Pay off your mortgage in 8 t0 11 years?

[george]

Saw this on the news the other day, the news team said they test drove it and was happy to report it actually works. What says you?

click on "watch mma video tour" at bottom of the page. United First Financial > Home

 

[4xquadrod]

Thats interesting... ... ... ...

 

[daveshoe]

Let's see--First you take out a credit line on your first mortgage. There will be interest on thatcredit line that will be at a higher rate than the first mortgage. I am also wondering what the charge would be for those wonderful algorithms that these guys provide.

The way I paid off stuff quickly was to get a 20 or 30 year mortgage based on the best rate I could get for the longest period. If 30 years had a similar rate to 20 years,I took the 30 year note. EARLY in the mortgage,throw as much extra cash into the beast as you can handle,[after setting up an emergency fund ,of course]. . Later,after you examine the bank statement,and the principal and interest payments are equal on your monthly statement,you can afford to be less aggressive in this reguard. Late in the mortgage,do not pay anything extra at all. your payments will be nearly all principal.

If you are interested in this new system,look before you jump. If this program is all they say it is,they should be able to reproduce a case history of an actual client,and each payment they make. It should be possible to isolate three things. 1. How much principal and interest was paid to the mortgage. 2. How much principal and interest was paid to the line of credit. 3. How much consulting fees and other expenses went to this company for their advice.

Take the whole shebang and simply apply the extra charges of 2. and 3. above to the bank principal of the first mortgage. Microsoft Money has just such a ''what if'' program that would let you determine if the simple application of these extra charges would be cheaper than this new system.

I would also run it by Clark Howard--they have a new service where you can contact them and they will call you back [for free]--beats being put on hold and waiting to talk on a nationally broadcast talk show.

Btw,I paid off my first house in ten years Oo.

 

[bighammer]

It's all good and well until you realize the equity line interest (simple interest) is calculated daily. Mortgage (or amortized) interest is monthly. :-laf

 

[george]

It's all good and well until you realize the equity line interest (simple interest) is calculated daily. Mortgage (or amortized) interest is monthly. :-laf

They tell you that from the getgo, instead of paying the minimum payment on the 2nd you basically deposit your entire check and the interested reduced right then and there. When a payment is made to the 1st, the interested isn't effected until the following month.

They did offer an actual client, a guy that is a valet parker here at a hotel. He came to the presentation and brought his mortgage statements with him for anyone that wanted to see. He was also interviewed on the news. His last statement said his home will be paid for in 4. 7 years. Everybody knows you can shorten a mortgage by thorwing more money at the principle but this program claims the same results without anymore money out of pocket than you are currently spending.

 

[MEby]

Smell a lot like a scam to me... .

 

[bighammer]

Not sure what the going rate for HELOCs are right now, haven't had one for a bit. I pay all my bills and throw the rest into the mortgage. All monthly expenses go on 2 credit cards that get paid in full every month so there's no finance charges. I guess I've been doing the same thing, but paying no interest.

I would guess they have a charge for their idea/service? That would probably take a bite right off the top. (where it counts the most)

 

[george]

Not sure what the going rate for HELOCs are right now, haven't had one for a bit. I pay all my bills and throw the rest into the mortgage. All monthly expenses go on 2 credit cards that get paid in full every month so there's no finance charges. I guess I've been doing the same thing, but paying no interest.



I would guess they have a charge for their idea/service? That would probably take a bite right off the top. (where it counts the most)

Have you viewed the film clip that I posted?

 

[george]

Let's see--First you take out a credit line on your first mortgage. There will be interest on thatcredit line that will be at a higher rate than the first mortgage. I am also wondering what the charge would be for those wonderful algorithms that these guys provide.

The way I paid off stuff quickly was to get a 20 or 30 year mortgage based on the best rate I could get for the longest period. If 30 years had a similar rate to 20 years,I took the 30 year note. EARLY in the mortgage,throw as much extra cash into the beast as you can handle,[after setting up an emergency fund ,of course]. . Later,after you examine the bank statement,and the principal and interest payments are equal on your monthly statement,you can afford to be less aggressive in this reguard. Late in the mortgage,do not pay anything extra at all. your payments will be nearly all principal.

If you are interested in this new system,look before you jump. If this program is all they say it is,they should be able to reproduce a case history of an actual client,and each payment they make. It should be possible to isolate three things. 1. How much principal and interest was paid to the mortgage. 2. How much principal and interest was paid to the line of credit. 3. How much consulting fees and other expenses went to this company for their advice.

Take the whole shebang and simply apply the extra charges of 2. and 3. above to the bank principal of the first mortgage. Microsoft Money has just such a ''what if'' program that would let you determine if the simple application of these extra charges would be cheaper than this new system.

I would also run it by Clark Howard--they have a new service where you can contact them and they will call you back [for free]--beats being put on hold and waiting to talk on a nationally broadcast talk show.

Btw,I paid off my first house in ten years Oo.

I checked with Clark Howard, all they could do was refer me to BBB. After checking there, all I found was there was no complaints in the last 36 months

 

[scootergmc]

Well, after some internet reading I guess it's not a scam, but tracking the $ makes your head spin after a while. Basically the HELOC is a just a floater account. Looks to me like you could do this without purchasing their $3500 software package and doing some math yourself.

 

[MEby]

Well, after some internet reading I guess it's not a scam, but tracking the $ makes your head spin after a while. Basically the HELOC is a just a floater account. Looks to me like you could do this without purchasing their $3500 software package and doing some math yourself.

Sorry, I didnt mean illegitmate. Just that the point of doing it is... ... . ? I am on schedule to pay my house of in 10 years or less and I am not paying any one to figure it out for me in a complex way. keep it simple.

 

[rbattelle]

Not sure what the going rate for HELOCs are right now, haven't had one for a bit. I pay all my bills and throw the rest into the mortgage. All monthly expenses go on 2 credit cards that get paid in full every month so there's no finance charges. I guess I've been doing the same thing, but paying no interest.

Sorry, I didnt mean illegitmate. Just that the point of doing it is... ... . ? I am on schedule to pay my house of in 10 years or less and I am not paying any one to figure it out for me in a complex way. keep it simple.

I'm in the same boat. At my current rate, I'll pay off the house in October 2014. We'll have to pinch pennies here soon, but I just keep daydreaming about the day I pay it off. Oo.



The MMA idea is interesting, but I wouldn't do it. Something smells a little fishy about it.



Ryan

 

[daveshoe]

Look at the video carefully. You borrow from the line of credit to pay down the mortgage. You put ALL of your paycheck in the line of credit. Since the couple in the example have 1000 a month after the first mortgage and living expenses,where do you think it will go? To the 1st mortgage,of course. This guy is trying to make statements like''you only paid 50 bucks to cancel thousands in your 1st mortgage. what he should have said is that you only owe 50 bucks THIS MONTH. [you will still owe another 50 next month and each month thereafter untill the HELOC is paid!]

This is smoke and mirrors,period,IMHO. Said another way,why should you borrow from a HELOC at 8% to prepay a mortgage at 6% ?

I ran a payout for you using their numbers. Conventional 30 year mortgage at 6% is 1199. 10 . Total interest is 231677. 04. Using their method of paying an extra grand a month,the loan will be paid off in 10 years 2 months and will save 164000. 00 in interest. If you pay the 3500. 00 to the bank [1st mortgage] instead of to this service, [at the start of the mortgage],you will save an additional16656. 00 in interest and pay it off in about 9 years and four months. Now I guess you could say that the actual amortized cost of their fee is almost 17 thousand.

Another thing I noticed about this video,is the first thing you borrow from your line of credit is their 3500. 00 fee. I am sorry,but shoveling money from one account to another does not produce results. It just produces the illusion of results. The fact that the real savings is generated by paying an additional grand a month is deeply hidden in the details.

 

[george]

Interesting Daveshoe, so what you are saying is the program works as advertised but you could save a bit more by not paying the 3500 fee, is that it in a nutshell?

 

[kowaliga]

If a mortgagee made one extraordinary payment each year, toward the principle of a traditional fixed rate 30 yr. mortgage, he'd pay half as long. He would also 'save' the interest of the shortened amortization. If you have the cash, and can afford to use it this way ( cash-on-hand not as desirable as the interest you'll save eventually ) Its a good investment, all things being equal.

 

[BILLVO]

I too sat through one of these meetings for this same thing about a year ago. After telling them I wanted to pay off my original loan and be 100% debt free and do it by never having to rely on even more credit again by having to take out a second loan. That I wanted to be a cash man and be able to pay cash for thing in the future. After getting several calls from them to meet with them I met breifly with them but didn't get through it all They kept calling but after getting through the sales pitch and telling them my goals

"They never called me back again" Even after I called them and left messages a couple times after to ask questions. That told me what they were all about. It wasn't to help people but to make money off desperate people.

They also pushed real hard for people to put only the minimum amount that the company you work for will match into your 401K then take the money you would be putting in there and load up mutual funds and IRA's ect from them. There reason for this made sense though it was to equal out your taxed and nontaxed income from your retirement accounts. For an example the tax rate for taking out of 401k now is 25% and if taxes go up in the next 20 years you could lose what ever the tax rate for income is in the future "As taxes NEVER go down and ALWAYS go up" so essentially today to retire you lose 25% of your 401k to taxes potentially more in the future.



If you had funds in other nontaxable accounts where you have already paid the taxes on before it went into the account then you pay the taxes only on the interest made on a yearly basis so when you retire off these accounts the taxes are already paid for.

 

[scootergmc]

george, do you work for them? I only ask because you're in Vegas and so are they and it appears you're trying to convince the naysayers... ...

 

[scootergmc]

Sorry, I didnt mean illegitmate. Just that the point of doing it is... ... . ? I am on schedule to pay my house of in 10 years or less and I am not paying any one to figure it out for me in a complex way. keep it simple.

I agree...

 

[george]

george, do you work for them? I only ask because you're in Vegas and so are they and it appears you're trying to convince the naysayers... ...

No I don't, I just saw them on the local news with a thumbs up from the investigating team

and was curious if maybe anyone here had any first hand knowledge with them. BTW they aren't out of Vegas, they are based in Draper Utah

 

[MEby]

another thing... . you cant "borrow" your way out of debt, ever. In my book people are always looking to find the easy way out. I think if people worked a little harder, saved more, and did without some stuff they might get somewhere. Lots of people look at the rich and go waaah, everything is so easy for them, they buy whatever they want, when they want. The truth is that approx. 90 % of rich people are first generation rich, and they worked very hard to get there and did without a lot of things to get there. Like living well within their means. And to quote someone famous, "spend less than you make", "who do you think you are, the government?"



matt