How It Works
The Money Merge Account™ system uses online software to streamline financial transactions between a primary mortgage and an Advanced Line of Credit or ALOC, generally a home equity line of credit.
The software directs you to make significant extra payments towards your mortgage (sometimes thousands of dollars) from their ALOC, using checks or wire transfers. To reduce the balance on their ALOC, they “deposit” their income as soon as possible.
As the month goes on, you use your ALOC funds as you would use your checking account. Because ALOC interest compounds daily, you can keep a low balance for most of the month while using funds from the ALOC to pay their monthly expenses, including your mortgage payment. The software changes the timing of your extra mortgage principal payments so that your income payments cover all monthly ALOC finance charges, producing very little compound interest.
In effect, the system allows you to eliminate years worth of compounded mortgage interest in exchange for one months amount of ALOC interest charges.
This simple concept involves complicated interest equations, making it impractical to calculate manually. The Money Merge Account™ software makes these math calculations with advanced math engines. As you enter you enter your income and expenses, the software automatically adjusts the extra principal payment and the time you have potentially saved on your mortgage
The Money Merge Account consists of three major components:
1. Your Existing Primary mortgage
The existing mortgage on your home is the foundation for the Money Merge Account.
2. An Advanced Line of Credit (ALOC)
The Money Merge Account program uses an advanced equity line of credit as a vehicle or a tool to drive the program. The equity line of credit must have the capacity to operate similarly to a primary checking account and be set up with an open-end interest calculation (rather than a closed-end interest calculation). Combined with the Money Merge Account's web-based system, this creates a formula in which the money in your line of credit account generates an interest cancellation on your primary mortgage.
3. MMA software
The online Money Merge Account system makes a virtual connection between your bank account, the advanced line of credit, and your primary mortgage. Each time you transfer income into your account, it registers as a decrease to your mortgage balance. By decreasing your mortgage balance, you now lower the balance on which interest accrues. By decreasing the balance on which interest accrues, you increase the portion of your monthly payment which is credited toward your principal pay down. The algorithms in the proprietary Money Merge Account system are systematically programmed to create the highest interest savings possible in the least amount of time under this system.