Over the last few weeks, I’ve been researching and reporting on the United First Financial Money Merge Account. UFF’s “agents” are poorly trained multi-level marketing pawns who spout company propaganda about how the MMA is the greatest thing since sliced bread.
I was recently directed for United First Financial’s FAQ page. I had seen this page before, but looked at it today with an entirely different perspective. With my research on the product nearly complete, I am able to see a number of distortions and deceptions in this page.
And the company can’t claim (like many MLMs do) that they’re a victim of independent contractors who are misrepresenting things. These are corporate’s own representations about what the product is and does.
Here’s a the UFF story paired with simple facts:
UFF: The Money Merge Account system is a powerful tool that enables homeowners to pay off a 30-year mortgage in as little as one-third of the time, without refinancing their existing mortgage or increasing minimum required monthly payments.
Fact: The MMA doesn’t “enable” you to pay off your mortgage early. You can do it for free all on your own. Just pay more, sooner. And no, you don’t “increase minimum required monthly payments” with MMA, you just add extra money to those required minimums. (How would one increase a minimum required monthly payment anyone? Call your creditor and say “Can you please increase the minimum monthly payment I must make?)
UFF: By repositioning your income against the line of credit, the line of credit lender will credit the monthly payment requirement and lower your daily average balance, thus reducing interest charges. Any money that you don’t spend, that would normally be “sitting stagnant” in your regular checking or savings account, remains against the balance of your loan until it is otherwise needed, further reducing interest charges.
Fact: What they don’t tell you is that this “repositioning” of your money saves you very little. If you had a $3,000 balance usually sitting in your checking account, you would save a maximum of $15 to $20 a month with this money shuffle. That’s sure not worth paying a $3,500 fee for the program. Nor the fees it will take to get up and running with a HELOC and keep the HELOC while you’re in the program.
UFF: Because of how the Money Merge Account system works, homeowners now utilize their unused idle money and expense money to help reduce interest charges on their line of credit until it is otherwise needed, without increasing their minimum required monthly payment.
Fact: A mortgage doesn’t get paid off early without paying more money sooner. Again, UFF uses the phrase “without increasing their minimum required monthly payment.” You don’t increase the minimum. You add to it, which means you’re paying more on the mortgage.
UFF: From a financial standpoint, there is very little risk.
Fact: This is funny. The risk with UFF is that you’re giving them $3,500. That could be used to pay down your mortgage and save you almost $20,000. DON’T DO IT.
UFF: How can a higher interest line of credit help to pay off my lower interest first mortgage? Can you give me more information on the workings of this program? When repaying a mortgage, it’s not the rate you pay that’s most important. What matters most is the total amount of interest you pay over the term of your loan. With the Money Merge Account system you use your line of credit to reduce the balance owing on your primary mortgage, blah blah blah…
Fact: It never makes sense to use debt with a higher interest rate to pay off debt at a lower interest rate. Take your $3,500 and apply it to your mortgage. You’ve already saved far more than the UFF program can ever save for you. Then when you have extra money, apply it directly to your mortgage. That’s how you pay less in interest. You don’t need UFF to do this.