Is a money merge account a good idea?

Question

While looking into refinancing my mortage the broker told me about a money merge account and said it would be a great way for me to "build equity and get out of debt fast". We live paycheck to paycheck as it is. Would this really be a good idea for me or it is a gimmick?

Answer 1

Not a very good explanation by the broker. You should have asked him to explain further.

This is only MY own thinking.

There are morgtage holders, all brand new in US, who carry the morgtage.
1. A person has his/her entire paycheck, every payday, deposited into an account with the morgtage holder.
2. I understand that other debts can be held also, car, credit cards, etc.

Then, actually, "A line of credit" is available to the client.
To explain:
From the deposits, the normal monthly morgtage payment is paid, either by your check or as a draft.
When the payroll check is deposited, on that day, all the money is applied to the "Morgtage Principle". This reduces the principle for that day and any subsequent days that the money remains in the account.

Now: As above, the "Credit Line".
You are able to write checks from the account for any and all the bills that you normally pay every month, car payment (to the same company or other; credit car payment to the same co., or other, etc.). Groceries, clothing, utilities, etc.
It's just as critical here as anytime not to overdraw your income from that account.

Here's the kicker.
Every day that you have a balance in the account, which is reducing the principle on the morgtage on a daily basis, you have saved interest on the morgtage which is equivilent to earning the same interest as the morgtage interest rate.
At the end of the month, any balance is still applied to the morgtage principle, thereby reducing the daily interest until the next payday or later. If there is no balance, and you have not overdrawn the amount of original deposit, you have saved interest for that month, even though you may not have paid down the principle, since you left no balance.
You should be aware that saving interest every month/year, eventually pays off the morgtage sooner. Interest is calculated by the day, same as credit cards.

In some cases, a 30 year morgtage may be paid off in 15 years. All this would have to be calculated to fully understand the savings. It is sometimes stated that you earn the same interest as the morgtage rate. A little confusing. One is not paid that interest, it's interest saved.
A penny saved, is a penny earned. Right?

Bear in mind that the morgtage holder can earn money by using your cash in the account, on a daily basis, in several ways. Money Market. loans, etc. For instance. If you have a low interest loan they may be able to loan your money at a new, higher interest rate.

This is only my understanding, not carved in stone.

I understand this came from Australia to the US.

You will have research to verify.

Answer 2

Great idea........i had an analysis done and found out i can save 7 years on my mortgage and 106,000.00 in interest.....also, if i continue to make the regular mortgage payments for the remainder of the 30 year loan, and i put it in an account with a 6 % rate of return, i will have almost 700,000.00 for retirement......you said you live paycheck to paycheck.......i know how you feel, i felt the same way........the program will help you pay off your debt with LITTLE TO NO CHANGE in lifestyle.........united 1st financial has no access to your money.....they dont pay your bills for you........since starting the program, i have had such great success with the software, i have now become an agent for u1st.......if you have any other questions, please check out my website at www.mymortgagepaid4.com.......i'll be happy to answer any other questions you might have.

Answer 3

I have never heard of this. If I were you, I'd go to the bank you use and talk to a bank officer about it. They will be glad to help you and explain things to you better.