Real Estate Investing Forums

Real Estate Investing => Financing, Hard Money Lenders, Private Money => Topic started by: Mackie on October 23, 2006, 09:28:05 am

Title: Money Merge Accounts - scam or for real?
Post by: Mackie on October 23, 2006, 09:28:05 am
Hi,

Has anyone heard of a Money Merge Account.  It is presented as a way to pay down your primary mortgage through an equity line of credit, taking the upside of a simple interest calculation v. compound interest.  Just curious if it was a scam?

(It is an interest cancellation account which is an open-ended loan, typically known as a Home Equity Line of Credit or HELOC. This account is in a 2nd lien position on your primary residence, has an interest only payment option, has a variable rate and allows unlimited check writing and bill paying from the account).
Title: Re:Money Merge Accounts - scam or for real?
Post by: REI4ROI on October 23, 2006, 12:24:11 pm
It sounds similar to a program I am familar with called a 1st trust deed HELOC.  

It allows one to incorporate their savings/checking/payroll into their mortgage, thus allowing for:

a.  A lower lifetime accrued mortgage interest repayment amount.  
b.  Pay off your mortgage sooner without any change in current spending.
c.  Unlock your equity/gain access to equity without the need to refinance (great for seed money for you investor types).  

Now what they don't tell you:

a.  You must have a high FICO score to qualify (mid 700s)
b.  As you pay your expenses every month, your mortgage balance increases as your income is no longer solely dedicated to mortgage reduction.  
c.  As with any open credit type arrangement, your credit scores will be impacted.  
d.  Interest rates for the 1st trust deed HELOC are higher then a traditional HELOC.  

I like the product, but suggest anyone that is considering it have an analysis prepared based upon both current income and monthly outlay (debt repayment), so as to recieve a accurate projection of how this loan program can benefit you.  
Title: Re:Money Merge Accounts - scam or for real?
Post by: Jaime Buckley on October 30, 2006, 09:52:45 am
I am a client AND an agent for the Money Merge Account.

No, friend, this is not a scam...and it's nothing new in concept...however, if I understood the last post correctly, there  are differences between the MMA and the 1st Trust Deed HELOC as decribed above.

1) The HELOC we use is a second position (your virtual second mortgage).
2) Your principle continues to lower, not rise, as you use the MMA as your primary checking account.
3) We work with people with FICO asd low as 600.
4) We have specific online software that puts us light years ahead of the other so-called competitors, and making our Program far more user friendly and "do-able" for the Average American.
5) At the end of the payoff, all balances are at ZERO (mortgage, other debts AND HELOC), you have Title in hand and are out of debt.

My personal mortgage had 29 years left. I'll pay off my home now, in 8 years, be out of debt and save $109,000 in interest.

Jaime Buckley
Title: Re:Money Merge Accounts - scam or for real?
Post by: 71tr on October 30, 2006, 05:13:24 pm
This is a very interesting concept and obviously not something that most consumers are familiar with and hence in need of reassurance.  As for paying $3,500 for software to analyze this scenario I think that is money better spent elsewhere.  With a little skill a good excel spreadsheet will accomplish the same analysis.  The key is to getting your assumptions right; what is your net savings each month that will go to heloc paydown, how often does the heloc adjust, is there a lifetime cap on the heloc etc.  Also, I would be curious how it works in practice.  For instance when filling out a financial statement for that next mortgage loan application you will show limited liquid assets unless you are directing some funds to a non-heloc paydown account.  But of course net worth is called net worth for a reason.
Title: Re:Money Merge Accounts - scam or for real?
Post by: Jaime Buckley on October 30, 2006, 07:55:40 pm
Quote
This is a very interesting concept and obviously not something that most consumers are familiar with and hence in need of reassurance.  As for paying $3,500 for software to analyze this scenario I think that is money better spent elsewhere.  With a little skill a good excel spreadsheet will accomplish the same analysis.

Uh, no.

The software is specific, and for the record, we have had a math professor from a University, a math professor from a community college and bean counters up the wazoo, challenge this software.

They didn't come close.

The University Professor came the closest, and our program saved him $90,000 more in interest. So, no offense intended...but you and the average America ain't gonna get it with Excel.

This software takes into account every variable we don't. It gives a visual dashboard and instantly calculates every change you make with money from all sources, in and out...and you can run scenarios on how any item you buy will impact the payoff of your mortgage. Even what the impact weekly Starbucks coffee has on your mortgage. That's not a joke.

Use Excel and get the same results? Uh, no.

However, that also hits another point, and that is simply cost vs value. If I come to the average person here, someone who ISN'T disciplined, who WON"T follow their own plan, and show them we can save them at least $50,000 and cut their mortgage time in half...where's the cost?

I helped my retired uncle Bob (career Military) to get on the MMA Program, with his Interest Only loan. How soon do you pay off on interest only?

...but Bob will pay off the home in 8 years. Plus I saved him $265,000 in interest.

Where's the cost? You pay $3500 and cut out $265K and 22 years...or pay nothing and PAY $265K and wait 22 extra years.

Hmmm....how long do I have to answer?

There is absolutely no comparrison to this software, and I can flat out tell you...you WON'T get the same results on your own. You go ahead and use your spread sheets, but you'll do anything BUT "excel".

But hey--it's your money ;)
Title: Re:Money Merge Accounts - scam or for real?
Post by: 71tr on October 30, 2006, 09:08:22 pm
Here's your answer.

I think you missed the point.  I'm not challenging the value of the merged-account concept.  I think its a real innovative product.  But why should I spend $3,500 for your dashboard to understand how many months I add to my mortgage because I like my moca-grande every day?  Sure that's interesting but does it add value to the core concept of managing your finances in a different manner?  

Instead I spent 20 minutes in excel comparing my current mortgage to a merged account HELOC, adjusting interest rates and savings assumptions.  In the end it was obvious I could save a ton of money in a program like this and the basic concept of the more I save the less I'll spend on interest was readily grasped.  

So why spend $3,500 to offset the cost of your slick dashboard?  Instead I'll reap the same rewards for making the same decision and I can pocket the $3,500 and spend it on Starbucks.  There's your cost.

Title: Re:Money Merge Accounts - scam or for real?
Post by: Jaime Buckley on October 30, 2006, 11:14:49 pm
No, I didn't miss your point. I think you're missing mine.

The $3500 is for so much more than just software...it includes ongoing support as well.

But let's get back to the software alone...

Fine---you use Excel. You spend all that time, and adjust with each and every purchase you make. The bills you have, when you pay them, when interest rates change, you can then sit down and calculate all the daily fluxuations of the average daily balance of your open interest HELOC...then you have to take into account when to use the funds. I'm not talking about once per month, or even once per week...but calculate it anew each and every day. On excel, you're going to 'best guess' on a great deal, and then pray to the powers that be that life doesn't change on you and screw up your numbers.

This includes all the fluxuations in your spending habits, making a specific plan, then sticking to that plan. Now, if you ask ANY financial planner, when they make the very best plans in the world for their clients to save and develop a giant nest egg....what's the #1 problem they face?

People simply don't follow the plan.

...so where does that leave the average American?

Where does that leave the single mom, the janitor, the old folks on social security and the simple minded working man who has more on their minds than trying to figure out math on an excel sheet?? Someone like ME, who couldn't do the math equations if my life depended on it? The answer sure doesn't lie in an Excel spreadsheet, i can tell you that.

You keep talking about YOU. I'm asking you about OTHER people.

You say you can do it--fine. I don't believe it in the least--but hey, that's not my call to make. I can say what works for me, and what's working for my clients.

Now, I have software, which i know from my actual experience, will run circles around your personal assumptions, and takes into account all of the calculations that you will miss (I said "will", not might, BTW). Why? Because you're human, you have bad days, you make mistakes, and the list will go on as your life changes. You will have to adjust with every change you make and recalculate.

With my MMA software, I won't.

If you have the knowledge and the sheer discipline and the advanced math skills...you're a smarter person than me.

...but where does that leave me, and people like ME!?

Screwed. That's where.

You will make, how did you put it? "Saving assumptions"...while I go on, live my life EXACTLY as it is right now, and my "software" calculates on actual facts, and shows me a 90 day window into the future...something that changes with every minute deatail of my life.

Is there value in that $3500? There is for me.

That's why I use it...and why I'm happy being a client.

I can't do any more for you, than to say I openly challenge you to bring your excel spreadsheet, give me a call, and let's compare apples to apples. If I'm wrong, hey---you're awesome, and I'll apologize.

I have done enough of these numbers with the analysis software to know that it's value is undisputed, and when I tell a woman she's going to pay off her 40 YEAR MORTGAGE in 6.4 years...she found $3500 to be nothing more than a formality to get to her personal website.

Oh, and about that Starbucks coffee. Let me clear your sinuses:

There is a client, who wanted to buy a new outfit, for $250. She wasn't sure about if she wanted it bad enough, so she plugged the figure into her account, to see if it had an affect on her mortgage. Well, she saw that it added a whole month onto her mortgage.

Now, you may think that of little consequence, but she told me flat out, "I wasn't sure the outfit was worth $250, but I knew it sure wasn't worth $1800 (the cost of a month of her mortgage payment), so I didn't get the outfit."

When you calculate all the extra money you spend on that Starbucks coffee, and use it as discretionary income with the MMA, you find that it's very addicting to actually change the way you work and use money to get the greatest effect.

When people have an actual visual meter that shows them the instant results of each and decision they make...that's a powerful motivator. I dare say, much more powerful than a spreadsheet.

With over a 95% success rating with clients, and over 80% of that percentage doing 20% better than initially predicted...you're finding yourself on sandy ground my friend.

You WILL save money if you simply use these principles. No doubt about it. Gte a HELOC and do it on your own. You'll out do a bi-weekly by far. However, you won't catch the rest of us using the MMA software, plain and simple. If you don't believ it...you simply don't understand it yet.

Do more research.

Again, grab your spreadsheet and call me. Let's do the numbers and see how good you actually are with your math and calculations.

I quiver with anticipation.

Jaime Buckley
Title: Re:Money Merge Accounts - scam or for real?
Post by: christopher w on October 31, 2006, 09:44:28 am
Jaime,

You make some very valid points. However there are a lot of VERY smart people out there who are making valid points against EVER paying off your mortgage. The interest and taxes on your home are your biggest protection against income taxes. For example in eight years when your mortgage is paid off what tax write-offs will you have? Maybe not you specifically because obviously you have a business you are running and will always have write-offs, but the average person as you were discussing earlier? Especially as the average person gets older and they start withdrawing from their retirement accounts. With no interest to offset the taxes on those funds the average person is going to get walloped with taxes. Would it not better to pay as little as possible on your home, and save that extra money in a side account that is actually earning you interest on your money? As well as still giving you a significant tax write-off at the end of the year? In the right investment vehicle such as investment grade life insurance it is a much better way to go. Especially when you consider that equity in your house is NOT liquid, and earns you 0% interest. To be honest it would be safer to bury in your backyard than to pay-off your home because at least in case of emergency you would have access to it. I am not attacking your software or your ideas, but just proposing a different way of looking at things. The idea of paying off your home ASAP is the great depression way of thinking still rearing its ugly head. We are in the new millinium now. Time to start looking at new ideas. There is a book out there called "Missed Fortune" by Douglas Andrew. It explains all of these ideas in detail. You may want to pick up a copy. Your software is pretty cool though.
Title: Re:Money Merge Accounts - scam or for real?
Post by: Jaime Buckley on October 31, 2006, 10:24:50 am
Christopher, I could not disagree with you more.

I don't think this is the Great Depression talking in any form, my friend. This is good, solid sense ( I wish I could say 'common', but I'm seeing it's anything but...).

...I think you just have to take it a step further.

Ok, let's take your points into consideration, such as the tax write off's and the like.

If we empower the "average American" to pay off their home in a fraction of them time, and have now, in fact, shown them to pay off TWO TO FIVE houses in the same amount of time, using the same income...what do you think those same 'smart' people would do?

This is not a matter of isolating someone and saying, "Hey, I got my house paid off....uh, what now?"
It's a matter of EMPOWERING people, and giving them options for the fututre.

The difference between my way of thinking and yours, is that I would have a far greater backup, and be beholden to no one, it can be accomplished with my everyday paycheck and with ZERO risk.
I can then go and use that same method and that same HELOC (or set one up on a second property), have my home free and clear and BECOME THE BANK! ...all the while, my beautiful little software shows me the way, guiding me to the fastest payoff possible on my new investments, and scooting me onto the next.

Yes, the software is transferable.

You need that tax break? Buy another home...buy two, buy a dozen. In the meantime, you have YOUR home, your personal haven, free and clear, regardless of the rocky road ahead, and you now have the tools to be debt free and aquire wealth. Not just the rich people mind you...but the every day WORKING MAN.

That's not foolishness, that's REAL power my friend.

"Walloped with taxes"??? What happened to all the money they have because they don't have a mortgage?

Being in debt, for any reason, is simple, straight forward stupidity. I'm truly shocked at any of you actually promoting financial bondage...

This is a new idea...for Americans.
That's why Australians pay on average, $100K-$150K less in interest on the same size loan as we do.

There is not a single person out there that could convince me, or any right thinking individual, that debt is ever a good thing. Once you have the actual freedom to make your own choices, the world of opportunity is SO open to you. Your line of thinking simply doesn't make sense in comparrison.

There's a better way.
Title: Re:Money Merge Accounts - scam or for real?
Post by: christopher w on October 31, 2006, 11:06:17 am
Jaime,

There is good debt and bad debt. Using your house as an investment vehicle IS the smart way to go, but I have to disagree with you regarding paying it off. There are just too many tax advantages to having a mortgage on your home. Harvesting equity from your home every couple of years and investing that money wisely is the new way of thinking. Think of it like this...Your refinance a cash-out at 6.5%. You pull out 10K and start investing it safely at 6%. If you are the average person you are in the 33% tax bracket which means your rate is actually clost to 4.29% after you calculate in all your tax benefits. Now you have that 10K working for you at 6% meaning you are earning an additional 1.71% compounding annually. This is how banks do it; it is called arbitrage. As opposed to having your house free and clear, but earning 0% interest on your money, as well as having no tax benefits. Your house will continue to rise in value whether you own it free and clear or have it mortgaged to the hilt. Eventually your side investment account will grow to the point of equaling your mortgage balance and you will have that money liquid so if you choose to pay-off the house you can just write a check to your bank. Not to mention what if you lose your job or have an extreme emergency how long will it take you to access the money in your free and clear home? It could take weeks. Banks don't loan money to people who NEED it; they loan it to people who DON't need it. Owning a free and clear home fails all the tests of a good investment. Not liquid. Not easily accessible. No rate of return. Also, there is a piece of software out there called the mortgage coach will will do almost exactly what your software will do and it only costs $799.00.  Once again this is not a personal attack just an opposing point of view.
Title: Re:Money Merge Accounts - scam or for real?
Post by: Jaime Buckley on October 31, 2006, 01:01:14 pm
I still don't agree.

As I said---buy a second home, you now have the cushion, and the safety of your own home, and you have all the equity as an investment.

You don't get it Christopher...why won't I have access to my money from my home? I pay it off, and raise the limit of my HELOC, and now I'm the Bank and move onto my second property.
I have 100% access to what money I need, and onec I have paid off the second, have an even greater amount to work with in much shorter time frames than what your describing.

But I'm out of debt.

I disagree completely. There is no such thing as good debt.

Let's agree on something here on this thread, ok?
I can't say that I honestly know about your software, and you don't know about mine. I'm a client using what I'm talking about...are you a client using the other? If so, I can see why you want to talk about it,...but how do you get the comparrison? Where are any of us actually able to say one is better than another, unless one of us has used both programs being talked about?

I'm blaming myself now, for some comments above. I should have responded better and with more respect, so I apologize for doing some comparrisons myself. However, I have comparred to mortgage calculators, and I have comparred to excel spreadsheets. I have NOT, I admit, compared to your software program mentioned.

Have you actually used the MMA software? ...and if not, how can you make such claims?

Either way, how about we simply talk concepts and stop the wizzing contest when neither of us can actually make claims that one is better than the other when all we know is what we're pushin, eh?

Thanks for the conversation, and I fully respect your point of views and choices in your debt. I simply agree to disagree completely  ;)
Title: Re:Money Merge Accounts - scam or for real?
Post by: Rancho Funding on November 09, 2006, 02:53:21 pm
I feel compelled to chime in on this conversation. The first post starting this conversation is on the CMG Home Ownership Accelerator. I am the resident expert on this program and have knowledge of all the 3rd party software as well. You can find an article from Yahoo finance written by Don Taylor PHD.

While everyone here understands the concept of banking out of your mortgage allow me to elaborate on how the Home Ownership Accelerator sets itself apart.

First it streamlines the ability to get your money in and out of the account. With direct deposit you save yourself money the day you get paid vs. a 1 day hold every payday for the MMA. It is a single account therefore when you write checks or pay bills the money stays in your account until the day it is cashed. GMAC is the backer and has supercharged this program with unlimited checks, ACH in/out transfers, pos charges, MasterCard, ATM(first 8 fees refunded), and direct deposit.

By banking out of a first trust deed HELOC you do are never tying a certain amount of money up as you are with the MMA account paying payments on a conventional 1st mortgage. This allows you to maximize the benefits of banking out of your mortgage and continue outside investments.
This allows you to maximize you interest deduction such as described in the book "Missed Fortune" by Douglas Andrew.

Title: Re:Money Merge Accounts - scam or for real?
Post by: Rich_in_CT on November 09, 2006, 03:12:26 pm
Why do I feel like this is a sales pitch and not an informational post?  I've got $5 that says Jamie and Rancho have slicked back hair and have each been fired from at least one used car lot..... ::)
Title: Re:Money Merge Accounts - scam or for real?
Post by: Jaime Buckley on November 09, 2006, 04:14:22 pm
 ;D LOL Rich...

Never worked in a car lot. I'm a family man, have 9 kids and make comic books for a living.

So, do you want an address to send that $5?

 ;)
Title: Re:Money Merge Accounts - scam or for real?
Post by: Rancho Funding on November 09, 2006, 06:34:38 pm
Same here. Never worked in a car lot, new or used. I am a Marine Corps veteran who served in two wars overseas. Now currently I am a licenced Real Estate Salesperson and Mortgage Broker.

You can keep my $5 and put it towards your principle on your mortgage.
Title: Re:Money Merge Accounts - scam or for real?
Post by: Rancho Funding on November 09, 2006, 06:49:30 pm
Jamie,

I did just notice something that I must have overlooked last time.

"I disagree completely. There is no such thing as good debt.

Let's agree on something here on this thread, ok?"

I recommend you read the book "Missed Fortune" by Douglas Andrew. To summarize the book Douglas points out that available equity in your home is doing nothing for you. If you can take that equity in the form of a tax deductible mortgage and reinvest it at the exact same rate as your mortgage you can become a millionaire off the interest. Nonsense? Well if your mortgage rate is 6%, the average American is really only paying 4% because of the $1 for $3 tax deductible rule. Therefore if you reinvest as Douglas Andrew recommends into TAX FREE investments such as Universal Life at 6% you will clear 2% on any possible equity you have year after year. If you have $200,000 worth of equity and you make 2% interest on it tax free for 30 years what would that make you. This is just an example. Many clients I have helped have seen Universal life returns averaging around 8-9%.

The catch:
Only acquisition costs of mortgage interest are tax deductible and/or +$100,000 Home Equity loan up to $1,000,0000 financing. Acquisition costs are reduced every time you pay a principle payment. That means if you pay your purchase money mortgage of $200,000 down to $20,000, even if you take a cash out loan of $200,000 years later you can only legally deduct $120,000 worth of the interest.

For more information I again recommend reading "Missed Fortune" or "Missed Fortune 101"  both by Douglas Andrew.

Disclaimer: I am a licensed mortgage professional but all information is generic. Please contact your tax advisor for specific information and advice.
Title: Re:Money Merge Accounts - scam or for real?
Post by: Jaime Buckley on November 09, 2006, 07:23:25 pm
LOL. Rancho, I still don't agree.

Simple reason is--I am still exposing myself to an "investment".
So, what happens if the rates change? What happens to me and my home, now that I have taken all of my saved stability out of the home, and this investment goes belly up?

Can you actually guarantee that i won't lose my money?

Now, if you have, say a rental property...I could see that being a possibility. I still wouldn't do it personally, but I could stomach seeing someone else do it. However, if you're talking about taking MY home to do that?

Absolutely not.

It doesn't matter who the author is, the 'principles' are not sound. Debt...is debt. Plain and simple.
The fact that the equity in my home is GETTING ME OUT OF BONDAGE...it's doing far more for me, that your investments are for you. Now, if you have successfully done your investment, made a ton and gotten out of debt...hoorah. You were lucky.

But let's see how long this all goes on before we start hearing rumors of investments going bad and agents being sued by their clients. Your options are not based on sound principles...they are based on risk, chance, the stability of society and greed. We live in a society of 'gotta have it now' and instant gratification. That's why i know you'll get many clients with your suggestions...just not mine.

I teach people to use what they have, get out of debt, and then the world is theirs. They can actually see what will happen in their future...and won't need a crystal ball.

I suggest you listen to my podcast on that very subject my friend,...because you are not the first, and certainly not the last to bring up that concept, nor that book--and I would never recommend someone staying in debt and exposing themselves, and their home--their haven, to take that risk.

The more equity I have, the more I become the Bank. The more independent I become. I then buy another home, use tax decutions and pay it off, even faster than the first. I can buy a third, fourth, fifth and so on...homes...and all this time, I can extend the limit of my HELOC and become the Bank.

My friend, my equity does plenty for me, and the best part is: I do it on MY PRESENT INCOME, AND I CONTROL IT ALL.

I still completely disagree. Debt is still debt. Risk is still risk. What you suggest is diametrically oppossed to the word of God. Get out of debt, then you have plenty of options, and a safe haven to work from.
That's my council, and I stand behind it.

Thanks for the chat.
Title: Re:Money Merge Accounts - scam or for real?
Post by: Rancho Funding on November 09, 2006, 07:45:13 pm
Jamie,

Considering the product you back I am shocked at your blinded view on debt.

We can simplify what I just put in writing and go to the bone basics. You cannot argue these hard facts.

30 year fixed mortgage (No RISK) 6.5%

Fixed Universal Life policy 6.5% return tax exempt (accessible whenever you want)

Using the numbers in the above post you will see how whatever equity you have will make you hundred-thousands-10's of thousands in interest. The programs we have available will just compound the benefit on top of those basics.

Where is the risk? There is no risk. Uncle Sam gives us limited ways to shelter from taxes. The largest is our homes interest. You and your customers will be shocked down the road towards retirement when you realize that your house is paid off and you start to draw on your Social Security, IRA, 401K and other investments and youíre in a higher tax bracket than you have ever been in. Then Uncle Sam comes and takes 30+% away. By keeping your home financed you can virtually draw that already tied up retirement investment most Americans have tax free with the tax shelter of your homes interest.

As you can tell by my passion for educating and for finanacial freedom for my clients I also teach of how to accelerate wealth in addition to debt reduction with no change to spending habits or monthly income.

Your final comment "I still completely disagree. Debt is still debt. Risk is still risk. What you suggest is diametrically opposed to the word of God. Get out of debt, then you have plenty of options, and a safe haven to work from.
That's my council, and I stand behind it." would be true if we lived in a tax free country. Unfortunately the cave-man like thought of just paying everything off is not financially beneficial in our Income tax based society and the shelters our elected officials have created for us. It is not you or I who can say there is good or bad debt. The Internal Revenue Service has already made it clear there is good debt.

Respectfully,

Brooke
Title: Re:Money Merge Accounts - scam or for real?
Post by: Jaime Buckley on November 09, 2006, 09:55:33 pm
Then I wish you the best, my friend.

You help your clients, I will help mine.

The principles I stand by apply across the board, Brooke. I pay everything off and rent, flip, or use the equity in future homes, just not my own. Why is that so hard to grasp? No risk, as you say. Steady, secure, financial stability...at no risk.

When taxes are actually the least of someones problems, due to the amazing cash flow from paying off a home early, and now having the ability to purchase income producing properties...what i propose is more sound, stable, and rock solid for the average American. You're just like so many who leave out the ability to buy MORE properties. So I have a higher tax bracket. 30%? ...and your point is what? Can I have enough property, and income producing property to offset 30%? Easily. We aren't talking about need and comfort now, Brooke...we're back to greed. You simply want a ton, you want it now, right?? Uncle Sam takes close to that now....so, your point was what?

I'm still on the "no risk" issue.

Let me ask you this: Why do you and so many people keep trying to convert me to your point, and keep assuming I have to stop purchasing property and increasing my cash flow? I keep saying over and over...simply buy another property (since you have now BECOME THE BANK), and offset all these issues!

Is there something I'm missing, that I only GET tax benefits if it's a home I LIVE in? Is it only on my FIRST home?

Is anyone else noticing here, that I am meeting your points, Brooke, about "our Income tax based society and the shelters our elected officials have created for us"? I have homes, paid for, with 100% equity. I keep buying more, making more...and so I pay higher taxes? Hey---there are things called 'expenses', 'charities' ...oh, and real estate--to use to my advantage. If I have all I need and a huge chunk more, what's 30% to me?? ...and that's STILL only because you assume I don't have another property in the works, which I'm earning money on, and using as a tax benefit.

I'm doing all you pointed out, Brooke. ...but as you said...with NO RISK.

I'm simply not willing to open myself, or my family, or my hard earned money and equity to someone elses investment opportunity that is based on the stability of society.

BTW: by using the MMA system, through federal lending guidelines, my clients (on average) are eligible to pay less interest than compared to a standard 30-year mortgage at 1.75% fixed. I build more equity in my home in the first 60 days than more homeowners do in the first YEAR of their homes. That's not only equity....that's accelerated stabilty, Brooke.

Look Brooke, I can respect what you're passionate about, and I hope I'm not coming off sounding like a jerk...I'm simply not convinced in the least, that your plan or point of view is the right way to go.

Have a good day. and best of luck to you and your clients  :).
Title: Re:Money Merge Accounts - scam or for real?
Post by: Rancho Funding on November 10, 2006, 12:12:58 am
I am going to allow this conversation to end here on my side. You lost me at "If I have all I need and a huge chunk more, what's 30% to me?? "

And... that buying investment properties are no risk.

Just to clarify one other thing. I never disagreed with the MMA program. I am also an agent for the MMA program for my clients who are in states that the Home Ownership Accelerator is not availabale. While the MMA is effective if a client can qualify and lives in a state that the HOA is available they will see a much greater benefit across the board.

Best of luck to you and your clients.

Brooke
Title: Re:Money Merge Accounts - scam or for real?
Post by: Jaime Buckley on November 10, 2006, 07:01:05 am
I just think we come from two different belief and goal points of view, that's all, Brooke. And I certainly apologize to you if I gave the impression I was attacking you. I certainly don't want you walking away, thinking this was a fight...because I never felt that way.

You are correct about qualification with the MMA as well. I have an agent in Texas, and he has to do all his sales OUTside his state, due to their unique laws, compared to the rest of the country. Also, if people simply don't have the credit score (600+) to qualify, that ousts them as well. So, I understand.

I simply have a different way of looking at people's needs, that's all. No one system, nor opportunity will work for all. That I can agree upon. Some will go with the MMA, some with your suggestions, and some with others we have not discussed.

You have a distinct advantage over me, however Brooke: you offer both sides of the coin.

Best to you and your clients, Brooke---and I hope we parted as friends.

Have a great day.
-Jaime Buckley
Title: Re:Money Merge Accounts - scam or for real?
Post by: christopher w on November 10, 2006, 01:43:26 pm
Jaime,

Please follow the following link to a white paper on research that was done by the Fedreal Reserve bank of Chicago.

http://www.chicagofed.org/publications/workingpapers/wp2006_05.pdf

As you will read in the white paper it is explained that pre-paying your mortgage in advance as opposed to putting the money in a tax-advantaged savings account is not a good idea. It is 58 pages long, but anyone reading it can get the gist from just reading abstract. Hope this helps.

Title: Re:Money Merge Accounts - scam or for real?
Post by: Jaime Buckley on November 10, 2006, 02:03:55 pm
Christopher,

Just a simple principle here concerning Banks.

Banks make money off of your bondage. They make money when you owe, they don't when you don't.

WHY would any correct thinking person take the advice of a Bank, when it comes to getting out of debt?

Of COURSE they want you to invest and not pay off the home! I just took $109,000 AWAY from MY Bank!

...come on, really. Keep your report.
Title: Re:Money Merge Accounts - scam or for real?
Post by: christopher w on November 10, 2006, 02:13:00 pm
Jaime,

You seem like a bright enough guy, but with the MOUNTAIN of evidence contrary to your way of thinking one would assume that you would at least grasp the concept that tax write-offs are good and compunded interest is better. I understand that you have a product to market and that it would be probably against your better financial interests to admit that you are incorrect. Good luck with your MMA.  
Title: Re:Money Merge Accounts - scam or for real?
Post by: Jaime Buckley on November 10, 2006, 02:23:35 pm
I have a home to write off taxes.

The Bank is earning "compound interest" on ME---and this program is helping me save my money, and protect me from that.

There is nothing wrong with anything I have stated, nor in what I have shown. I'm not incorrect Christopher...I just see things black and white in this issue. What I propose has always worked, and still works.

None of you have yet to show me my way of thinking doesn't work. Instead, you keep pushing my way of thinking is 'old hat'. Hey, I'm perfectly fine with that. I've just asked to be shown where I am wrong.

You just want to prove your way is BETTER. Make that clear Christopher. My way isn't wrong...it's just not your way.

Isn't that right?
Title: Re:Money Merge Accounts - scam or for real?
Post by: christopher w on November 10, 2006, 03:34:43 pm
Yes, that is exactly right. Although I would not call it "my" way. I would call it the "smart" way. Your way involves having someone pay off their home early which in turn causes them to lose their largest tax write-off while also having then tie up thousands of dollars in their home that they DO NOT have access to.  If they want access to it they have to apply for a mortgage and hope they can qualify. If you add all of this to the fact that ALL of the money tied up in the home earns ZERO rate of return they would be better off burying it in their backyard because at least then they could get to it if they needed to.
Title: Re:Money Merge Accounts - scam or for real?
Post by: Jaime Buckley on November 10, 2006, 05:48:10 pm
Good grief.

Quote
Your way involves having someone pay off their home early which in turn causes them to lose their largest tax write-off while also having then tie up thousands of dollars in their home that they DO NOT have access to.

Did you even READ my posts, Christopher?

Quote
Let me ask you this: Why do you and so many people keep trying to convert me to your point, and keep assuming I have to stop purchasing property and increasing my cash flow? I keep saying over and over...simply buy another property (since you have now BECOME THE BANK), and offset all these issues!

Is there something I'm missing, that I only GET tax benefits if it's a home I LIVE in? Is it only on my FIRST home?

Is anyone else noticing here, that I am meeting your points, Brooke, about "our Income tax based society and the shelters our elected officials have created for us"? I have homes, paid for, with 100% equity. I keep buying more, making more...and so I pay higher taxes? Hey---there are things called 'expenses', 'charities' ...oh, and real estate--to use to my advantage. If I have all I need and a huge chunk more, what's 30% to me?? ...and that's STILL only because you assume I don't have another property in the works, which I'm earning money on, and using as a tax benefit.

I'm doing all you pointed out, Brooke. ...but as you said...with NO RISK.

Quote
I can then go and use that same method and that same HELOC (or set one up on a second property), have my home free and clear and BECOME THE BANK!
Quote
You don't get it Christopher...why won't I have access to my money from my home? I pay it off, and raise the limit of my HELOC, and now I'm the Bank and move onto my second property.
I have 100% access to what money I need, and once I have paid off the second, have an even greater amount to work with in much shorter time frames than what your describing.

But I'm out of debt.
Quote
The more equity I have, the more I become the Bank. The more independent I become. I then buy another home, use tax decutions and pay it off, even faster than the first. I can buy a third, fourth, fifth and so on...homes...and all this time, I can extend the limit of my HELOC and become the Bank.


Then you remark:

Quote
If they want access to it they have to apply for a mortgage and hope they can qualify.
Since WHEN? With the MMA, you have a Home Equity Line of Credit. I don't have to close that line when the house is paid off. In fact I will always keep that open, and EXPAND it, as stated above...TO BECOME THE BANK.

Do you understand that concept? Do you realize that I can have a huge line of credit, which is tied to my equity...so I have access to as much money as I need? Are you reading this now, bud?? I always have access to my money. Each time I purchase more property, I can pay it off in record time, and I have complete access to it's equity as I go.

Quote
If you add all of this to the fact that ALL of the money tied up in the home earns ZERO rate of return they would be better off burying it in their backyard because at least then they could get to it if they needed to.

LOL. Zero rate of return? When you look at the fact that I will be able to buy more property, to expand my net worth (which has no debt, mind you---for you take your investments, and then MINUS your mortgage, then you get your net worth), invest in other projects, create rental properties, purchase options and the like, that's not accurate at all. My money will be working for me, and accelerate my wealth. You are trying to create a set and limited situation here, when I am plainly saying that when you have money and you have no debt, you have options.

Gosh, why don't you just come out and say you simply want people to do things your way...be "smart", take risk in investments and get rich quick? Take all your equity out of your home, expose yourself, your family and place it in someone elses hands. If you're lucky and things stay stable, you'll make a furtune. If things go bad, hey, it was a good thought, and it's ok...you can spend another 30 years building it up again.
Am I too far off?

Look, you've made up your mind, I've made up mine. I think your "way" is anything BUT 'smart'...and you feel the same about me. Cool. I'm good with that. Give people their options, let them choose how they want to use their money. That's not your choice, nor is it mine.

I just have have two questions for you, which I'm curious about:

Question #1:  Is there ANY risk in people LOSING their money with your 'smart' way?
Question #3: Do your investments stay stable, or do they rise and fall with variables in society?
Question #2: If you CAN lose your money, what happens to the homeowners?

Please answer those for me Christopher.

Have a great weekend everyone...be back Monday for another round of fun, fun, fun.

Jaime Buckley
Title: Re:Money Merge Accounts - scam or for real?
Post by: kdhastedt on November 11, 2006, 10:03:11 am

Jaime,

If you really want to keep coming back, you'r egoing to need to read the rules and start following them...

Keith
Moderator
Title: Re:Money Merge Accounts - scam or for real?
Post by: Jaime Buckley on November 13, 2006, 09:01:21 am
My apologies.

I will do so.

-Jaime Buckley
Title: Re:Money Merge Accounts - scam or for real?
Post by: Jaime Buckley on November 13, 2006, 09:05:41 am
I'm sorry Kieth, I did as you requested, and noticed I violated many of the rules of posting.

You can handle this any way you wish---if you would like me to go clean up my posting mess, i will do so and be 100% compliant.

Again, my apologies...I did not read the posting rules, and i should have.

...also my apologies to all who responded to my posts, for not following the rules, when they, themselves did.

-Jaime Buckley
Title: Re:Money Merge Accounts - scam or for real?
Post by: kdhastedt on November 13, 2006, 09:52:38 am

Thanx Jaime...I have modified/deleted the more offending portions of your posts as it went along...

Please just be cognizant of the rules in future posts.  Thank you for your willing compliance in keeping the Forums a positive experience for all users!

Keith
Title: Re:Money Merge Accounts - scam or for real?
Post by: hnrozin on November 14, 2006, 08:26:58 pm
I think Jaime may have some good points, but they got lost for me in his arrogant attitude and desire to belittle other opinions.  Jaime, please try to stick to the fact and be kind to others!  Your phrasing attitude made you sound like a huckster trying to score a big commission instead of a thoughtful person worth trusting.

 Having said that, I saw the MMA video on line, but still don't understand how it works.  It seems like I am paying down more of my conventional balance each month than my discretionary money could pay down.  How does that happen?  The 2 page analysis a sales person ran for me did not explain it.  Any ideas here?  
Title: Re:Money Merge Accounts - scam or for real?
Post by: Rancho Funding on November 14, 2006, 09:07:18 pm
Hopefully I can answer your question as unbiased as possible. As I have stated above, I carry all three major mortgage acceleration products therefore I can fully compare and contrast all three.

All "mortgage acceleration" programs work off the same principle, banking out of a current debt. Why carry a positive balance in a savings account at 0-1% when you can reduce a current debt at 6-9% interest.

The only thing that allows you to create this type of banking out of a debt is a simple interest loan. A simple interest loan is a loan where interest is calculated on the daily balance. So when you apply a priciple payment in the middle of the month you will not pay interest on it for the rest of the month. Currently all simple interest mortgages are monthly adjustable rate mortgages.

The Home Ownership Accelerator and Macquarie Asset Manager both utilize this by refinancing your current mortgage into their program which is a HELOC 1st Mortgage. A HELOC is better know as a Home Equity Line of Credit.

The MMA program utilizes ones conventional or compound interest loan that is currently in place and adds a HELOC for the banking aspect. The MMA software precisely calculates your deposits, spending and savings to minimize the amount of debt carried on the HELOC and deposit any extra available principle as soon as possible to the 1st mortgage.

Each programs has its positives and negative and only an individuals scenario can determine which product will work better for them. Here are just some rough examples I have seen in the past few months.

Home Ownership Accelerator
1st mortgage is due for refinance anyway
Borrower want to relend money in the future

Macquarie Asset Manager
1st mortgage is due for refinance and one of the following:
3-4 units
Investment property
>90%Loan to Value

Money Merge Account
has current fixed mortgage at good rate
wants to accelerate pay off with no risk
(because this is sofware and not a mortgage it has an mlm agent program. This agent program does not require you to buy the software. Many are attracted more to this product because of the ability for resale. If a different product fits you personally better, you can do the better product and still be an agent for United First Financial the parent company of the Money Merge account.)
Title: Re:Money Merge Accounts - scam or for real?
Post by: hnrozin on November 15, 2006, 05:39:10 am
Thank you for the informative reply.  I especially appreciate the comparison of like products.  As a matter of principle, I have concerns about any product sold via MLM, however, I will try to get over that if it is actually the best choice for me.  Here is my situation:

I live in GA, have 3 quads on conventional loans, plus several properties on interest only loans.  I would like to use my business income / expenses as the "household" financial picture.  I do not have any desire to pay of my home mortgage or put a HELOC on my primary residence.   Do you recommend any particular product to accelerate the mortgage pay down?  I would be pleased to discuss this further off line.  By the way, I filled out a form from the Rancho website last night.  Is that you?


 
Title: Re:Money Merge Accounts - scam or for real?
Post by: Jaime Buckley on November 15, 2006, 09:40:57 am
I apologize for a portion of my conduct, to be sure, but please don't mistake arrogance for passion. I am not attacking or belittling others opinions hnrozin--I was simply talking about basic principles, and was   challenged on them when I stated I did not agree. I was told the other ways were 'smarter'--and I just didn't see it that way: an opinion. I have said time and again that no one system or product will work for everyone (which INCLUDES MMA), and you need to make your own decision.

So, my apologies to you hnrozin---but it was passion, not arrogance...for I know there are more educated people on this board than I am. I was simply standing by a belief, as are you, by making that judgement of me.

I appreciate the detailed comparrison of Rancho Funding in the last post, and wanted to add something for consideration:

One of the hard things to gauge with the MMA program, is taking into account the actual dollar amounts being cancelled on the back end. It's not as simple as telling a client that he/she will cancel interest at 6-9% (though Rancho is right)...you can't actually show/see what's being cancelled in dollar amounts on the back end through the software, nor through the free analysis you give a client.

A scary thing that was brought to me, from someone who used the 'austrailian' version of this type of program, is a 1st position variable mortgage / HELOC, can wipe out the average consumer who doesn't have a great deal of discretionary income. Even a slight rise in interest can eat up all your discretionary income and bury you. Those with high discretionary incomes don't seem to have the problem, but thought it was worth mentioning.

Anyway, just thought that might be useful to you. Appreciate the comparrisons of products.
Just use what's best for you, and ask a lot of questions while you do your homework.
Title: Re:Money Merge Accounts - scam or for real?
Post by: Rancho Funding on November 15, 2006, 10:18:22 am
Jamie,

You are absolutely correct. This is why I carry all 3 products. Just as you stated, and I cannot stress enough, it is on a case by case depending on these top variables: cash flow, savings, current mortgage situation, future plans.

Since the Home Ownership Accelerator has very strict guidelines only about 20% of people will qualify for the program: 24 states, >660 FICO, <90%LTV, 1-2 units, owner occupied or second home. Macquarie is more flexible but has much more risk involved: 26 states, >660 FICO, 100%LTV, investment ok, 1-4 units... but your lifetime interest rate cap is 21%. MMA is available in 49 states and to 80% of homeowners because all you need to be able to do is qualify for a HELOC or use one you currently have in place. Aside from the working concept and mlm program, this is why everyone is starting to hear about this so quick.

hnrozin,
You hit on a point I forgot to. Jamie please give feedback if you can find a falter in this thought. The Home Ownership Accelerator excels for small business owners or people with access to a lot of cash flow monthly. This is because you have a single 1st mortgage based off 1-Month LIBOR with a margin between .75 and 3.25. This means your effective interest rate is between 6 and 8.5%. When you pay down a large chunk of that from savings, business cash flow, property tax savings or any other source you are not tying the money up. You can relend it at the same exact interest rate. Using the MMA, you would actually be making that large payment as a principle payment to your conventional 1st mortgage, tying the money up, and subject to the interest rate on the HELOC when you redraw the funds throughout the month, every quarter, or yearly. HELOC are almost all based off prime and carry the legal cap of 21% for life. This puts you at an effective rate currently somewhere between 8 and 13%.

Now with just the limited information that you gave, you actually only have 1 maybe 2 options. THe Home Ownership Accelerator is out becasue they are not yet availabale in GA and it is not available at all on investment properties. THe Macquarie is availabale but there are substantial riskes involved becasue of the structure.  

hnrozin I fall underneath the corporate umbrella of Rancho Funding. You can find me be my signature or sending a PM if you have something for offline.
Title: Re:Money Merge Accounts - scam or for real?
Post by: Jaime Buckley on November 15, 2006, 12:12:20 pm
Quote
Jamie please give feedback if you can find a falter in this thought. The Home Ownership Accelerator excels for small business owners or people with access to a lot of cash flow monthly. This is because you have a single 1st mortgage based off 1-Month LIBOR with a margin between .75 and 3.25. This means your effective interest rate is between 6 and 8.5%. When you pay down a large chunk of that from savings, business cash flow, property tax savings or any other source you are not tying the money up. You can relend it at the same exact interest rate. Using the MMA, you would actually be making that large payment as a principle payment to your conventional 1st mortgage, tying the money up, and subject to the interest rate on the HELOC when you redraw the funds throughout the month, every quarter, or yearly. HELOC are almost all based off prime and carry the legal cap of 21% for life. This puts you at an effective rate currently somewhere between 8 and 13%.

I don't see any fault in this at all. In fact, I think I can clarify it even more:
MMA's are not actively used at this time on commercial properties, period (as of this posting). It's not that it won't work, and there are good points made above, but rather because United First Financial makes sure it does test marketing first, before bringing something to clients. They shoot at their own system and software, and make sure it's on solid ground before talking to mom and pop America, and I have the utmost respect for that (being a client).

A mortgage is a mortgage, but I was told, last Monday in the home office, that MMA's are not offered on commercial properties...yet. They said they will open that door in 6-12 months. They have their plates full with the homeowners, and have no need to jump into another arena.

I think Rancho Fundings info is very useful...and you know what---I'm happy I finally get to AGREE with someone here!

Everything is a case by case situation.
  ;)
Title: Re:Money Merge Accounts - scam or for real?
Post by: rkim777 on November 16, 2006, 02:22:51 am
Hi,

Has anyone heard of a Money Merge Account.  It is presented as a way to pay down your primary mortgage through an equity line of credit, taking the upside of a simple interest calculation v. compound interest.  Just curious if it was a scam?

All theory aside in this discussion as I'm not smart enough to understand any of these other posts, I was at a boot camp in April where T. J. Marrs, one of the speakers and national gurus, appears to sell a program just like what you describe.  If I recall, it was $1297 which included software to optimize the savings on your mortgage loan if you replaced it with a HELOC or other line of credit.

I didn't purchase the T. J. Marrs program but this type of system (no matter who's system you use) seems to make a lot of sense since you are paying principal first in contrast to paying interest first as done with traditionally amortized mortgages.
Title: Re:Money Merge Accounts - scam or for real?
Post by: christopher w on November 19, 2006, 08:26:55 am
Brooke,

Just read about you and your program on MSN. Here is the link if you have not seen it.

http://articles.moneycentral.msn.com/Banking/HomeFinancing/ANewWayToPayOffYourHouse.aspx
Title: Re:Money Merge Accounts - scam or for real?
Post by: riobjj on November 21, 2006, 01:51:57 pm
 The deduction for home-mortgage interest only saves you taxes on a fraction of the total payment. The objective of the deduction is to encourage homeownership over renting, but it never makes sense to incur a mortgage in excess of your lifestyle needs.

Mortgage interest is an itemized deduction. Itemized deductions are in lieu of the standard deduction afforded to everyone. If you have enough itemized deductions that exceed the standard, you save a fraction of those deductions in taxes. That fraction depends on your tax bracket, which varies between 15 percent and 35 percent, depending on your taxable income. If you pay $1,000 a month in interest, and your annual income is more than $325,000, the most the Internal Revenue Service gives you back is $350. Whereas if you eliminate the $1,000, you save $650.

Some itemized deductions cannot be eliminated, such as state and local income taxes and property taxes. Some folks feel good making charitable contributions and choose not to eliminate those; some folks have high medical bills and employee business expenses that are unavoidable. But if you can provide yourself with a $325,000 home that is almost paid off, you don't have that outflow of the mortgage payment every month, which is a bigger savings than the tax savings. So the answer is revealed in this question: Whom do you want to make richer -- yourself or the bank?
Quote


Makes sense to me... The MMA program looks good, I really don't see a flaw in it.  You can make an argument about anything, but I'd rather own my home instead of paying hundereds of thousands of dollars to the bank over the 30 year term of the loan, or using my home as an ATM and refinancing every couple of years and blowing 3-5% in closing costs each time.  Besides, we don't have appreciation on our side like we had back in 2002-2005, and we probably won't for a long time.
The savings with the MMA aren't fractional, as long as you can see the big picture.

Another thing about the MMA is that the program works even better for people in Neg-Amortizing (Option Arm) and Interest Only Loans, because those loans free up so much monthly cash flow so you can drop that into the HELOC and attack the 1st Mtg.  Otherwise, those loans will never, EVER EVER be paid off!

MMA can also work well for Owners of Apartment Buildings because of the Rent Rolls, which provide incredible amounts of monthly cash flow.  There may be better alternatives, but the MMA in my opinion is best for the average person...
 
I'm looking to offer this program to all my potential and past clients.

discuss.....
Title: Re:Money Merge Accounts - scam or for real?
Post by: christopher w on November 21, 2006, 02:23:58 pm
Rio,

So what happens when the average person hits retirement age and starts withdrawing from their IRA's and 401K's and has no tax write-off for the mortgage on their home? They get socked with a huge amount of taxes on the money that they are withdrawing.

Instead of pre-paying their mortgage they would be better served to put that money into tax advantaged investemnts that will compound and grow through the years. I posted a link to white paper that was done by the Federal Reserve Bank of Chicago which explains it all in balck and white. Congrats on your first posting.
Title: Re:Money Merge Accounts - scam or for real?
Post by: riobjj on November 21, 2006, 07:23:17 pm
Hey Christopher,


So are you saying to keep your mortgage for the life of the term along with your IRA's and 401k's, pay a hundred, two hundred, or three hundred thousand dollars in interest just to save a few thousand dollars a year on taxes from money withdrawn?  Maybe i'm not following correctly, but I'm not sure thats a good thing.   I don't think the tax hit would be greater than the actual mortgage payments.  Good point though, i guess it would depend on how much they take out for expenditures..

How about keeping your IRA's, 401k's, AND pay off your mtg early? (You can invest after your house is paid off or simultaneously in an IRA, Roth IRA, 401k, etc..) If you have a Roth IRA for 5yrs, I don't think you get taxed on the money withdrawn (but that's a whole other topic)

As far as a Real Esate, There is NO real money saving advantage with in regards to tax deduction when buying a house if you're paying 200%-300% of the actual value of the home over the 30/yr term.

Look, I'm not saying this MMA program is for everybody, but I think it makes sense and it could be useful to alot of people.  Being a Mortgage Broker, my job for a long time has been to put people in debt, now I have a chance to help them get out of debt.  I don't see anything wrong with that, maybe there are other alternatives that could better suit some people, but I think if you asked the average American across the country if they really want to have thier home paid off in half the time, I bet they would say yes.  It's a comfortable and psychological benefit that adds peace of mind.

However, If the homeowner decides to sell in 3, 5, or 10 yrs down the road, they've accumulated much more equity, saved an incredible amount money on interest, and will ultimately put themselves in a better situation towards thier next purchase and/or investments.

My point is that paying off your mortgage and avoiding interest IS ALSO MAKING YOUR MONEY WORK FOR YOU.  If your paying interest that you don't have to, your essentially stealing from yourself...



 
Title: Re:Money Merge Accounts - scam or for real?
Post by: Jaime Buckley on November 22, 2006, 06:48:59 pm
***sighs***

... passes the torch to riobjj,

bows to the new runner,

...then walks away...



I'm going to work with the people who want what the MMA offers.
Best regards to all of you and God Bless.

Jaime Buckley
Co-Founder of The Jubilee project.org
Title: Re:Money Merge Accounts - scam or for real?
Post by: Rancho Funding on November 22, 2006, 07:21:09 pm
One last clarification.

While the theory of tax deduction and reinvestment hold true in our beautiful taxed free country it is not simple to do and most(80%+?) donít not strategically use this.  

When thinking about this today it dawned on me that the theory behind the controversial strategy of keeping mortgage debt is almost identical to the formerly controversial strategy of interest cancellation.

The MMA has been able to make it possible for your average American to use the proven system of interest cancellation. Here is one for you smart financial and web guys. Create a fail safe web based software system that maximizes your mortgage interest while balancing the re-investment of those funds in a non-taxable investment. Make sure it monitors and gauges that the investment is at least breaking you even and has recommendations on where to transfer your money to if you are about to fall into the red.

With all the controversy over this is why the MMA program is gaining so much popularity. UFF has produced a systematic program for the other 80% of the Americans to maximize their current money.

Happy Turkey Day,

Brooke
Title: Re:Money Merge Accounts - scam or for real?
Post by: stikkee on December 01, 2006, 06:39:23 pm
I must say that the MMA is the best thing since sliced bread.  All this talk about tax write offs as a solid reason to continue being a mortgage slave is just stupid.  There are dozens of other ways to get around the tax problem.  For example, go down to your county or city hall and get a business license.  Register yourself as a sole proprietor for something and write off everything.  Why anyone in their right mind would want to keep a mortgage opposed to living free in clear is mind boggling to me and most people.  Yes, if the money merge account was not an option or never created then I would understand maintaining a small mortgage balance.  But now it's here, and by golly take advantage of it!

Thanks
Stikkee
Title: Re:Money Merge Accounts - scam or for real?
Post by: DeeinAustin on December 01, 2006, 08:11:46 pm
I think this post has become an advertisement for a particular company and their services. I'm checking with the moderators on it. There's some information here that can be useful, but the purpose of the board is not to make a case for people to use a service you offer.
Title: Re:Money Merge Accounts - scam or for real?
Post by: christopher w on December 02, 2006, 10:25:17 am
Stickkee,

I think you are missing the point. Did you even bother to look at the link I posted that lead to a white paper written by the Federal Reserve Bank of Chicago discussing why it is better to NOT pre-pay your mortgage and instead invest that money into a tax advantaged savings account. Pre-paying your mortgage many of the tests of a good investment. That extra money earns ZERO interest. Thats right equity in your home earns zero rate of return as opposed to putting that money into a savings account that actually does earn you interest. It is not liquid. Heaven forbid someone should need to access money in their home especially if it is only a small amount. Good luck trying to find a bank to loan you $5000 in home equity on short notice. It is NOT going to happen. You would be safer burying it in your back yard. Go ahead and keep your depression era thinking. See where it gets you in 30 years. Not too mention that you are suggesting to people to register a false business to "write everything off" as an alternative? I am with Dee in Austin. All you people are trying to do is sell something to people who don't know any better.
Title: Re:Money Merge Accounts - scam or for real?
Post by: 71tr on December 02, 2006, 04:24:18 pm
Wow this thread has generated a lot of passionate debate.  I think its important to remember that not everyone is on the extreme ends of this discussion.  Money merge accounts are an interesting financial tool and for some people and lifestyles may be very appropriate.  On the other hand mortgage loans are likely the cheapest money any of us will borrow in our lifetime.   Why pay that off early if I can invest the extra funds and earn a yield/return greater than my net mortgage cost?  Then again paying off my mortage sooner gets me free and clear of a major debt obligation and cash flow drain.  To say that paying off a portion of your mortgage debt earns zero return is incorrect.  You have to consider the opportunity cost, if I prepay a 7% mortgage then I'm saving that cost of funds on the prepayed money, that is a return.  I don't see it in my pocket right away but it shortens the life of my mortgage and frees up that cash flow sooner rather than later which has a positive net present value.  Using this forum to promote a business is out of line with the rules, but using the forum to belittle fellow members is similarly inappropriate.
Title: Re:Money Merge Accounts - scam or for real?
Post by: christopher w on December 03, 2006, 12:05:20 pm
7,

Your posting makes sense however due to inflation the money that you are saving in the future is going to be worth less than the money you have in hand now. I don't see how opportunity cost factors in at all. If I have a 7% mortgage after taxes my net rate is actually 4.62%. I could put that extra money in a savings account earning 5% and actually be making money on my mortgage. Hope this helps.
Title: Re:Money Merge Accounts - scam or for real?
Post by: jmark78 on December 03, 2006, 06:18:36 pm
I have read a lot of really good comments on this subject. One thing that I would like to point out with all of this debate about paying your mortgage off vs. investing your money and the claimed tax advantages. There are simply many homeowners out there that want to be free of this tremendous debt called a mortgage.

I paid my mortgage off personally, I am aware of the tax advantages of having a mortgage, so I simply purchased an investment property and put a renter in it. This takes care of my tax write off, and my personal home is paid for free and clear. There is no feeling in the world that can match having the place wich I live in paid off.

Regardless of other investment ideas vs. paying off your home, there are simply people out there that want to have their mortgage gone.

I will tell you, so many more financial possibilities open up for you when you dont have the manditory obligation of a mortgage payment each month. Thanks.
Title: Re:Money Merge Accounts - scam or for real?
Post by: thailanddave on December 04, 2006, 05:45:47 pm
I'd like to get in on this one. A couple of things I have noticed.

No debt is better than debt. Why? because you are paying interest. Doug Andrew (author of Missed Fortune series. I have seen him live twice now) points out that home interest is tax deductible. The point he leaves out is that even with tax write-offs, you are paying interest which is more expensive than not paying interest.

Missed fortune talks about investment grade life insurance policies, compound interest etc. What he says in his seminars is "investment grade life insurance "AVERAGES" 6%+. What he doesn't tell you is the first few years you wont get that. More like 2-3% initially. The insurance agent that sold you the investment grade insurance makes as much as $20K for selling you the overfunded life insurance account at about $200K in overfunding. Of course you can't put $200K in all at once, because that would cause the policy to "meck" and be taxable. But if you pull $200K out of your equity and put $50K in your overfunded life policy, they will invest the other $150K for you somewhere else for a couple of years or the time it takes to continually overfund the insurance account.

The way the accelerated mortgage accounts save you thousands of dollars in interest is because you pay off the loan quicker so you don't incure interest on the outstanding balance. No arguement there. The bi-weekly mortgage works on the same idea. Anything extra you pay goes toward principle and reduces your loan balance. However most people could not afford the extra payment and ended up gettting out of the bi-weeklys.

HELOC's are variable and going up. Currently most of them are at prime which is currently around 8.25%. 30 year fixed is at about 6%. Please explain to me how paying higher interest is better than paying lower interest. These systems all take all the extra available cash at the end of each month and pay it towards the loan balance. You could do this yourself if you have any extra money left over yourself without paying for software. It will work the same way and at a lower interest rate.

The LIBOR is probably the worst index you could tie a mortgage to. It stands for the London Interbank overnight rate. Its the rate banks loan their money to other banks overnight to make up shortfalls. What could be safer for a bank than an overnight rate. The worst risk for a bank is something that ties up their rate for 30 years. Which do you think is more volative, something that changes every day or something that changes every 30 years? banks like adjustables for that reason. If their rates go up, your rates go up. Long term fixed rates is what caused the savings and loan melt down in the 80's. They were paying more for their money than they could lend it out at. Savings and Loans could not sell their loans to other investors. Its why you don't see savings and loans anymore.

MTA's (monthly treasury averages) are calculated monthy. Not as good for the bank as a daily average but better than a 5 year fixed. Thats why you get so many perks for takiing a loan tied to a LIBOR or MTA.

I believe that England and Austraila don't offer 30 year fixed. If I remember correctly, all their loans are ARMS.

$3500 for software to calculate how much I save for not buying a $250 dress seems exhorbinant. How much interest would you save over 20 years if you applied that $3500 to your mortgage?

Title: Re:Money Merge Accounts - scam or for real?
Post by: Jaime Buckley on December 04, 2006, 06:50:25 pm
Quote
I paid my mortgage off personally, I am aware of the tax advantages of having a mortgage, so I simply purchased an investment property and put a renter in it. This takes care of my tax write off, and my personal home is paid for free and clear. There is no feeling in the world that can match having the place wich I live in paid off.

Regardless of other investment ideas vs. paying off your home, there are simply people out there that want to have their mortgage gone.

I will tell you, so many more financial possibilities open up for you when you dont have the manditory obligation of a mortgage payment each month. Thanks.

This was my exact point all along. I don't want to argue with Christopher or anyone else on the 100% financing or the MMA side...my point was simply this: get your actual home--the one your wife and kids live in, paid off and keep it off. Don't chance your home nest.

Then simply get a second property, and you can even have renters in it, and use the MMA to pay off the home faster/gain equity faster, and invest it. You now have the best of both worlds, and you can do it over and over.

...just don't mess with the homefront, that's all.

Happy wife, happy life.
Title: Re:Money Merge Accounts - scam or for real?
Post by: 71tr on December 04, 2006, 07:37:44 pm
Okay I was all done with this thread but couldn't resist.  While no debt is nice you have to remember that debt is nothing more than a tool to be utilized wisely.  Debt allows us to buy homes in the first place and start businesses and be productive.  Poorly managing our debt gets us into trouble.

While I'm not a major advocate of the MMA I do see their attraction.  Yes, you refinance what might have been a fixed rate mortgage with a HELOC at a variable rate.  Yes, you assume interest rate risk by doing so.  But you are also getting a transaction account which gives you the flexibility to pay down the balance more each month than you might have with a bi-weekly fixed loan and the ability to re-borrow the funds should something unexpected arise.  This is a valuable benefit to the consumer and should have a cost to it.

Interest rate risk is a major concern to banks and savings and loans, but they both manage it much more wisely now than in the 1980's.  I know I as a bank examiner in the '80s.  The Savings and Loan debacle was caused by many things, credit risk, deregulation, lending long and borrowing short and outright fraud.  Savings and Loans are still around, just in smaller numbers and with different names.  Washington Mutual is a good example, the nations largest thrift and one of the best home mortgage lenders in the country.

Again we are mixing finance with personal lifestyle choices here.  There is no correct answer only the best choice for each of us.
Title: Re:Money Merge Accounts - scam or for real?
Post by: jmark78 on December 04, 2006, 09:46:50 pm
The MMA system does not require you to refinance your existing first mortgage like the programs in Australia and Europe. If you have an existing low rate first mortgage, keep it.

The MMA works in conjunction with your existing first mortgage through a secondary line of credit.

The MMA system adjusts with your financial ups and downs on a daily basis. Each individuals financial situation is different. The MMA analyzes your debt, income and expenses and determines to the penny how much and when to transfer funds from your line of credit to your primary mortgage.

One reason why this is so critical is because if you transfer too much from your line of credit to your first mortgage it could cost you too much interest on your line of credit or loose you potential interest savings on your first mortgage, or visa-versa.

The MMA system is structured to save you as much interest as possible on your first mortgage, while at the same time, costing as little interest as possible on your line of credit.

The specific transfer amounts and timing along with your day to day financial ups and downs is why the MMA system works well for so many homeowners. This system comes with a lot of other financial features that I dont have time to mention right now.

Yes, I researched this thoroughly. I work in finance and I use the MMA.

This system works well for me, but I do advise you to evaluate all your financial options and make a decision form there.
Title: Re:Money Merge Accounts - scam or for real?
Post by: DeeinAustin on December 06, 2006, 03:09:22 pm
This is a controversial topic and can go on and on.

FYI-A poster made comments regarding his negative experience with a particular company. The company immediately responded that the comments were abusive, false, inflammartory, etc. They probably have some employees here.

The poster didn't make it clear that he was only giving his opinion versus stating fact, so we had to pull his post.

Let the buyer beware when looking into these. See if the company you're working with is a member of the BBB. Also check with your local investment club to see if anyone has experience with the company. A legitimate company would have a somewhat of local presence and physical address so you can track them down if you're dissatisfied.