Becoming Debt Free with the Money Merge Account – Part 4

Back in August 2008 it took about 10 days to complete the paperwork, mail it in, and get it approved by United First Financial before we could get the Money Merge Account up and running.

We were very excited to get started so this time delay was somewhat frustrating to us. Nowadays United First Financial has made it much easier and quicker for clients to activate their Money Merge Accounts online.

Because we needed to set up our bank accounts properly with the bank that we had the HELOC with we actually didn’t get started on our quest to become debt free until September 2008.

Just a note: The United First Financial product is a financial coaching software. They do not provide any banking services so the bank comments I make are based on our experiences with well known banking establishments.

I want to digress here for a moment and tell you about a gigantic snafu that had happened when we originally got our HELOC from the bank.  This bank shall remain nameless in this article, but I want to let it be known that from the beginning we were not too happy with it.

When we signed the notarized papers for the loan all of the paperwork was accurate with both my husband’s and my name on it.  After the HELOC loan was funded we received a copy of the loan docs and low and behold another woman’s name was on the loan!

This woman was unknown to us and when we complained to the bank they did not know how this woman’s name got on our account.  It took us several months and more phone calls than should have been necessary before we could get this woman’s name off of our account.

United First Financial’s Money Merge Account works with or without a HELOC.  If you don’t have one the Money Merge Account will utilize your savings account.  Whichever you have, the Money Merge Account keeps you out of harm’s way as far as getting yourself into financial hardship.  It will never have you go deep in debt unwisely.

What it does do is look at every penny of your finances and gives you advice of WHAT to do and WHEN to do it.  You have the final say.  You can follow the advice of the software or not and the really beneficial thing is that you can do “WHAT IF” scenarios to see what will happen when you choose to make other choices.

The second snafu with our HELOC surfaced almost a year after we got it and the loan officer that we worked with to get the HELOC caused it.  We were using one of our rental properties to fund the HELOC.

In 2007 when we got the HELOC approved that rental property’s value was about $450,000.  The first mortgage we had on the property was $149,000.  Because of the amount of equity in the property the loan officer suggested that we get a credit line of $195,000 even though we only planned to use about $80,000 at the most.  We followed his advice and got the higher credit limit approved.

What a difference a year makes.  All of a sudden because of the economy and all of the foreclosures everyone’s property values start to tank so when we started to use the HELOC this “un-named” bank lowered our credit limit to $112,000.  This still worked for us because we planned on keeping our HELOC balance below $50,000.

Let me explain how United First Financial’s Money Merge Account program is designed to work.  If you have a HELOC, you deposit your income into it.  You can’t do that if you haven’t borrowed from your HELOC loan account because any deposits of your income into that type of account are the same as making payments.

You allow your income to sit in the HELOC as long as possible, which reduces the amount of interest you pay.  Interest on an open-ended HELOC is based on the daily average amount.

Then when it is time to pay your bills, you withdraw that money from your line of credit and pay them.  Some banks allow you to pay bills right out of the HELOC, but the bank we were working with did not.

From time to time when your credit line balance is low or your savings account is at the optimal level, the Money Merge Account will prompt you to take some money, either from your HELOC or savings account, whichever you are using, and pay down the principal of one or more of your debts.  It will tell you the exact amount or amounts on multiple debts to pay off and will tell you the date to do that to get the most amount of interest cancellation.

So back to my story about getting started with United First Financial and the really amazing thing we experienced.  As soon as we actually got on the Money Merge Account our program “Dashboard” showed that by following the guidance of the software we would be debt free in a little over 12 years not the 16.3 years our analysis had projected.

We were happy with the original projection because our original payoff was 26.5 years, so you can imagine how ecstatic we were with having only 12 years before we became debt free.

In the next article I will go into the actual workings of the Money Merge Account and you will see that in the last year we have paid down our mortgage principals over $28,580 without any changes to our lifestyle.

The prior year before we choose to become a United First Financial client we paid only $6,428 down in our principals. As you can see we were  not doing well on our road to becoming debt free prior to using the Money Merge Account.

You might want to ask yourself how much have you paid down in your principal in the last year.

Tagged with: Debt Free • HELOC • Money Merge Account • United First Financial

Filed under: Debt • Finances

Like this post? Subscribe to my RSS feed and get loads more!