC and putting it against your mortgage will work, as long as the interest rate is below your mortgage rate. ”
You still don’t get the system/premise do you? It doesn’t matter at all if the HELOC you are borrowing on has a higher interest rate than your fixed rate home mortgage. Like I said before, instead of comparing interest rates, compare dollars of interest!
Its not about borrowing from the HELOC to pay down your mortgage. That alone doesn’t work. You have to deposit your paychecks into the HELOC to help keep the DOLLARS of interest as low as you can. If you are able to borrow money from the HELOC and then apply it to your mortgage, as long as the interest cost in DOLLARS on the HELOC is less than the total interest you would pay on your loan for the month you are saving money!
I just don’t get why you all want to try and play out all these senarios and use spreadsheets to predict everything. All you really have to do is see if you can borrow the money to pay down your mortage and at the same time save yourself interest, which amounts to paying you home loan off sooner! If you can do this, then the sytem works! If you can’t then don’t buy the software!
Scott,
If you work it backwards, you discover the GMAC interest rate is 6.9% for 72 months. Nothing more was given about the HELOC interest rate. As such, I simply modeled a debt snowball. This equaled the payoff time for MMA and reduced the interest rate cost by $10,000. The spreadsheet link is mentioned above. If I had rolled the 11% credit card debt into a lower-rate HELOC, the interest rate savings would be that much greater.
mma user
You are right. As long as your take-home pay reduces the overall HELOC balance during the month, it is possible to save interest. The question is: “How much?” Based on MMA’s own video, they keep too much money in the HELOC, *costing* you interest, not saving interest. In this lower-interest rate environment, it actually makes sense to borrow money once from the HELOC and never pay it down, as long as your mortgage rate is greater than the HELOC interest rate.
I also know that I don’t have to go through all the gyrations of running my budget through a HELOC. I can simply keep my money in a good savings account, using the interest to help pay the mortgage down.
So…. how about posting your numbers. I just need 3 pieces of information from the last 6 months or for as long as you have been using the system:
- Your average monthly take home pay
- Your average daily HELOC balance
- Your average monthly HELOC interest rate
And, if you are really adventurous, how about telling us about your mortgage: balance, term, payment, and interest rate. Plus what your MMA projected discretionary income and payoff term is.
MMA software User:
“You still don’t get the system/premise do you? It doesn’t matter at all if the HELOC you are borrowing on has a higher interest rate than your fixed rate home mortgage. Like I said before, instead of comparing interest rates, compare dollars of interest!”
I agree you should look at dollars of interest. The problem is, in almost all scenarios, the HELOC shuffle does not save enough money to cover the software cost and sometimes costs the user more money by using the HELOC. Therefore all your left with is an expensive motivational tool.
Because of the UFF presentation, and the claims that you do not have to change your lifestyle, most of the people that buy the software are led to believe that the HELOC is saving them much more than it actually is (many agents themselves do not realize this fallacy).
For the above stated reasons, several hundreds of people on dozens of web sites have called this product a scam.
The anonymous above was from me. Sorry I forgot to put in my details. I still cannot know why WhakAShill wants to make everybody a shill if he does not agree with him, then say he owns many Coldwell Banker firms. How would he prove that and what difference does it make and why does he use name WhakAShill? JimmyDaGeek please explain what you mean that each use implies completely contradictory needs. Sorry but I do not understand what you mean. I am not hot to buy anything unless it helps me. Also, where is $900 you are talking about?
Bonhoeffer,
This forum is not about me or what my family owns or what business I’m in. It is about the UFF product and its uselessness. The moment the math results were in, you have turned the focus from math to credibility.
It is your inability to accept the math that makes you look like a shill, someone who claims no affiliation of a product, yet has some sort of stake in it.
If you truly have no stake in the product, or even if you do, I urge you to look over the dozens of web sites that explain how this product is a scam. The thousands of posts on various web sites should help you better understand why so many call it a scam.