Comments on: Fun with numbers: I can save you $19,714 (without United First Financial)

By: United First Financial: Don’t believe the hype | Sequence Inc. Fraud Files Blog

Tue, 20 Oct 2009 16:45:22 +0000

[...] the UFF program. Instead, apply your $3,5000 directly to your debt with the highest interest rate. You will save over $19,000 over the life of your mortgage by doing [...]

By: Shellynm

Shellynm — Tue, 14 Jul 2009 21:53:43 +0000

Amazing that people would pay that much for such an obvious plan. Pay more of your principle than the minimum. $3500 for what could be done with a spreadsheet or a simple plan. MLM’s are dangerous things in general. You can’t possibly get value from products that pay so much to the salesperson and who knows how many upliners. They create a fervency and zeal in their members that defies all logic. $3500 for this product is such obvious rubbish. If you can’t figure out that you need to pay high interest credit cards off first, I guess there’s no helping you. If you don’t know how to set up a spreadsheet to make a schedule up that pays off your mortgage early, any accountant or tax preparer could help you out for a very small fraction of their charges.

By: Craig Hansen

Craig Hansen — Thu, 18 Jun 2009 04:31:52 +0000

JB and MinnItMan, I couldn’t really tell you which of you is right. First, I don’t live in any state – I’m north of you, eh? Second, I’m now mortgage-free (because I applied more money to my mortgage) and don’t care to review the old paperwork.

Being mortgage-free is great, and if I had bought the MMA, it would have taken me longer.

By: MinnItMan

MinnItMan — Sat, 13 Jun 2009 23:28:47 +0000

I’m pretty sure that JB has no clue what he’s talking about. A “first mortgage” is a “first mortgage” in every state I’m aware of, regardless of whether it’s a thirty year amortized debt, or a revolving LOC. Many states have anti-deficiency judgment and/or “single action rule” statutes where a secured creditor must chose whether to sue on the debt or foreclose its lien. In some, for example Minnesota, both remedies may be pursued, but foreclosure must be done judicially. It is widely understood by creditors that judgments so obtained tend to be uncollectible/worthless, so they raely occur.

By: JB Green

JB Green — Thu, 06 Nov 2008 21:20:24 +0000

Craig,

Your HELOC for a first mortgage may have been a good buy on rates, but others out there may not realize that first trust deeds have certain “features” that a HELOC in first position does not provide you.

Arguably, this is a feature that most don’t want to think about. First trust deed mortgages are tied to the property. In the event of default, the holder of that mortgage can take the property – but not pursue the borrower further. Not so with HELOCs in any position.

So, in the event one’s financial life falls apart and they default on their mortgage(s), the bank holding the first trust deed mortgage cannot go after the borrower after foreclosure expenses, interest when carrying it in their real estate owned inventory, and sales expenses exceed the amount of the sale. If the first is a HELOC, they can.

Second mortgages always could, regardless of type.

It’s one factor seldom considered when one refinances a home.

By: Craig

Craig — Tue, 07 Oct 2008 19:02:17 +0000

The other important point in this discussion of risk and how much cash to keep on hand, is that the MMA user has zero cash on hand – only debt and access to more debt.

Like I said above, you can keep access to more debt in a HELOC (in the second position), and just not use it until you have to. I had a HELOC for my first mortgage, because there was a “sale” on HELOCs for first-position mortgages and we could get a better rate (4.4%). We never borrowed against the HELOC (advances were charged at 6%), though the bank obviously wanted us to.

(In case of foreclosure, the mortgage or HELOC in the “first position” is paid first from the proceeds from the sale of the property, then the secured loan in the “second position”, and so on.)

By: Pete

Pete — Tue, 07 Oct 2008 17:41:38 +0000

Got it! Thanks for the info. The way they make it sound on their website, the deposit just goes against the mortgage and you can pull it out again when you need it — so I assumed that it was the same interest rate. I’m familiar with HELOC, though these days, I’ve had friends who’ve said that their line has just been turned off/ pulled right out from under them. We have a pretty big mortgage payment for our 3 unit bldg (6,700/month for the interest only) so I’d like to pay it down early as much as possible, but I’m also trying to keep cash on hand for emergencies in this shaky economic environment. I’ll check with my bank on the HELOC rates and see if that makes sense for us for the rates.

By: Craig

Craig — Tue, 07 Oct 2008 15:08:55 +0000

Pete, I’m about as risk-averse as people get. I kept a cushion in a savings account. How much is up to you. I kept enough in there for two months of expenses (probably too much), plus at least $1000 in chequing because that amount cancels my transaction fees (which would be a lot more than the interest I could earn with $1000).

Tracy is right that you can open a HELOC, and just not use it. Keep it for a rainy day. Any of the above approaches will beat the MMA, mostly because you avoid the $3500 boat anchor, and partly because borrowing from a HELOC at a higher rate of interest to pay a low interest mortgage violates math and common sense.

By: Tracy Coenen

Tracy Coenen — Tue, 07 Oct 2008 13:49:37 +0000

Pete – It’s called a home equity line of credit, which is what UFF uses. Your paycheck goes against your mortgage, but as soon as you need the money to pay bills, you’re drawing off the HELOC, which almost always has a higher interest rate than your mortgage. Our experts have run the numbers if you’ll take the time to poke around a little…. This money shuffle likely saves you about $15 a month in the best case scenario. For most people, the money shuffle will save them $2 or $3 a month. The annual fee for the HELOC often exceeds those savings, so you’re still behind even if you don’t pay UFF for their software and try replicate the system.

By: Pete

Pete — Tue, 07 Oct 2008 05:03:09 +0000

I read the United First Financial website, and this is how I understand it — please correct me if I’m wrong. When you get your paycheck, you deposit it into the “Money Merge Account” at which time your mortgage is immediately paid down be the amount of the deposit. After that, you pay your bills, etc from that account, and any remaining amount stays paid against the mortgage principal.

So it sounds to me like the difference between doing that and just making extra payments, is that if you need the money, you can get it back out. Right now, if I pay extra toward principal, but then find I need that extra money in a few months to pay for something else, I can’t get it back out from my mortgage.

I currently keep a “cushion” in my checking account for unexpected expenses. If I could keep that cushion, but while doing so have it sit against my mortgage principal that would be great. I’m sure it’s something that isn’t as expensive as United Financial’s product, but how do I get that, and what is it called?