Comments on: Pros and Cons of Money Merge Accounts

By: Brad

Brad — Wed, 02 Feb 2011 17:46:57 +0000

Derik,
I’d like to speak with you. Please send your contact details to me at bbalmer@rogers.com. Thanks,

By: D Rehou

D Rehou — Mon, 03 Jan 2011 19:29:19 +0000

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.

Derik

By: JoeTaxpayer

JoeTaxpayer — Mon, 03 Jan 2011 14:18:00 +0000

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.

By: MortgagesbyMark

MortgagesbyMark — Mon, 03 Jan 2011 05:21:09 +0000

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.

By: JoeTaxpayer

JoeTaxpayer — Thu, 30 Dec 2010 22:10:42 +0000

“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.

By: Huh?

Huh? — Thu, 30 Dec 2010 21:05:07 +0000

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.

By: JoeTaxpayer

JoeTaxpayer — Thu, 30 Dec 2010 20:24:40 +0000

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.

By: Huh?

Huh? — Thu, 30 Dec 2010 18:27:51 +0000

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?

By: JoeTaxpayer

JoeTaxpayer — Thu, 30 Dec 2010 17:21:12 +0000

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.

By: MortgagesbyMark

MortgagesbyMark — Thu, 30 Dec 2010 15:59:20 +0000

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.