Money Merge Accounts - scam or for real?

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).

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.

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

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.

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. [i]With a little skill a good excel spreadsheet will accomplish the same analysis.[/i]

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

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.

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

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.

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.

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.

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

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.

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… :

;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?

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.

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.

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.

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 you’re 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

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 :).

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