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Posted by Jeff Strickland on April 23, 2007, 7:58 pm
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>>
>>
>> > Since this is a mortgage newsgroup, I felt that a post offering a way
>> > to
>> > pay off notes
>> > using current income, without refinancing, or making additional out of
>> > pocket payments
>> > to principal or forcing the borrower to change his lifestyle would be
>> > on
>> > topic. Have you
>> > noticed that most of the posts on this group are about everything but
>> > mortgages.
>>
>> Your post is on topic, although it is a commercial post that seeks to
>> drum
>> up business. Since I am asking questions about your product, yoiu should
>> answer them here so that others might benefit from the answers you give
>> me.
>>
>> I am a former mortgage lender, which explains why I know the HELOC 1st
>> product. I know lots of stuff about mortgage lending, and the first rule
>> of
>> mortgage lending is that the bank wants themoneynot the property. The
>> second rule of lending is the only way to pay a note off is to reduce the
>> principle, pay more principle than is required and the note can be paid
>> off
>> early.
>>
>> > TheMoneyMergeAccountenables the homeowner to use the bank'smoneyfrom
>> > an
>> > open ended 2nd position HELOC to cancel future closed end interest in
>> > the
>> > 1st mortgage.
>>
>> > Our system's algorithms enable the homeowner to pay off both the 1st
>> > and
>> > HELOC 2nd
>> > in as little as 1/3 the time. That's why we have some customers on
>> > schedule to be FREE
>> > and CLEAR on a 30 year note in 8 years. It takes some people longer and
>> > some people
>> > can do it in less time.
>>
>> The ONLY way to do that is to takemoneyfrom your pocket and throw it at
>> the mortgage.
>>
>> You said there was no refi involved in your plan, but then you went on to
>> say that the borrower uses the banks'moneyfrom a HELOC to make payments
>> on
>> the 1st. If the borrower hasn't already got a HELOC, then he must
>> refinance
>> in order to get one. The bank is not going to let anybody use itsmoneyfor
>> free. Period.
>>
>> To the extent that one can divert savings dollars from the savingsaccount
>> and use them to pay down the mortgageaccount, then one can repay the
>> mortgage in short order and not change their standard of living. That
>> much
>> is accurate.
>>
>> My question to you is, since mortgage interest is tax deductable, then
>> wouldn't a person that has the ability to repay a 30 year mortgage in 8
>> years be better off to get rid of his other debt and keep his mortgage?
>> Indeed, if equity appreciation is climbing, then wouldn't a high dollar
>> wage
>> earner actually be better off with an Interest Only note for 5 or 10
>> years
>> where he could take the tax advantage of the interest he pays? I'm not a
>> tax
>> guy, but it occurs to me that in a world of limited deductions, there are
>> people that actually benefit from paying mortgage interest. They have to
>> live somewhere, they might as well take a deduction on their residence.
>>
>> > Our customers don't have to know anything about financial mathematics.
>> > They just have to
>> > follow the system's suggestions and tell it the truth about what they
>> > do
>> > in the real world.
>>
>> > We believe that it is better to help people get out of debt than to
>> > keep
>> > them there forever.
>>
>> > The math works and so does the MMA. If you would like to see some truth
>> > about mortgages,
>> > please visitwww.be-mortgage-free.infowhere you may learn more.
>>
>> > 1st position HELOCS are ok but dangerous for many people. Why do you
>> > think
>> > one needs
>> > very good credit to get one? The MMA works on any mortgage and most
>> > people
>> > can qualify.
>>
>>
>> >>> First of all, I am not lying and we are notmoneylenders.
>> >>> Your discussion about HELOCs is getting at the idea our system
>> >>> employs.
>> >>> It works with any kind of mortgage and the homeowner does not
>> >>> refinance
>> >>> his existing note. We show the homeowner how to force changes to the
>> >>> amortization schedule by making precise equity transfers from HELOC
>> >>> to
>> >>> 1st mortgage. But he does not usemoneyout of pocket.
>>
>> >>> I respect your opinion, but you're simply not sufficiently informed
>> >>> on
>> >>> what's available.
>>
>> >>> If you would like to learn more, then contact me directly.
>>
>> >> The point of a news group is to discuss topics in an open forum where
>> >> participants and observers can gleem information they otherwise might
>> >> not
>> >> have or know. Technically, it is very poor form to sell products
>> >> through
>> >> a newsgroup, indeed many groups forbid commercial postings -- your
>> >> post
>> >> is a commercial post, by the way, because you are soliciting business.
>>
>> >> It is not mathematically possible to pay off a mortgage without making
>> >> larger payments than the amortization schedule calls for. Period. If
>> >> one
>> >> is not takingmoneyout of his pocket, then the outstanding balance is
>> >> not going down.
>>
>> >> You can sell a product that pays the mortgage faster but does not
>> >> change
>> >> the buyer's standard of living IF the product captures all of the
>> >> income
>> >> dollars and reduces the principle amount immediately and vastly. The
>> >> buyer/borrower still has bills to pay, and he pays them with HELOC
>> >> dollars (checks issued at the onset of the mortgage), but the
>> >> difference
>> >> in total income and total outflow remains in the mortgageaccountand
>> >> reduces the principle very quickly.
>>
>> >> Alternatively, the buyer/borrower can change his standard of living by
>> >> throwing extra cash at the principle every month and reduce the
>> >> outstanding balance that way.
>>
>> >> The difference in the two methods is that the first is a true Home
>> >> Equity
>> >> Line of Credit in a 1st Trust Deed position that gives the borrower
>> >> access to as much as 90% of the equity value of the home without
>> >> having
>> >> to refinance, the latter method locks up the equity into the mortgage
>> >> and
>> >> requires a refi in order to gain access to any equity acquired. The
>> >> first
>> >> method, the HELOC 1st, effectively takesmoneyfrom another savings
>> >> vehicle and moves it to the mortgage. The effective APY of the savings
>> >> dollars becomes the interest rate of the mortgage. Additionally, daily
>> >> living expenses and regular bills that are paid through the HELOC
>> >> checks
>> >> will transfer those bills to mortgage interest, which then become a
>> >> tax
>> >> deduction.
>>
>> >> Let's say you make $7000 per month. Your mortgage is $3000, and the
>> >> rest
>> >> of your bills -- utilities, credit cards, groceries, car payments,
>> >> etc. -- add up to $2000. Your mortgage and bills are $5000, your
>> >> income
>> >> is $7000. These numbers would put $2000 into savings each month. If
>> >> you
>> >> had a HELOC 1st, then you would reduce your principle by that $2000
>> >> instead of collect interest on a passbookaccount. Another thing is
>> >> that
>> >> you get paid on the 1st and the 15th, but don't make the house payment
>> >> until the 25th. This parks yoru house payment for a minimum of 10 days
>> >> not making anymoneyat all. If your pay check was deposited directly to
>> >> the HELOCaccount(a requirement of the program, by the way), then your
>> >> principle is reduced from the day you get paid, not from several days
>> >> after you write the check. You have a lower Average Daily Balance from
>> >> which to calculate interest due, and you lower the balance more, and
>> >> you
>> >> pay for stuff with HELOC dollars that become mortgage interest that is
>> >> deductable from income taxes.
>>
>> >> It is a good program for the right kind of borrower.
>
>
> Jeff,
>
> The Program Ashley is talking about is a refi of sorts. It takes the
> second position,
> and by doing so, on a smaller sum of money, takes a great deal from
> the risk of
> using a 1st position variable rate mortgage, such as the ones used in
> Australia.
>
> The greatest online source of infomration on the Money Merge Account
> Program
> is www.thejubileeproject.org, though I would be happy to address your
> comments here
> so all readers can gleen what they need to. Thi sprogram does not work
> for all Homeowners,
> as nothing does for everyone, but I assist people with credit scores
> as low as 600-620,
> not the 700+ as you remarked concerning the 1st position HELOCs.
>
> The key to this program is the "discretionary income". You are correct
> that you
> have to apply more to the principle to pay down the balance. However,
> the danger with 1st position
> situations comes when the interest rates rise, even minimally. A
> single point increase can
> suck away a persons discretionary income and open the possibility of
> losing your home.
> The second position HEloc, however, used in connection with our
> proprietary software and
> ongoing personal support, allows the homeowner to shield themselves
> from that risk.
>
> We are able to use smaller amounts of money, use the HELOC as a
> primary checking account,
> where we make payments to the line of credit and pay our bills from
> the line of credit. This
> then uses the paychecks to hold down the balance so the monthly
> finance charge is a minimum,
> which the discretionary income eats away at the actual balance. Of
> course you still have to pay
> the money back, and of course it's going to come out of your pocket.
> However, it is controlled
> and manageable with the software.
>
> This process allows you to use the Banks money at a reduced interest
> charge (because we are
> using a HELOC with an interest only payment option, open ended
> interest and a variable rate, so
> we can make multiple payments per month), and the Bank is only looking
> for a finance charge. Our
> paycheck becomes that finance charge, as the discretionary income eats
> away at the actual balance.
>
> Now, the main question poeple ask is: "What is 'discretionary
> income'?" It's what you have at the
> end of the month which you would normally put in savings. You say you
> don't have any? Most people do.
> Do you have credit cards? Car loans? Student loans? Medical bill
> payments? Thats discretionary
> income, IF you have enough equity in your home to swallow up that debt
> in the 2nd position HELOC.
> Then the freed up monthly payments become the discretionary income,
> which feeds the program.
>
> I think what Ashley meant was you don't have any out of pocket expense
> to START the MMA Program
> (we take it out of the HELOC), you don't have to finance your PRIMARY
> mortgage, but he was incorrect
> about using the Banks money and NOT our own. We use the Banks money at
> a reduced interest rate,
> or interest free, then have to pay it back...but we can do it over
> time, using this phenominal program.
>
> Hope that helps you and the readers of this post.
>
That all makes perfect sense, but I did not gleem that from Ashley's posts.
I've done precisely the same thing, add up debt payments and show borrowers
how they can get rid of the debt through equity, then make the debt payment
to the equity account. There is nothing new here, we call it a cash out
refinance, or a Second Trust Deed (depending on how it is done).
Ashley specifically stated that there was no refinance, and technically I
suppose that could be true. If she writes a new 2nd TD, there is no "refi"
per se. And, there are loads of HELOC 2nds that have no front end load, and
many that are done at prime, or prime + .25, for life. If I paid off the
credit cards, then cut them up, then made the same payment (total of the old
payments) to the HELOC and periodically made large payments tothe 1st using
available funds from the 2nd, then I could do what she is suggesting.
Maybe.
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