Here you go. And I can present you this with a 100% guarantee. By the way, I jacked up the interest rate on the HELOC to 15% just to show you how little of an impact that the Interest rate makes when you use your income to offset the amount. You don’t seem to be arguing that point any more. Also this includes the $3500 fee. The same money all the way around. This means that everything will be paid off in the final month. Including the MMA fee and HELOC.
By the way, I was just wondering. We both agree that the avg. guy might have unexpected expenses at some time but man, if you had to pull out even a few thousand dollars here and there out of your savings. It would have a dramatic effect on the long term investment wouldn’t it. No more compounding interest on the money that’s not there.
This report illustrates the results that can be achieved by establishing a Money Merge Account. The accuracy of this report is consistent with the information supplied by you.
You have been pre-qualified for the MMA to decrease your scheduled interest by $157,740.74. By following the MMA program you are eligible to pay less interest than compared to a standard 30-year mortgage at 2.541% fixed.
Current Liabilities
Existing Debt (to be paid off) Balance Payments
Some Bank (1st Position) $200,000.00 $1,199.10
Money Merge Account $3,500.00 $0.00
Total Monthly Fixed Expenses $203,500.00 $1,199.10
Net Income
Employer Interval Amount
Monthly $25.00 – Here is your savings amount that I won’t even use.
ABC Corp Bi-Weekly $2,500.00
Total Monthly Net Income $5,025.00
Income Analysis
Total Monthly Net Income $5,025.00
Total Monthly Fixed Expenses -$1,199.10
Current Monthly Discretionary Income -$300.90 – again no extra $25 that you are using
Monthly Living Expenses
(bills, entertainment, spending money) $3,525.00
With the MMA your 1st mortgage and the above listed debts will be paid off without adjusting your living expenses in 12.7 years. (NOT 19.5)
Proposed Liability Structure
Balance Escrows Payment
Some Bank $200,000.00 $0.00 $1,199.10
Money Merge Account $3,500.00 $43.75
Total $203,500.00 $1,242.85
Monthly Payment Savings ($43.75) – Here he is loosing money (The reality is that he would offset the interest with his income and would probably pay less than $25 – the same amount you are putting in your savings. Lets just apply your $25 in savings to this HELOC interest. This sounds like we are on the same page to me.
Some Bank Money Merge Account
Current Balance $200,000.00
Note Rate 6
Remaining Term 360
Payment Amount (P+I) $1,199.10
Total Payment $1,199.10
Current Balance $3,500.00
Note Rate 15 – Wow, I’m not even playing fair with such a high interest amount am I?
Line Amount $12,000.00
Program Start Date 8/1/2007
Living Expenses $3,525.00
Money Merge Account Comparison
Final Payment Mos Paid Mos Saved Yrs Paid Yrs Saved Interest Paid Interest Saved
4/2020 152 208 12.7 17.3 $87,537.09 $157,740.74
Now lets see what we will have in our savings when we put our house payment and extra money we now have into a savings for the remaining term.
Starting Principal $0.00
Rate of Return 10
Num of Months 208
Mon Investment $1,500.00
Scenario 1
$831,417.24.
This is the potential cash accumulation you could have in the months saved on your mortgage with the MMA.
If the interest rate on the HELOC were closer to 9% it would have saved him another 3 months. Even with the HELOC interest being so high, 3 months isn’t such a big deal. That’s less than $3600 over the entire term.
It is the cancellation of compound interest that makes this work. Plain and simple. Just like you are such a proponent of earning compound interest on the long term, we show how to cancel the same interest effect off the mortgage.
I’m sure that I will be getting some flack for displaying an analysis on a forum but then again, if there is a 100% guarantee on this than I can feel confident that I haven’t misrepresented these numbers.
Oh, if you were to take your $325.10 a month and put it in your investment account for 30 years at 10% including your initial $3500, you would have $768,923.59. That is a difference of $62493.65 in my favor. If you had an emergency and heaven forbid had to pull out your $3500, you would only have 707,850.68. Wow, your $3500 cost you a lot in interest in the long term didn’t it. This is why people rarely see their investments grow like that (the ones that you like so much). However the MMA guy would have only had to take 3 additional months to pay off his house and HELOC. If I could put the difference of $59,000 or more in my pocket and be out of debt almost 7 years earlier than your free system, makes the $3500 fee a lot better sounding to me. That is a ROI of almost 1700%