Borrowing from Peter to Pay Paul with a Money Merge Account

Reduce mortgage repayment time by half or more! That’s an attention-getting message, isn’t it? Money Merge Accounts advertise that you can eliminate monthly mortgage payments sooner, saving thousands of dollars in interest. But these ventures do not provide their services for nothing. In the end, you’re probably better off just passing that offer by.

Money merge accounts or accelerated mortgage repayment systems originated in Australia and recently infiltrated the US. Despite rapidly growing in acceptance and admiration, many financial experts caution customers to tread slowly. Though the program effectively reduces mortgage repayment time, the concept is not without flaws or hazards. In effect, these accounts get you to borrow from Peter to pay Paul.

How Money Merge Accounts Work

Customers must first buy the accelerator software program. Expect to pay anywhere from $695 to well over $4,000 for the use of the technology. The tool regulates the cash flow between a high equity line of credit (HELOC), monthly wages, monthly living expenses and a regular fixed rate mortgage. Clients must monitor transactions closely to detect possible errors.

Then you must obtain an HELOC through the company or an affiliate. This is essentially a second loan based on a home’s equity value. The interest rates vary and more times than not, exceed the amount of the first mortgage. Consumers must then agree to deposit all wages into the account, which relinquishes control over spending. After the determination of monthly expenses, the client receives a credit card. The card is the only resource for paying bills. A dashboard allows clients to adjust the number of years until pay-off, the pay-off date and to visualize the amount of interest paid.

The software deposits the paychecks into the account in order to begin paying back the HELOC. The HELOC pays the mortgage payment, allows withdrawals from the credit card for living expenses and adds the excess to the mortgage loan principle. The more frequently money is applied to the principle, the faster the amount decreases. Money continuously flows from one area to another.

Fees and Pitfalls

Pitfalls with the system include the initial cost of the software, the accuracy and effectiveness to circulate funds without error and interest rates of the HELOC. In order to prevent negative balance occurrences, consumers must diligently track finances. The software’s first priority is to pay down the mortgage. Monies moving out of the account may or may not coincide with paycheck deposits or bill deductions.

Insufficient fund or late fees are the sole responsibility of the client. Subsequently, credit history becomes affected. In order for the program to operate properly, individuals must have substantial excess income after paying the mortgage and other monthly bills. In addition, customers may incur penalties after using the card for unnecessary expenses.

The software programs are available through financial and insurance advisors, mortgage brokers and realtors. Clients gain information from one on one meetings, networking systems or seminars. Experts suggest conferring with legal consultants prior to signing any documents. Examine the fine print for refund policies and warranties and receive thorough answers to all questions.