My Journey to Financial Freedom Part 6

October 16, 2009 by Sue Scaletta
Filed under: Debt Free, Economy, Finance, Financial Freedom, Money Merge Account 

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I want to recap what I covered in “My Journey to Financial Freedom Part 4” where I told you about how we had trouble with the bank where we had our home equity line of credit (heloc) from the very beginning.  To reiterate when we signed for the heloc loan all of the paperwork was accurate, but when the heloc was funded, and we received a copy of the loan papers with my husband’s name on them and a stranger’s name. My name was not even on our loan.  We didn’t have a clue who this woman was nor did the bank and to make matters worse it took a long time before we could get her name taken off our heloc account. Because of this error we had never taken an advance from our heloc account until we became clients of United First Financial and started using the Money Merge Account.

In spite of the problems with our bank, our experiences with the Money Merge Account system were well beyond expectations. Over a period of six months from August 2008 until February 2009 our average interest payment on our heloc loan $39.00 a month.

Each month when we receive our income we would deposit it into our heloc and let it stay there for the maximum time that we could.  The deposits were made in the form of extra principal payments.  We would withdraw the money from our heloc when our bills needed to be paid.  Over the month with the deposits and withdrawals from our heloc the average daily balance of our loan varied. If you remember during our draw period from August 2008 to January 2009 we pulled of $49,635 from our heloc.  By February our heloc balance was down to $33,487.  By following the guidance of United First Financial’s Money Merge Account coaching system we reduced our heloc balance by $16,148. In addition, during this time period we eliminated one of our home mortgage loans, a second that we had on one of our rental properties.  Now we had eight mortgages instead of nine mortgages that we had before we became clients of United First Financial.  The Money Merge Account had us on the road to financial freedom.

Then in February 2009 our bank reacted like many other banks have done to countless of other homeowners.  They decided to freeze our heloc,  in spite of the fact that we had a credit score that was above 790.  They did this because of the rapid reduction in property values.  Thank goodness we had finished withdrawing funds to pay for our solar electricity and our unplanned rental expenses had diminished when they made their decision.  Unfortunately they put a damper into our plans to reduce our heloc loan balance of $33,487.

The Money Merge Account Financial Coaching

There are many good things about the Money Merge Account system and one of them is the coaching ability that helped us during this situation. Our ability to deposit our entire income into our heloc thereby reducing our principal balance and keep our monthly interest lower was no longer an option because once we  put the money in we could not get it back out to pay bills.  Because of this during the next four months when we could no longer utilize the heloc with our Money Merge Account our interest payments nearly tripled.  Our average monthly charge went from $39 a month to $116 and the worst part was that the loan amount balance was not being reduced.  Based on this final action from our bank we began looking for a new bank that would meet our needs. In August we opened a new heloc loan account with another bank.  Our first withdrawal from our new heloc was $33,133 paid to the order of our old bank to pay off the heloc loan.

Back on Track to Become Debt Free

Now with the new heloc in place we were back on track to become debt free with the Money Merge Account.  In just a month we were able to reduce our heloc balance to $21,733 using  the money we had accumulated in our old bank account that we couldn’t deposit into our old heloc because we couldn’t get it back out if we needed it.  Our interest charge for the first month was $29.

In September 2009, the Money Merge Account prompted us to take an advance of $8,660 from our heloc to pay off the second home mortgage loan of another one of our rental properties. So we now have reduced our mortgages from nine to seven and as each month goes by we are making more and more gains towards becoming debt free.

So allow me to recap.  In one year’s time we paid $28,580 down in principal on our loans.

With the Money Merge Account
Mortgage loans as of July 2008: $474,619
Mortgage loans as of July 2009:$446,039
Principal reduction: $ 28,580

As a comparison, here is the information from the previous year prior to becoming a client with United First Financial and using the Money Merge Account system.

Prior to using the Money Merge Account
Mortgage loans as of July 2007:$481,047
Mortgage loans as of July 2008: $474,619
Principal reduction: $ 6,428

Our Money Merge Account Dashboard Results

According to the dashboard on our Money Merge Account software we now have less than 9 years to pay off all of our debt.  That includes all of our mortgages, the solar electricity, our auto loan, the cost of the Money Merge Account program and all of the unplanned rental repairs we experienced. Compare that to July 2008 when we had 26.5 years left to pay!

The interest we are scheduled to pay to all of our lenders will now be $121,879 instead of the $479,869 we originally had agreed to pay to them.

We will save $357,990 which is a 102% return on investment of the cost of the Money Merge Account program.  Is the Money Merge Account program worth the cost or is it too expensive?  The answer is pretty straight forward.  The software is SO MUCH MORE than worth the cost; especially if you consider what the cost would have been to refinance.  And had we refinanced, our loan would have started over and almost all of our monthly mortgage payments would have gone to interest.  With the Money Merge Account we didn’t have to refinance or make changes to our household budget.

My husband and I have never regretted becoming clients of United First Financial and purchasing the Money Merge Account system.  It guides us on the path to become debt free.  No matter what financial challenges come our way, we will be able to make the right financial choices with United First Financial there to coach us along the way.

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