First, let us get these statements out of the way before we tackle this issue: Money Merge Accounts (or Mortgage Accelerators) are real. But the more important question is “do they work?” The answer to that is “yes.” But, here is where there is a great divide on the philosophy about these systems: You can do the same thing that these programs purportedly do only you will not have to pay between $2,000 and $6,000 for a fancy program.
The chief opposition to that statement is that most people will not and do not have the discipline to make extra payments on their mortgage, so this program sets them up to pay off their mortgage sooner and save money on interest, while putting their finances on ‘autopilot.’
Here’s the relevant question for those who are pushing a MMA: Is the purpose of this program to save money on your mortgage interest or is it to create discipline on the part of the individual? If it is to save money on interest, again, you can do that on your own. If it is to create discipline, that can be accomplished without spending ANY money. So the MMA provides no advantage on either point.
Keep these issues in mind when being hounded by those who (with good intentions) are attempting to get you into this type of program.
- These programs are not free and they do not save money in a manner that would make it worth the costs that are required to enter the program.
- Most of these programs require you to have a HELOC (Home Equity Line of credit) which brings with it additional problems and costs.
- Consider that paying off your mortgage faster/sooner might not be the best use of your money.
Finally, if you are looking for an automatic way of paying your mortgage every month, or bi-weekly, that can be arranged by having your paycheck auto-deposited into a bank account which allows you to set up a bill scheduling and payment plan in order to make your payments for you. Using this technique, you can make that extra payment every year and never have to raise a finger to make it happen.
There are many tools and options available for those who want to use them other than paying a very high amount of money just to get into a fancy bill payment system that is demonstrably not better than just using your own resources and common sense. Let the comments on this issue begin.
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4 users resposed " Money Merge Accounts – Are They Real and Do They Work? "
May 2 2009
What a wonderful post…thank you for clarifying those issues.
Warmly,
Jim
http://www.JamesOatesIII.com
May 18 2009
Great post. The failings of the Money Merge Account (and other mortgage accelerators) and sometimes near deceptive marketing of some of the MLM agents that push the “magic” of them without even understanding the true math behind them have been covered in many places on the web.
James Oates III, I see you are a UFF agent yourself. Have you responded to C. Hansen’s post to your blog that you have yet to publish? Here is a link to refresh your memory:
http://www.scam.com/showthread.php?p=754599#post747464
-L2G
June 10 2009
[...] presents Money Merge Accounts: Are they Real and do they Work? posted at Fine-Tuned [...]
July 3 2009
“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 $16,000 and 16 months. (Not $4000 as I said in a different post)
“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.
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