Money Merge Account: June 2007

June 7, 2007

United First Financial Money Merge Account + Credit Card = Rewards and Faster Payoff

This was a cool way my brother showed me on how to gain an extra 6 months off your mortgage and rewards by using an American Express credit card with the Money Merge Account from United First Financial.

The secret to paying off your mortgage with the Money Merge Account is all about interest cancellation and the amount of time your money can sit in the HELOC. The problem is bills come throughout the month and most people pay them right when they get them. Instead of paying your monthly bills from your HELOC, why not put them on an American Express card and then payoff the credit card at the end of the month.

American Express charges an annual fee on the One Card, but doesn't charge you interest if the balance is paid in full every month. So, you charge any bill you can to the American Express card and then pay it off at the end of the month.

By doing this, you will see that you payoff your mortgage about 6 months faster AND you earn rewards from American Express from all the charges you put on the card. So, my brother choose the One Card since it pays him 1% of his monthly balance and puts that money in a high yield savings account. At the end of the year, he can withdraw the money and apply it to his mortgage. What a great idea!!!

Now, you can't put all your bills on the American Express Card. His electrical company, FPL, wouldn't allow him to charge his bill, but almost every other bill he had would.

If you are on the Money Merge Account program, run the scenario yourself to see how much sooner you will payoff your mortgage by doing this.

June 6, 2007

Bi-Weekly Employees and the United First Financial Money Merge Account

In my last post about John Doe and his Financial Planner/CPA telling him to invest his discretionary income instead of paying off his mortgage early, we saw that John Doe would payoff a $200K First Mortgage at 6% Fixed Interest for 30 Years in about 10.4 years or 125 months. When I did this example I input John Doe's income as bi-weekly. Believe it or not, if you are an employee who gets paid bi-weekly, you will payoff your loan faster with the Money Merge Account from United First Financial then if you applied your discretionary income yourself to your mortgage. Don't believe me? Let's run some numbers:

Bankrate.com has a easy to use mortgage amortization schedule which allows you to see how fast you can payoff your mortgage if you applied more to principal. You can view it here: Bank Rate Mortgage Amortization Calculator

Now, let's input John Doe's scenario: $200,000 Loan, 30 year Fixed at 6% and we get a payment of $1,199.10. Now lets input $500 in the box for adding additional monthly funds to your mortgage. The calculator tells us that John Doe would payoff his mortgage in 14 years and 11 months.

But wait!!! Charles, you are wrong!!! John Doe gets paid bi-weekly, so that $500 in discretionary income is more! You are right, John Doe actually gets paid 26 paychecks a year, not 24. In case you don't understand, there are 52 weeks in a year, so a bi-weekly person gets a check every other week or 26 total paychecks. So, his monthly discretionary income is really $500 x 13 = 6500 / 12 = $541.

So, if we put $541 in the calculator, we see that John Doe will payoff his mortgage in 13 years and 10 months. Still, it doesn't beat the Money Merge Account of 10.4 years.

Why is that? The answer to your question is cash flow and interest cancelation. Because the Money Merge Account Software knows the customer gets paid more frequently it will apply more from the HELOC to the first mortgage to pay it off faster and take more advantage of the interest cancelation.

So, let's see. John Doe and make the principal payments himself and will pay more then 3 full years of mortgage payments or $43,164+ OR he can use the Money Merge Account software, pay $3500 and save $39,000+. Which one do you think he should do???

Truth of the matter is anyone who gets paid bi-weekly from their employer needs to have a Money Merge Account and use the Software. Numbers don't lie.

June 5, 2007

News Report on United First Financial Money Merge Account

Channel 3 News from Las Vegas recently did a report on the Money Merge Account from United First Financial. Check out the video!!!

My Financial Planner/CPA Said...

If there is one thing I can't stand is people who think paying off your home is a bad thing. I talk to many people and most of them talk to their Financial Planners or CPAs and want to get their opinion on the Money Merge Account from United First Financial. The most common response I get is their Financial Planner/CPA said that instead of paying off their mortgage to use their discretionary income and invest it.

Now, I'm not a Financial Planner or CPA, but I do have common sense. I've ridden the investment roller coaster many times and lost my butt (remember the Internet boom in 1998). So, I don't understand how someone can give advice where it would be better for a person to put money in an investment instead of paying off their mortgage FIRST, THEN investing.

To put this to rest, let's look at some hard numbers:

John Doe gets paid bi-weekly and has $500 in discretionary income. He has a mortgage of $200,000 at 6% 30 years fixed which has a payment of $1,199. Using the Money Merge Account, he would pay it off in 10.4 or 125 months.

Now, click on the below link to go to a investment calculator:

Investment Calculator

Let's say John Doe instead of using the $500 a month to payoff his mortgage instead invested it and was able to get an 8% yearly return (remember to put the starting balance at $0). Punch this into the calculator and we get $745,179.75. Not bad.

Now let's do the same thing, but we are going to decrease the number of years to 19 (because he spends the first 10.4 paying off his mortgage) and increase the amount we contribute to $1,699 (which is his mortgage payment plus the $500 discretionary income). By doing this, he would end up with $904,518.69.

So, by paying off his mortgage first and then investing his mortgage payment and discretionary income, John Doe ended up with $159,338.94 more. The great thing about this is John Doe's mortgage is paid off, so even if the investment started to do badly, he can always use the money somewhere else, BUT HIS MORTGAGE IS PAID!!!

So, do you think your Financial Planner/CPA really has your best interest in mind??? Think about it, even if the numbers were reversed, would you sleep better at night knowing your mortgage is paid off and you had $159,338.94 less after 30 years? I don't think you would hate me for that.

June 4, 2007

Case Study...

Even though refinancing is not required to participate in the Money Merge Account from United First Financial, sometimes it could save a person a number of years off their mortgage. I had a client call me up asking about the program after I emailed him a link to the online presentation. Their current mortgage was an option ARM (negative amortization loan) and they owed some money on their second mortgage and credit cards.

I first did a Money Merge Analysis without refinancing any of their debt and their numbers showed they would payoff their mortgage in 8.4 years. Not bad...

I then did another Analysis with refinancing their first mortgage, second mortgage and credit card debt into a new 30 year fixed rate first mortgage and they would payoff their loan in 6.4 years. Now that's cool!!!

So, I can easily show the client that by refinancing their mortgage, it would save them 2 years worth of mortgage payments! Just so everyone knows, I'm doing the refinance as a no-closing-cost deal so their principal balance doesn't increase. Even though the rate on these deals is higher it didn't even add a month to their loan payoff.

I love this program!!!

The Cost of the United First Financial Money Merge Account

The Money Merge Account is not free. United First Financial charges $3500 for the software to help walk a person through the process and track their results. While most people look at this as an out-of-pocket expense, the truth is most of us agents have the client borrow the money from their ALOC (a fancy name for a home equity line of credit). Gotta love America, borrow money from the bank to pay them back faster!!!

I think my brother said it best, "I know that I'm going to follow the program since I have an investment in it." Very wise words.

It is true, you can easily make extra principal payments and you will achieve similar results, but if you aren't doing it now, then when will you? Also, how long will you continue to do it and at what point will you stress yourself out because you don't have a "rainy day fund".

If you are they type of person (and you know if you are) who is the champion of half finished projects, then this program is definately right for you. The investment in the program and software will make sure you stick to the plan, won't stress yourself out and get your mortgage paid off early.

What Is The United First Financial Money Merge Account and How Does It Work?

Most homeowners realize they will pay about twice the purchase price of their home on a traditional mortgage—a mortgage that will take about 30 years to pay off.

Introducing a way to break that cycle of financial drain—the Money Merge Account from United First Financial. Developed by a team of financial experts with years of experience in the mortgage industry, the Money Merge Account rapidly reduces the principal of your mortgage, practically eliminating the interest from accruing on your loan. Your 30-year mortgage can now be paid off in about 8 to 11 years, with no change to your lifestyle or refinancing of your existing mortgage.

The Money Merge Account is not a bi-weekly payment or debt roll-down system. It’s an entirely new approach that gives homeowners flexibility with their money and complete financial freedom.

The Money Merge Account consists of three major components:

1. Your Existing Primary mortgage:

The existing mortgage on your home is the foundation for the Money Merge Account.

2. An Advanced Line of Credit (ALOC):

The Money Merge Account Program uses an advanced equity line of credit as a vehicle or a tool to drive the program. The equity line of credit must have the capacity to operate similarly to a primary checking account and be set up with an open-end interest calculation (rather than a closed-end interest calculation). Combined with the Money Merge Account's web-based system, this creates a formula in which the money in your line of credit account generates an interest cancellation on your primary mortgage.

3. Money Merge Account software:

The online Money Merge Account system makes a connection between your bank account, the advanced line of credit, and your primary mortgage. Each time you deposit income into your account, it registers as a decrease to your mortgage balance. By decreasing your mortgage balance, you now lower the balance on which interest accrues. By decreasing the balance on which interest accrues, you increase the portion of your monthly payment which is credited toward your principal pay down. The algorithms in the proprietary Money Merge Account system are systematically programmed to create the highest interest savings possible in the least amount of time.

How Does The Money Merge Account Work:

To Become Mortgage Free is as easy as 1...2...3

1. Deposit Your Paycheck: Deposit your paycheck into your current checking and/or savings account. As soon as the funds clear, the amount you designate is transferred from your checking and/or savings account into your Money Merge Account managed line of credit. Because the line of credit is connected to your home, the money transferred from your checking and/or savings accounts decreases your mortgage balance, thus reducing the balance in which interest builds.

2. Pay Your Bills: Throughout the month, you pay your bills using your Money Merge Account managed line of credit. With this account, money is immediately available through checks, debit cards, and ATMs. The amount left after bills have been paid remains against the balance of your mortgage until you need it, keeping your mortgage balance as low as possible, further reducing mortgage interest charges.

3. Follow the system: Follow the promptings of the online Money Merge Account system to maximize your savings and pay your mortgage off as quickly as possible.