This new program says that you can pay your house in 1/3 of the time.

**safari** · 08-22-2007, 03:02 AM

I didn't really understand how that system works. He said he is putting his paycheck toward his balance on the home equity line of credit and using it as his checking account. But what about his first mortgage? Also, HELOC has a much higher interest rate compared to the first mortgage, so why have HELOC at all? That sounded like an advertisement for software. $3,500 for a program that tracks your balance??? Wow.

**Tree0164** · 08-22-2007, 03:54 AM

I didn't watch the video but Dave Ramsey had a caller on his radio show asking about this Money Merge account. You buy some fancy calculator for $2500 or $3500 that sounds you how to pay off your mortgage.

It sounds like one of the good to be true things. You can use alot of those mortgage calculator online to see how you can cut down your mortgage.

**FrugalFish** · 08-22-2007, 06:06 AM

I'm a little confused about "the system", but think I've seen information like this a few years ago. As I recall, your entire paycheck is somehow applied against your mortgage and then as you write checks to pay your expenses, that amount goes back onto the mortgage. The idea being that you must spend well less than you make, and allow that extra deposited money to prepay the principal. In the one I was reading about a few years back, you could overwrite checks and end up owing more on your mortgage than you did at the beginning of the month. Yes, there are still extra payments being made, it isn't as simple as using a system and still making your minimum monthly payments.

As someone who's on a 10 year mortgage prepayment schedule, it takes a lot of extra dough to get it done. There's no easy way to finish it off except extra money and self discipline.

They said the system is from Australia, and it's my understanding that they don't have any sort of tax break for their mortgage interest. Australians are much more motivated to pay down their mortgages than the mortgage loving American.

**boefixepa** · 08-22-2007, 06:19 AM

I too have heard of something like this. The idea I saw was to use the second to pay it off the first in bigger chuncks. Because first morgages you pay the interest first, then the principle, so if you pay big chunck extra it goes to your principle and the overall interest you pay is greatly reduced. The second is figured like a car payment, without the front load of interest so you use your payment to pay that down, when it gets paid down, you pay another chuck to the first. The math makes sense, but I'm sure there is a risk to it too.

Always risk vs. reward...always

**dreamweaver** · 08-23-2007, 04:42 AM

There is a calculation (which I don't know) that tells you just what you will cut off the life of your loan if you pre-pay principal. It depends upon the life of your original loan, and how and when you pay extra principal. Your own lender can tell you this.... I just read something about this a couple of days ago. If you start on year one of a thirty year note and pay your mortgage bi-weekly you will pay off your loan something like seven years early. It gives you an extra payment or two per year. The savings, of course, is in the interest. I am not so particular in the math....so I just double my principal whenever I can. Figure I have saved several years off a 15 year note. Make sure you have no pre-pay penaltys...and make sure you are paying principal only with the extra monies.

**DebbieL** · 08-23-2007, 08:03 AM

Canadians don't get a tax break on mortgages either. Maybe it's just Americans? (I'm in Canada)

**Ima saver** · 08-25-2007, 12:14 PM

Buy the book, the Banker's Secret by marc Eisenson. It will tell you how to pay off your mortgage early.

**Exile** · 08-26-2007, 06:51 PM

I'm inclined to go with dreamweaver. I really don't see the need to shell out thousands of dollars for a computer program. If you have a 30 year mortgage, see if you can handle the monthly payments of a 10 or 15 year mortgage instead and if so, get your home loan refinanced accordingly. I think the points and / or some of the fees to refinance are tax deductible (???) whereas the cost of that special program may not be.

If you can tack on additional money towards your mortgage, send it under separate cover with instructions to the lender to apply the amount to the loan principal. Alternately or in addition, pay at least 13 installments instead of 12 each year.

There are many creative ways to accelerate paying off your mortgage. But as dreamweaver mentioned, look out for prepayment penalties. If your loan has such a clause, refinance into one that doesn't.

**loanstar** · 09-08-2007, 01:51 PM

the only way to pay off your mortgage loan in 1/3 of the time is to significantly increase your repayments.. there's nothing a system can do to lessen what you owe the bank..

**willowstudios** · 09-08-2007, 02:04 PM

There's another thread all about this topic on here - look under my name..

**davlat** · 09-10-2007, 06:23 PM

It is not for people who care their $$ wisely. It is for people who need nanny to control their financial chaos. Read here.The Simple Dollar � Money Merge Accounts: Are They A Good Deal For Home Borrowers?
....
There are also untold risk... 1 biggest risk is "THEY CONTROL YOUR MONEY"... They may say you control your account but remember that you actually do not have "your real money". The process goes ONLY IF THERE IS NOTHING HAPPEN BETWEEN YOU AND THEM. Do you know all the fine print of their account and all legal term. It is like hiring someone to push you up to sweat + extra sweat for that "someone" too.

**zoe** · 09-17-2007, 03:56 AM

These were big here in Australia a few years ago, but people couldn't be bothered now, cos eventually you get caught in the credit card problem where you spend a bit too much one month and pay interest.

I thought this method would save us years, but all it did was cause us to overload the cc. I'm now just paying $600 extra a month to take time off the mortgage. We don't have tax deductions for our mortgages, only if it's an investment property.

**MonkeyMama** · 09-17-2007, 05:53 AM

So basically anyone who is great with their money/disciplined can pay off their mortgage fast anyway (wouldn't pay the large fees and utilize a HELOC to do this). & the people who aren't disciplined will get in more trouble.

Just doesn't make any sense from what I have seen.

(& yeah it really struck me that a HELOC would almost double my own mortgage rate).

dreamweaver has it - I think if you add (an additional) 11% of your mortgage payment to principal every month your mortgage will be paid off 7 years early (from 30-year loan). It is not a huge amount. But yes there are a lot of free online calculators in that regard. You can figure that out rather easily with an excel spreadsheet even.

This new program says that you can pay your house in 1/3 of the time.