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Jeff, my statement about 'no refinance' intended to mean that the first
mortgage isn't touched. Sorry for the confusion. Since the HELOC is an open
ended instrument, the month end interest is charged on the average daily
balance which will fluctuate due to deposits in and expenditures out. Since
we are floating some of the money borrowed, I think it can be said that
interest will not be paid on all of it.
All our software does is determine the optimum time and amount of the equity
transfer from the HELOC to the 1st mortgage to pay off at the earliest time
possible. Without the MMA system, almost no one would be able to make those
calculations. Oh, and after each transaction, the years and months to pay
off are adjusted accordingly.
You ended your last post with the word 'maybe'. If a person tries to use the
HELOC on his own without the MMA to guide him, the word 'maybe' is
definitely appropriate. Maybe he can do it, maybe he cannot. Using the
algorithms in our system, there is no 'maybe'. Mathematics is an exact
science. And people using MMA do not have to know any math.
>> Jeff,
>>
>> The Program Ashley is talking about is a refi of sorts. It takes the
>> second position,
>> and by doing so, on a smaller sum of money, takes a great deal from
>> the risk of
>> using a 1st position variable rate mortgage, such as the ones used in
>> Australia.
>>
>> The greatest online source of infomration on the Money Merge Account
>> Program
>> is www.thejubileeproject.org, though I'd be happy to address your
>> comments here
>> so all readers can gleen what they need to. Thi sprogram does not work
>> for all Homeowners,
>> as nothing does for everyone, but I assist people with credit scores
>> as low as 600-620,
>> not the 700+ as you remarked concerning the 1st position HELOCs.
>>
>> The key to this program is the "discretionary income". You are correct
>> that you
>> have to apply more to the principle to pay down the balance. However,
>> the danger with 1st position
>> situations comes when the interest rates rise, even minimally. A
>> single point increase can
>> suck away a persons discretionary income and open the possibility of
>> losing your home.
>> The second position HEloc, however, used in connection with our
>> proprietary software and
>> ongoing personal support, allows the homeowner to shield themselves
>> from that risk.
>>
>> We are able to use smaller amounts of money, use the HELOC as a
>> primary checking account,
>> where we make payments to the line of credit and pay our bills from
>> the line of credit. This
>> then uses the paychecks to hold down the balance so the monthly
>> finance charge is a minimum,
>> which the discretionary income eats away at the actual balance. Of
>> course you still have to pay
>> the money back, and of course it's going to come out of your pocket.
>> However, it is controlled
>> and manageable with the software.
>>
>> This process allows you to use the Banks money at a reduced interest
>> charge (because we are
>> using a HELOC with an interest only payment option, open ended
>> interest and a variable rate, so
>> we can make multiple payments per month), and the Bank is only looking
>> for a finance charge. Our
>> paycheck becomes that finance charge, as the discretionary income eats
>> away at the actual balance.
>>
>> Now, the main question poeple ask is: "What is 'discretionary
>> income'?" It's what you have at the
>> end of the month which you would normally put in savings. You say you
>> do not have any? Most people do.
>> Do you have credit cards? Car loans? Student loans? Medical bill
>> payments? Thats discretionary
>> income, IF you have enough equity in your home to swallow up that debt
>> in the 2nd position HELOC.
>> Then the freed up monthly payments become the discretionary income,
>> which feeds the program.
>>
>> I think what Ashley meant was you do not have any out of pocket expense
>> to START the MMA Program
>> (we take it out of the HELOC), you do not have to finance your PRIMARY
>> mortgage, but he was incorrect
>> about using the Banks money and NOT our own. We use the Banks money at
>> a reduced interest rate,
>> or interest free, then have to pay it back...but we can do it over
>> time, using this phenominal program.
>>
>> Hope that helps you and the readers of this post.
>>
>
>
> That all makes perfect sense, but I did not gleem that from Ashley's
> posts. I have done precisely the same thing, add up debt payments and show
> borrowers how they can get rid of the debt through equity, then make the
> debt payment to the equity account. There is nothing new here, we call it
> a cash out refinance, or a Second Trust Deed (depending on how it is
> done).
>
> Ashley specifically stated that there was no refinance, and technically I
> suppose that could be true. If she writes a new 2nd TD, there is no "refi"
> per se. And, there are loads of HELOC 2nds that have no front end load,
> and many that are done at prime, or prime + .25, for life. If I paid off
> the credit cards, then cut them up, then made the same payment (total of
> the old payments) to the HELOC and periodically made large payments tothe
> 1st using available funds from the 2nd, then I could do what she is
> suggesting.
>
> Maybe.
>
>
>
>
>
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Re: Equity Acceleration
