Money Merge Accounts: A Good Idea?
A money merge account is a special type of home equity credit line for your home. Your paycheck is directly deposited into the account at the end of each pay period and the account determines the distribution of the money from your account. The balance of the home equity account is paid first, with the remainder of the money deposited going towards the interest and principal of the person’s home mortgage.
The person holding the money merge account uses the home equity line to pay all of their bills and incidental purchases to ensure that they will be paid for once the paycheck is deposited into the account, but any extra money in the account is immediately applied to paying down the person’s mortgage as quickly as possible. There are pros and cons to using a money merge account and people should understand what they are before making a decision on whether or not to open a money merge account.
The Pros
A money merge account is one of the fastest ways to pay down your mortgage and build equity in your home. Any extra money from your paycheck is applied directly to your mortgage, effectively preventing you from spending the money on frivolous items that you probably do not need. Because every purchase is going onto the home equity account, it encourages people to be frugal with their money and only spend on items that are really necessary to maintain their regular lifestyle.
The Cons
Money merge accounts do not do anything for a person that they could not do for themselves with some basic discipline. If a person really wants to apply more of their money towards the interest and the principal on their home mortgage, all they have to do is write the check for their mortgage payment for the higher amount. Money market accounts also add fees to the account for the privilege of using the account, routinely adding about $20 per payment depending on the balance of the loan.
Having the money from your paycheck automatically distributed by the money merge account can also cause problems in the event of an emergency. If you need to send money to your parents or your children quickly to help them handle a financial emergency, it is a much greater hassle to try and obtain money from your money merge account than it is to go to a typical checking account and extract the money to send to your loved ones. Whether or not to choose a money merge account depends on the situation of the mortgage holder, but in many cases, a money merge account is unnecessary if the person has financial discipline.
- Why is being debt-free so unpopular? The most visited posts on this blog are the ones about Douglas Andrew's Missed Fortune 101. The main one is here. I still get comments every once in a while on this post. In case you haven't read the book, the crux of Mr. Andrew's way to riches (very boiled......
- Private Mortgage Insurance Explained When it comes to making real estate purchases, often time's people really want to buy a home without having a decent down payment. People are starting families and need a place or live, or just cannot wait until they can save up a decent amount of money for a down......
- 5 Ways to Save Cash for a Down Payment Buying a home is one of the biggest financial decisions a consumer can make. With the increasing difficulties the home sales industry is now facing, most lenders will require a down payment of some kind, in order to qualify for a home loan. It wasn't that long ago when lenders......
- US property sees highest levels ever of negative equity More than 8.3 million US mortgages, or 20% of all mortgaged properties, had negative equity at the end of 2008, according to a new report. ......
- What Is An FHA Home Loan? An FHA home loan is a mortgage loan fully insured through the Federal Housing Administration (FHA) and issued by FHA-approved lenders, such as a mortgage company, bank, savings and loan association, etc. Photo by Jamoker via Flickr An FHA loan has several key advantages over a traditional loan: Lower down......
I have the Money Merge Account and it is not hard at all to obtain money from it in an emergency. I had an emergency and it was easy to get my money. So I’m not sure what you mean about saying that it is a much greater hassle.
I love the way the Money Merge Account keeps me frugal and the way I can see how my spending affects my life and future. At least I can see it all now and make my decision of what I want to do — instead of living with blinders on.
Sure people can do it on their own, but why would you when you can have a GPS system in your face helping you. Oh that’s what a Financial Planner is supposed to do. I thought a Financial Planner is supposed to send birthday cards.
Besides, the country wouldn’t be in this mess today if most people had discipline.
I’m not a huge spender, but I was never a big saver. When I had extra money I spent it –which is bad too as spending tons of money in my opinion. Now, I know where I’m going and what I am doing thanks to the MMA.
THE FUNNIEST THING OF ALL IS I DON’T REMEMBER SEEING ANY NEGATIVITY ONLINE about a person who actually has the Money Merge Account!
BEFORE YOU TALK DOWN ABOUT THE MMA — YOU SHOULD HAVE IT FIRST YOURSELF — OR AT LEAST LOOK AT THE ACTUAL SOFTWARE THAT BELONGS TO SOMEONE SO YOU CAN SEE IT IN ACTION.
Months ago I heard that over 33,000 were sold, so now it may be over 50,000. Have you ever heard of a company with that many sales that didn’t have some negativity from their clients? So maybe I will wait, may be a long one. Even great companies have negativity though…maybe it will happen eventually.
I understand United First Financial won the Entrepreneur of the Year Award this year by Ernst & Young, not an easy feat. That alone says how reputable they are. Not just anyone gets that award.
For those of you who may not know, Ernst & Young is one of the world’s leading professional services organizations.
Jenn
I don’t beleive they talked the idea down, they just explained it and listed the PROS and CONS of it to inform interested people that would like a better idea of what it is. Personally on the surface it sounded to good to be true or a scam, but now that I understand it, I can make an informed decesion, know it is not a scam. Thanks for the information.
The downside of the MMA is the price. Paying $3500 for the product can be a huge waste of money if you can figure out how to do it yourself (and it isn’t too hard to do it yourself or just pay extra principal on your debt.)
If you are really interested in the MMA, take a look at my site. I can possibly save you a large amount of money.