Old Wikipedia for Money Merge Account

The number of sites on Money Merge Account is sick. I wanted to read more, but wading through all the promotion crap just pissed me off.

I went to google and used "Money Merge Account Articles" and finally got a bit more info. Yeah, it's more promotional crap too---but you can find some great views if you're willing to wade through the other stuff.

What i found which was interesting, was this Wikipedia entry on the MMA. However, when I actually went to Wikipedia, it doesn't exist. I'd like to know why...

I captured the old page:

Money merge account

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This article has been tagged since May 2007.

A Money Merge Account is a program which uses a specific type of home equity line of credit (HELOC) in conjunction with proprietary software for the purpose of paying down a home mortgage (and other debt) faster. This program is actively managed by the homeowner, used not unlike a persons (or family's) checking account, which ties a conventional 1st position Mortgage (of any type) to a specific HELOC.

Comparing a Money Merge Account to a Conventional home loan

Conventionally, a person's paycheck will be deposited in a checking and/or savings account, earning some amount of interest income. The checking account is slowly drawn down to pay bills over the period of a month, including a payment once per month on their home mortgage.

With a Money Merge Account, a specific type of HELOC is set up, tied to the home. Payments are made as usual, but now they are borrowed from the HELOC and applied to the first mortgage. At specific intervals, the Money Merge Account software will 'prompt' the homeowner to take an additional amount (to the penny), and apply it to the primary (1st position) mortgage. The paycheck is then used to re-pay the HELOC balance, as the 'discretionary income' (the amount normally sent to a savings account each month) is used instead to pay the HELOC back to zero. This program allows the homeowner to understand and actually see the financial decisions they make, affect their mortgage. Some of that pre-payment interest savings is counteracted by the increased interest due on the HELOC, and the interest income that would otherwise have been earned in a savings or checking account is forfeit. As bills arrive over the rest of the month, they are paid with a withdrawal (borrowing) from the HELOC.

For the Money Merge Account program to function, the HELOC utilized must:

• Must be an "open ended" Home Equity Line of Credit.
• Must have an interest only payment option.
• Must be variable rate.

Advantages of a Money Merge Account:

• There is no need to refinance the existing primary mortgage, regardless of its type.
• Potentially bigger savings and accelerated payoffs are possible if the homeowner spends less on discretionary expenses, because the discretionary income is instead used to pay down mortgage debts.
• Less cash is left sitting in lower yield checking accounts.
• By placing paychecks into the HELOC, the 'average daily balance' is lower, thus the finance charge can be lower.
• Any bank can be used, which offers a HELOC which meets the specific requirements.
• Mortgagees can start to think of every purchase and weigh it against their mortgage loan balance.
• Proprietary software tracks financial variables which homeowner might miss, utilizing money more efficiently.^[1]

Disadvantages of a Money Merge Account:

• Interest rates on 2nd lien HELOC mortgages are higher than comparable first lien mortgages.
• At least 15 days or more of additional interest are paid on the HELOC, at the higher interest rate.
• Online FDIC insured Savings Accounts from Large National Banks currently pay interest income ~=5.05% APY, which is almost equal to current 30 year fixed mortgage rates of 5.875% APR. It may therefore be advantageous in some circumstances for the homeowner to save money in a savings account and use that to pay down the first mortgage rather than using a HELOC.
• Many HELOCs will not work for this due to yearly fees and/or account limitations.
• Set up fees for MMA companies can vary, but generally might be around $3500.^{[2] [3]}
• The set up fees ($3,500) could instead be applied directly as a one time mortgage pre-payment.
• Mismanagement can cause a rapid run up on the balance of the HELOC, and increased total mortgage indebtedness.

See also

• Mortgage, HELOC
• Finance, Personal finance
• Debt, Debt consolidation
• Loan, Interest-only loan

References

1. ^ The Money Merge Account Software. The Jubilee Project. Retrieved on 2007-05-22.
2. ^ Money Merge Accounts: Are They A Good Deal For Home Borrowers?. The Simple Dollar. Retrieved on 2007-04-26.
3. ^ Guttentag, Jack. The UFF Plan: Another Good Fairy of Rapid Payoff. The Mortgage Professor.

External links

• Government site offering information on HELOC loans
• Active Rain Discussion on "Money Merge Accounts: Are They Really the Best Thing for You?"
• Taylor, Don. "'Mortgage accelerator' loans come to U.S.". Site: Bankrate.com
• United First Financial, LLC. Creators of the actual "Money Merge Account

Note: I couldn't get the Jubilee link to work---then noticed it's actually .com (I guess they changed it), not .org as it is in this entry.

If anyone knows why this was deleted, could you let me know?