Pros and Cons of Money Merge Accounts


What is a Money Merge Account?

Maybe you have heard about this whole Money Merge account thing or United First Financial and wondered what it is. I did too. I first found out about these programs a little less than two years ago and did some quick investigating, but didn’t do enough research to fully understand the Money Merge thing.

Disclaimer: I do not currently have a Money Merge Account. All the information included here about them is from interviews, research, building Excel spreadsheets, and my own calculations – not my own personal experience using them. I say this because there very well could be some pieces to the puzzle that I am missing, if you see any please share them in the comments.

Also, right off the bat, this product is not designed to be a quick fix to pay off your mortgage and it should only be used by people who are very disciplined with their finances. Honest MMA companies and sellers of the products have said that themselves. If your life is a financial mess, you need to get it cleaned up before considering a Money Merge Account.

So what is it anyway?

In researching this, I found a couple of good explanations of what a Money Merge account actually is. TheSimpleDollar defines it as:

A “money merge account” is a special home equity line of credit placed on your home. Every time you receive a paycheck, the whole thing goes straight towards first paying off any balance in your money merge account, then the entire remainder of your check goes towards paying the interest, then the principal of your home loan. Let’s say you had a mortgage with $1,500 payments and you set up a money merge account. Each month, you received $3,500 in paychecks, but only spent $1,200 (and sometimes less). That means that automatically $2,300 (and sometimes more) goes towards that mortgage each month – an extra $800 towards principal every single month. This means a 30 year mortgage would be paid off in 13 years and two months.

GetRichSlowly defines it as:

  • The homeowner sets up a home-equity line of credit (HELOC), borrowing against the value of his property.
  • Some large sum is withdrawn from the HELOC and used to pay down the primary mortgage.
  • The homeowner does not deposit his paychecks, etc. into a traditional savings account, but applies them to pay down the HELOC.
  • From time-to-time, another large chunk of money is taken out of the HELOC and applied to the primary mortgage.
  • In case of emergency, the homeowner takes more money out of the HELOC.
  • Though the HELOC will likely have a higher interest rate than the primary mortgage, it’s actually cheaper to maintain because of the way the interest is calculated.

MMA Pros

MMA Cons

  • You probably won’t know for sure what kind of results you are going to get with the program until it is up and running.
  • You will need to open another line of credit.
  • You have to have to be bringing in more money than what is going out each month in order for it to help much.
  • You have to very closely track your payments!
  • It will can become very difficult to budget since everything is coming out of the same bucket. And if you you begin spending more than you would otherwise because of that lack of a budget, you quickly nullify the potential gains possible.

Interview with an MMA company

I recently had an interview with the owner of Smart Equity. He agreed to give me some of his time to answer questions that I had about the Smart Equity MMA program and Money Merge Accounts in general. After talking to him, I felt like I got a better understanding of what was actually happening with the system.

The Money Merge Account system

For me, I think I figured out (someone please correct me if I am wrong) a good way to think about it…

Let’s say you had a $100,000 mortgage for 30 years (@ 7%). You would be paying 7% interest on that $100,000. What if you could transfer $10,000 of it into a loan that didn’t charge interest? You would then have a $90,000 balance on your mortgage being charged the 7% and $10,000 that you still had to pay for, but that was at 0%. I think this is what is essentially happening in the Money Merge programs. Once the $10,000 was paid off, you would then move another $10,000 to a loan with no interest. Then you would be down to less than $80,000. If you continue this cycle, it would be paid off very quickly.

From what I understand, this is a very generalized example of what is going on with a Money Merge account. The MMA software does the number crunching for you and always keep you at the most optimal point to pay down the mortgage the quickest. While the software would definitely make this an easier and probably safer process, you could still get great results doing it yourself.

For example, Using the details from the example above…

  • 30 year $100,000 mortgage at 7%

If you paid $10,000 at the beginning of the year with your credit card that had 12 months of 0% you would have to pay $833.33 each month to have it paid off in a year. This assumes that you have an extra $833.33 every month over and above your normal expenses. If you repeated this process each year (according to my calculations) you would have the house paid off in about 7.5 years. In those 7.5 years you would have paid $29,912.69 in interest charges. This would have been a savings of $109,596.21 in interest charges if you did this method rather than just paying your payment each month for 30 years.

You can see an example of some calculations I made below…

Money Merge Account calculations.png

I will be the first to admit that a $100,000 mortgage or having $833.33 to pay extra each month may not be realistic for most. It is just to illustrate the point and I picked simple numbers to make the example clear.

You need to have extra cash for the Money Merge to work well

What I see from all this is that, just like any mortgage pre-payment plan, the speed with which the mortgage is paid off is directly related to the amount extra you have to put towards it. If you only have $50 a month extra to throw towards your mortgage, sure the MMA software will help a little bit and may even pay for itself over time, but you are not going to be able to pay off your 30 year loan in 11 years. In the example we had above paying principal only on the mortgage would take 12.5 years and that is assuming the whole $100,000 was at 0%, which the Money Merge can not do. It takes it in chunks so that you have large chunks that are getting lower interest rates, but it can’t take the whole mortgage.

Dave Ramsey’s take on money merge accounts

My final thoughts on Money Merge Accounts

Doing the research, building spreadsheets and running the numbers has led me to one conclusion. It is worth your while to pay extra towards your mortgage. Regardless of whether or not you use the MMA software, it is worth trying to pay some extra principal on your mortgage on a regular basis – it greatly shortens the time you will be paying on the loan.

From what I can tell, the Money Merge software will amplify the process and will help you stay on track, but if you don’t have extra money to pay towards your mortgage, don’t waste your time.

Also, I will say it again, because it bears repeating: you need to have your finances in order before even considering something like an MMA. If you ever pay bills late, if you can’t balance your checkbook, if you don’t know exactly what is going on with your finances, I do not recommend Money Merge Accounts. If that is you right now, I would suggest trying to pay extra towards your mortgage each month and if you can do that successfully for a while, then it may be worth considering.

If you are interested in starting an MMA, I recommend the guys from Smart Equity. They were very helpful and gave me hours of their time – phone calls, emails, research just to help me understand the product. At $695 their MMA is the cheapest one I have found out there (compared to the $3500 UFF product) and customer support is included.

So, those are my thoughts on Money Merge Accounts. I would love to hear from people who are currently using them or who have more information about them in the comments below!

Ready to Quit Living Paycheck-to-Paycheck?

Just click to join 163,000+ others and take our FREE email course to better manage your money, pay off debt, and save!

  1. bob

    assuming you are talking about the prepaying I mentioned in the example with the $10,000 each year, I think the benefit would be having a system in place to help us stick with it and maximize the benefits. I think there is also considerably less risk over the credit card idea…

    I tried to point out that if you did that prepaying thing I mentioned, your results would be very similar to what the MMA could get you…

  2. JoeTaxpayer

    I am trying to understand the value you attribute to these programs. If it’s simply a sophisticated reminder to pre-pay principal, or if you find any value to all of the HELOC shifting of funds, which as I understand it, is where all of the transactions are. I am referring to MMA only, haven’t looked at the smartequity system.

  3. bob

    most of the value comes from paying extra towards your mortgage. If you don’t have extra money to put towards your mortgage, it will be a waste of time.

    using the HELOC to shift the funds amplifies the process by basically charging a whole lot less interest on a large chunk of money and systematically repeating that process.

    But, from what I see, the majority of the benefit comes from paying extra towards your mortgage.

  4. HokieFan1

    bob and joe
    Thanks so much for your previous posts.

    Here’s the kicker, I think. If you look at the smart equity page, UFF, etc… they do pay down much faster than if you just add your extra cash flow to your note.

    If I go to an amort schedule and type in 250k at 6% for 30 years with an extra 1k per month it pays off in 11y 8 mo.

    With Smart Equity it pays off in 9y 1mo.

    It looks like these programs have much more value than just a reminder or a “discipline tool”.

    If I can save 3 years for 695 dollars, or for that matter 3500 in software cost I will gladly stroke that check.

    What are your thoughts?

  5. bob

    I definitely agree – they do speed the process up more than if you are just paying extra towards the note, the thing I wanted to make people aware of was that you NEED to have extra $$ to pay each month towards the mortgage or it probably wouldn’t be worth the time/energy…

  6. HokieFan1

    What makes your spreadsheets different than an amortization table?

  7. HokieFan1

    I am not a sales person for any of these companies. I am trying to find the truth.

    Before you start to ASSUME, we all know what that does, let me give you a little back ground. I am 31 and to this point I have never had any credit card debt and currently have no debt except for my house. I am also in the top 3% of earners. My financial discipline level is very high. I invest every month 15-25% of my income as I have done since I was 23. I am a commission based sales person(surgical device) hence the variance in my monthly income.

    In the past I have had little interest in accelerating the pay off of my house. But recently I have realized that my house is a liability and the accountants are just flat wrong when they tell me I get a great tax break. Me pay 1 dollar to get 30-40 cents back, no thanks!

    I was extremely skeptical of these programs but the bottom line is that what UFF is willing to put into a contract is nearly 5 years ahead of what amortization schedules tell me I can do with what I am willing to put against my note on a monthly basis. UFF can do it in 9 years and the traditional pay down takes nearly 14…. I spoke with Smart Equity which Bob has spoken of a week ago and they are coming in close to the 9 year pay off as well. Since it seems like everyone agrees these are not a scam HOW DO THEY DO IT SO MUCH FASTER????

    I am not trying to “draw” out anyone. I am just very interested as 5 years is approximately 100k savings for my family.

  8. HokieFan1

    On Friday Bob agreed that the MMA, Smart Equity, Equity Genie etc… does speed up the process faster than just applying your discretionary income to your note. I have been looking at these programs for 2 months now and it just seems that there is a savings in time and money by using them.

    I would like to take a look at your spread sheets. Do I need to go to our website and email you from their?

  9. HokieFan1

    Is it possible that if an individual has more cash flowing in and out of their(higher income) account the “float” could make up some time ?

  10. chris

    Would all of this work better using a 0% transfer to a credit card for 12 months, and keep repeating the process using new credit cards?

  11. bob


    well, as I mentioned in the example, I think that could work, the variables to consider – that you will always be able to get 0% offers, that you are sure you can pay off that big chunk on the CC, because if your rate shoots up to 17%, you are going to lose a lot of money quick…

  12. JoeTaxpayer

    chris – I did something like you suggest. Took a $30K 0% credit card advance. Sent it to my 5.25% mortgage. Now, it’s coming due in January, and I paid it down to just about $10K. My HELOC rate is 2.75%, so I’ll pay the card from that. As Bob said, this is a risky approach if you have trouble paying off the card and/or if the HELOC gets frozen.

  13. Adam

    I would like to give you an update on my MMA. I was really hoping that the HELOC would be some magic pill, but of course it is not….just like you said

    BUT, I have found this program to be much like a physical trainer. It never lets you cheat or take the easy road. It always takes every available cent at months end and sends it to the note. I believe these programs work just due to the fact just mentioned. I am very disciplined financially but there is no way I would ever be that agressive at month’s end. My wife and I made the decision 6 months ago that we are going to be mortgage free in 8 years, age 40. I would not even look at a product like this unless you have 0 CC debt, no car payments, you are putting 15% of income away for retirement, and have a fully loaded 6 month emergency fund. I think if you have all of these in place then the MMA type programs can help you become that much more focused on your goal.

    Call me crazy but if I can save 2 years more off of my mortgage by spending 3500 I will gladly pay it. The focus and intensity of this program, nit the HELOC shuffle, is what makes it work.



  14. JoeTaxpayer

    Adam, where did the $3500 come from? Had you sent it right to the mortgage, you’d have knocked off as much as 18 months right off the back end.
    What I am curious about, though, is that you describe the ideal customer, and that’s great. But your profile seems to be someone that can easily do this on their own. At month end, what exactly does the MMA tell you to do that you couldn’t do on your own? As you state you have the 6 mo emergency fund, HELOC need not apply. So at month end you can easily just send all funds over to the mortgage.
    Agents promote the magic, the few cents per month the HELOC shuffle helps them capture, but you seem to not even need to use the HELOC. Where are your savings? It’s all your own money.

  15. Kim

    Looking for advice. Everyone keeps referring to paying off their mortgage quicker, but no one is mentioning any additional debt. My husband & I have student loans, credit card debt, etc. I like the idea of a program telling me what to pay & when to pay it. Call me lazy, but I prefer mom. I would rather spend my time with my daughter than trying to figure out who to pay first & how much to pay them in order to keep my interest payments to a minimum & pay off my debt quickest. We already have a $50,000 line of credit established. Would an MMA from a less expensive provider like Equity First be a good investment? Any advice is greatly appreciated. We need to do something to help us reduce our debt quicker. Thanks.

    • bob

      I wouldn’t touch an MMA until you have your debt situation taken care of… The system is designed for people who have a whole lot of financial discipline, if you are looking for someone or “something” to tell you what to do I don’t recommend using an MMA – I know that some of them have that feature, but without a lot of self-discipline, I don’t suggest getting involved in an MMA

  16. JoeTaxpayer

    Kim – What is larger, 18 or 12? If you can answer that, it’s simple; make all minimum payments, then, at the end of each month, pay all extra money to the highest rate debt.

    If you can swear off charging more than you can pay each month, then paying off the cards with the HELOC can work, but it’s a slippery slope. I’ve seen people take $10,000 of 18% debt, put it on a 6% HELOC, and then charge the cards right back up. I can’t stop you from doing that, nor can MMA. It’s a scam for sure, you can see links on my blog, and endless posts where I go through the math.

  17. Steve Orris

    What I find most interesting here is that people are taking advice from those who have never used a money merge account. If I were to buy a GM (I currently own a Ford) I would not talk with people who only drive a BMW or Chrysler. I would talk to people who are driving what I am thinking about buying. It’s like getting advice on raising kids from someone who doesn’t have any kids. Think about it, and consider the source.

  18. JoeTaxpayer

    Why is that? Given the nature of the product (i.e. a scam) users are those already to be innumerate, and therefore incapable of understanding the product itself and victims of the scam.

    Your logic is how Madoff got so many clients. Think about that. Almost by definition, the users are happy, either ignorant of their own situation, or agents trying to peddle this to the next mark. Look at the numbers, more than half the users sign up as agents.

  19. JoeTaxpayer

    Sorry for the double post.
    Steve, are you agent number 868691?
    I’d expect you to disclose that, so readers here can consider the source. I should have been tipped off by the analogy. No agent that I found yet can discuss MMA without comparing it to something completely unrelated. I like to compare MMA to getting robbed of $3500 at knifepoint, only there’s no knife, and you’re happy to give the money away, thinking you get something in return.

  20. Adam

    I purchased the UF MMA in September. Bottom line: It’s not a scam but it does NOT pay your house off any faster. The HELOC shuffle does not net a single penny in increased savings or payoff.

    The MMA takes every dollar of any money at months end and puts it against your note. If you have the discipline you can do this yourself easily.

    I purchased the software due to the fact that I received a written guarantee of a 9.5 year payoff where as with my current extra 800/month in payments yielded a 14.5 year payoff.

    What I later realized AFTER I purchased the program is that the rep took my monthly income and put it down as bi-weekly instead of 2x/month…. This added another month of income which I do not earn. Thus the extra 5 year payoff.

    Do not buy these programs!! Get on a written budget and empty your checking acct each month against your note. Before doing this type of aggressive pay down I would have a fully funded EMERGENCY FUND of 6 months expenses!!!

  21. Stephanie Halpin

    My husband and I have been utilizing the MMA software since February 2008 and will be mortgage free November 2013. Our original mortgage was $289,000. We are in a unique situation where we are debt free except for our mortgage, have an excess of money in our account each month after bills and continue to stick to our monthly budget.

    If anything, it has allowed up to recognize the areas in our monthly budget where we were over-spending and have been able to tighten our monthly budget even more. For example, we are eating at home more vs eating out!

    I would agree that this program is not for everyone but it made sense to us. We ran the various spreadsheets and needed the software support to stratiegically transfer the money to our mortgage in order to save the most. I will be a true believer if we are in fact mortgage free in November 2013!

    My advise: do your research and be honest about your ability to stick to a monthly budget.

  22. JimmyDaGeek

    “Using the banks money” – We started out by taking out a loan called a mortgage, using the bank’s money. Now that it’s time to pay the loan back, we need to get the money from somewhere. Usually, it comes out of our paycheck. But MMA claims that if we use a HELOC, we are not using our money anymore, we are using the bank’s money. But, wait, we started all this by using the bank’s money to take out a mortgage and now we have to pay it back. So that means if we use the bank’s money by taking a loan out of the HELOC, we have to pay that back, too. So all we did was postpone having to pay the bank back by using the HELOC money to pay the mortgage. We still have to pay the HELOC back. Where is that money going to come from? Out of our paycheck. So why should we spend $3500 on MMA to play a money shell game with a HELOC?

    “Interest cancellation” – MMA claims that by loading up the HELOC and running our paychecks through the HELOC, we reduce the balance so much that we save lots of money that way, and that alone is worth $3500. OK, so how much can we save? Well, let’s assume our mortgage rate is 6%. That means each month, we are charged 1/2% on our mortgage balance, the whole balance. But if we are using interest cancellation, the most that we can save is whatever our monthly salary is. So, if we bring home $5,000, the largest HELOC balance we can offset is $5,000. How much will that save? $5,000 times 1/2% is $25. That’s $25 per month or $300 per year. So MMA wants you to spend $3500 upfront to save $300 per year. Do you know how much interest you would save if you just put $3500 towards your 6% mortgage? OVER $4,000.

    “Factorial math” – MMA claims no one except a computer can figure out the best possible way to pay all your bills and debts because of all the possible combinations. LIES. There is only one SIMPLE BEST way to pay off all your debts. You pay off the highest interest debt first and work your way down using a DEBT SNOWBALL. It only needs addition and subtraction.

  23. JoeTaxpayer

    Jimmy, you are more right than you know. At 6%, the $3500 turns into $20,000 over 30 years. Not just $4000 savings, but $16,500 in saved intest, plus the $3500 you didn’t throw away. $20,000, my friend…..

  24. JimmyDaGeek

    Yes, =( you are right. I reran my calculations for other posts.

  25. JoeTaxpayer

    Well, I prefer to think of it as “Jimmy was righter than he thought” esp considering the board we are on. Safe holiday to all.

  26. Paul C

    It seems it makes sense to use a HELOC to pay on a mortgate ONLY if the int. rate on the HELOC is less than the mortgage. This might be likely now. However the risk is that the int. rate would go up before the HELOC is paid off, (or rate locked in). But if you want to do this, I don’t see paying for some service.

    Suppose the interest rates were the same. If you took 50K HELOC to pay off a 50K balance on your mortgage you haven’t really paid you mortgage – what you’ve done is change your mortgage from a fixed rate to floating rate, perhaps with a different term (length). If you want to do that, do so, not through some money shuffling program.

    The service is really only a way to “force” you to put more on your mtg. account, it appears. If the discipline reinforcement is worth the fee, fine. But there’s no magic you are paying for in my opinion.

    Using a 0% card offer to pay something on the mtg could make sense but could be risky due to the “gotcha’s a previous poster mentioned (pay one day late, and the interest rate might be 30%?

  27. Dee

    You can’t talk about a program with any credibility unless you tried it for yourself. You are on the outside of the pool talking about how good the water feels. This program not only deals with your mortgage but all of your debt. I will be out of debt in less than 6 years. That is a savings to me of over $184,00.00. Why wouldn’t I pay 3500.00 to have a program guide through the financial maze. You continue to talk and I will continue to save. Let’s see where you are in six years with your debt. I will be the one laughing all the way to the bank and you will still be talking and be in more debt.(Smile)

  28. JoeTaxpayer

    Dee – It’s amazing to me how no agent can ever comment without at least one bad analogy/metaphor.
    I can talk with credibility. Having aced 5th grade math, and proud of it, I can tell you that the process of debt repayment is not nearly as complex as agents make it appear. Pay all bills’ minimum required, then with any/all extra funds, send to the highest rate debt. Period. There’s no math involved beyond knowing that 18% is greater than 12% is greater than 6%.
    I also know that the HELOC shuffle can be a tool to save a tiny extra amount while adding quite a bit of risk. The most the shuffle can save is less than the cost of the program.
    I also know that similar programs in Australia are getting shut by their own SEC, and Canada is on the way to doing the same.
    If you’ve never heard of Harry Markopolos, I suggest you google his name and think very carefully before you make your own unsubstantiated remarks.
    To stick to your analogy – I am outside the pool because I see the thermometer tells me the water is 150F due to a broken thermostat on the heater. I don’t need to jump in to confirm that and scald myself.
    Anyone with the same math skills (5th grade is all they need) can find they’ll save $20K+ by not buying the program, but just sending that $3500 to their mortgage as a prepayment, or of course, to their highest interest debt.

  29. JoeTaxpayer

    Patrick –
    You can tell me yourself. You just did.
    To make such a statement to me tells me you know nothing of me or my writing. I don’t tell people to keep their debt, on the contrary, I offer a free spreadsheet which helps people track the benefit of early payments which people can make on their own when it makes sense.
    Me, personally? Early payments fit into my plan, but not before things like my matched 401(k) and other retirement savings, and my daughter’s college fund.
    The truth about UFirst is that only 25% of paid clients have signed into the program in the last three months. This speaks volumes about how cumbersome the system is to use and how people lose their excitement when they see how it works in real time, not in a demo run solely for the purpose of selling this scam.
    As far as the enjoyment of my debt, I enjoy the fact that my 5% mortgage costs me 3.6% after taxes, yet my DVY shares in my IRA now yield 5% of their original cost and over time, will continue to grow. So, no, a guaranteed return of 5% that I can make by paying the mortgage off is not quite as exciting as you make it out to be. I’ll have it paid by the time the kid is off to college, which is in 7 years. College is already fully funded. So when she gets on the plane, we’ll decide whether to retire. You see, the mortgage was never more than a bill, a line item to be handled, not the emotional baggage and satanic cloud over my head that you’d suggest.

  30. Bob

    I wrote the post a long time ago, so I am not sure if they are still in business, but I updated the links to their site (which were broken)

  31. JoeTaxpayer

    Patrick – I don’t know if you are responding to me or someone else.
    You are an MMA agent, no? I ask because your writing fits the profile. The caps for words like “fact” or “free”, the hyperbole regarding MMAs value, and last, the analogies.
    I am not upset. My writing comes off that way as I am incredulous at how innumerate the average person is. More so, how they get worse when a dollar sign is put before the numbers.
    As an MMA agent or at least a seemingly happy user, what do you care about Smart Equity? Their site reads virtually the same as any MMA site. Same misleading claims, same analogies, same hyperbole. Google is your friend. I won’t create a link from here.

  32. DR

    I am looking to launch my own version of this software tool. I was shocked when I initially found out how much it costs to purchase the two leading software product tools. Please let me know if you are interested in evaluating our tool as it’s currently in beta and we would like to launch our version to help Canadians budget, set financial plans, and track monthly spending.
    The purpose of our tool is to encourage that credit card debt in any shape or form is bad, and we are asking our users to take the time to investigate and read the fine print in their credit card agreements and other bank documents.
    If my software tool can accomplish these items for Canadian households then I am happy to launch this product with the intent to help people rather then come up with fancy marketing ways to display numbers.


  33. JoeTaxpayer

    Patrick –
    My name, on the reply, is linked to my extensive list of MMA references across the web.
    The first link on the page is the download for the sheet.
    Properly done analysis sheets are +/- a couple months or so of my sheet. A number of agents use my sheet to verify they don’t have a data entry error on their customer analysis. When mine says 12 years and the MMA software says 9, to me the error is pretty obvious. Let me know you got the sheet ok.

  34. MortgagesbyMark

    I’ve done some research on this and it actually can be hugely beneficial, but you do need to have your finances in order. The people selling these programs often are offering expensive software to track the progress of the program. I’m sure the software is really good, but if you’re pretty handy at Excel, you can crunch the numbers and figure out how this works. Essentially, the money merge works by doing two things:
    1) Lowers overall interest expenses on a monthly basis
    2) Accelerates the payoff of your mortgage
    When you transfer a large chunk of money off your mortgage onto a revolving credit line, you accelerate the payoff of the mortgage because you’ve just made a lump sum payment and the next regular payment will now pay a larger proportion of principal. Now that you have the credit line balance, the idea is to “deposit” your paychecks directly onto the credit line so that the balance and accrued interest is very low throughout the month. The credit line is revolving, so you can write checks off of it very easily for your expenses. The idea is to keep the credit line balance as low as possible all month so your accrued interest is as low as possible. Once your regular check “deposits” payoff the credit line, roll another chunk of the mortgage onto your credit line. Doing this can eliminate years off a mortgage if implemented right. Before attempting, definitely do some research on it so you thoroughly understand how it works.

  35. JoeTaxpayer

    Mark –
    Your last thoughts suggest “if implemented right.” The UFirst Money Merge Account is flawed, badly, and I have proven that many times over. The idea of using a slightly higher rate HELOC to pay off a mortgage faster can work, but if, and only if, the HELOC balance is kept to an optimum minimum balance on average. MMA fails to do this. The very first draw from HELOC tell you to borrow an amount which has a daily interest expense greater than the daily interest savings on the mortgage. Agents are well versed in how to divert the potential client’s attention away from this fact. “$1 paid now to the loan will save you $5 in interest over 30 years, but only cost you a few months HELOC interest.” Indeed, but during those few months, your money is wasted. Why not just send the extra $1000/mo that MMA assumes (for their example) right to the mortgage? In fact, why not send the $3500 right to the mortgage and see an immediate $16000 interest savings from day one?
    Data from UFirst itself admits that only 25% of paid clients have signed into their account in the prior 3 months. The system is cumbersome, time-wasting, and mathematically flawed.

  36. Huh?

    Joe, I understand that you aren’t too happy with UFirst. I’m not sure where you get your information though. Nor do I agree with your math. I bought the Money Merge Account system and yes, I sell it – because I believe in it. Thousands of other testimonials on the UFirst web site tell a different story than what you say. Plus, why do you keep talking about a HELOC when the MMA system has not required that for a while. Get up to date info on something if you want to argue against it. The product is continuing to evolve and improve with every update. And you are still using the same arguments that I heard three years ago. The value is worth the price to a lot of people.

    BTW Joe, have you actually used the UFirst system, or are you just guessing that you have it figured out?

  37. JoeTaxpayer

    Well, “Huh”, no, I guess I’m not happy when I see an ongoing scam. Harry Markopolos wasn’t happy with Madoff, and no one listened for nearly 25 years.

    I’ve seen the dashboard agents access to produce an analysis, and have proven the underlying math used is flawed. I “keep talking” about the HELOC shuffle because nearly every agent offers the same flawed examples which use it.

    When MMA reaches its own perfection, it will be to offer this advice for $3500 – “pay all bill’s minimum payments each month, then send any and all extra funds to your highest interest debt.” That’s it. That beats MMA every single time. The potential client who takes that advice is done with his mortgage a full 18 months ahead of those who sent their $3500 into this scam.

  38. Huh?

    Joe, you have a right to say what you think. The 1st amendment gives you that. But as for me and thousands others, we will continue to use what we know is not a scam. There is a huge difference between the analysis and the program. But since you haven’t used the program maybe you don’t understand that.

    Peace, brother.
    And good bye.

  39. JoeTaxpayer

    “Huh” – I understand it all perfectly. I understand how and where the supposed savings are coming from and that MMA lags DIY (do it yourself) by a clear margin. I understand that most sales are from an agent to one client only, that the sales organization is MLM, with pressure to become an agent.
    I understand that only 1/4 of paid customers are using it now, and I understand that UFirst is shopping itself out trying to find a willing buyer.
    But, more, more than anything, I know that there is “zero qualification” to sell this product. So we have tens of thousands of agents offering financial advice while lacking the most basic math skills. Of course, if I quoted any of the absurd statements they’ve made, you’d cite them as anomalies. Agents who have gone rogue.

  40. MortgagesbyMark

    Hi JoeTaxpayer, I haven’t actually looked at the UFirst program, so I can’t speak to it specifically. I can only speak to the actual concept of money merge, which seems to work well as far as I can tell. But again, you have to implement it right. I ran scenarios with an Excel spreadsheet that seemed to show that it really does work.

  41. JoeTaxpayer

    Mark, two years ago I was invited to guest post an article on what I called the “HELOC shuffle” , a google will turn up my article usually first hit. The conclusion is that the savings on a properly implemented shuffle is limited by specific factors which can be calculated. In the case of UFirst, their implementation is flawed as can be shown by any examples their agents offer that show more than a few months’ cash flow.
    Of course, the shuffle itself sneaks into being a potential saver when the rate drops below the mortgage rate, my HELOC is now 2.5% vs a 5% mortgage. My only concern is whether short term rates rise before the balance is paid off, so I’m not as aggressive as I might be.

  42. D Rehou

    Hi Guys,

    I wanted to introduce myself, my Name is Derik and I am a licensed mortgage agent in the Ontario Canada. I became a mortgage agent after closing down a software company that I ran and operated for 5 years through to an IBM acquisition. When I first became a mortgage agent my plan was to also look at the possibility of creating a software product for the Mortgage industry. I am now at the end of building my software product and would like to review it with people that have a good understanding of MMA as my product uses much of the same principles. I think we’ve produced a product that is leaps ahead of Smart Equity, and provides clients with details of what’s happening that UFirst doesn’t include. My model is completely different and the product will be sold through reselling channels at a very reasonable price (no where near either price tag) My Goal here is to help the masses help themselves. While my product will not be able to help everyone the are a vast number of Americans and Canadians that desperately need the budgeting, tracking, accountability, and a look at their house hold finances in a new way. I look forward to speaking to anyone about my product that may have some interest.


    • Kevin

      Could you please send me the name and website for you new product (if it is still existence)

  43. Brad
  44. JBarber

    bob “using the HELOC to shift the funds amplifies the process by basically charging a whole lot less interest on a large chunk of money and systematically repeating that process”
    HokieFan1 “Here’s the kicker, I think. If you look at the smart equity page, UFF, etc… they do pay down much faster than if you just add your extra cash flow to your note.
    If I go to an amort schedule and type in 250k at 6% for 30 years with an extra 1k per month it pays off in 11y 8 mo.”
    Do some basic checking before you spout these LIES. HERE’S THE FACTS
    $250000 @ 6% for 30 years total is Interest per nososmart equity is 97,508.67 with 140 payments
    $250000 @ 6% for 30 years total is Interest per BankRate calculator is 97,508.87 with 140 payments
    Using in both, assume an income of $5000 expenses of $4000 and $1000 going to extra payments
    Your amplification is twenty cents!!
    This doesn’t even include the $695 cost for this crap!!
    Say that was cash you paid for this crap and I paid the $695 to the mortgage Interests total is $96,918.80 and one less payment. I saved $589.87 in interest plus $695 for a total of $1284.87