Archive for the ‘MMA’ Category

MMA Users Log – Monthly Maintenance

Tuesday, April 14th, 2009

If, over time, your MMA action plan all of a sudden loses all the action plan entries please notice when this occurs.  I believe it may occur every so often.  There seems to be a small problem when the Heloc payment date becomes several months delayed.  In the Accounts section you edit the Heloc you will notice a payment due date.  That date was many months past when my action plan “lost entries.” 

I used the great, new feature, CHAT, and within seconds a nice gentleman names Jason was asking how he could help me.  He found the problem and updated the next due date to the months end and voila’ everything was fine and dandy after logging off and then back in again.  I asked if this will happen again and he said maybe depending on how quickly that can be fixed.  Meanwhile, if this happens to you then just update the heloc due date and it will correct itself.

Remember, you never have to make a payment on your heloc since your income is getting deposited there.

Have fun getting out of debt super fast!!

MMA Users Log – Small Payments equal Years of Mortgage

Tuesday, January 27th, 2009

Oh My God!  I am a United First Financial MMA client and I recently made a change.  I was paying $130 a month to our Orthodontist for my daughters braces.  The last check was returned to me because that debt was paid off.  When I originally set up the “EXPENSE” as $130 a month I was on version 3 and I could not put in an ending date.  So what I did now is add next month as the ending date for this expense.  I could have deleted the expense since I no longer have it but I thought I’d use the ending date feature.

Well what happened is that my mortgage payoff date moved forward 3.5 years!  Three and a half years with just a $130 increase in cash flow!!!  Wow!! I’m so excited.  It’s pretty amazing the ability of the MMA to calculate that for me and illuminate my money sense.  I’m on the way to becoming moneywise!!

Refinance the mortgage or not? It’s not always the best.

Tuesday, January 27th, 2009

The many mortgage brokers that call me all tell me the same thing, with interest rates as low as they are now and by the way they are only going to go up, isn’t it time for you to refinance and lock in that new low rate?

What they don’t tell you is that more than half of the refinance candidates would be better off financially not refinancing.  The brokers get paid on every refi so asking them if it is beneficial to you to refinance is not the best advice.  The mortgage professionals typically point out the low interest rate and the lower monthly payment but nothing else.  They don’t tell you that if you are refinancing a twenty-seven year mortgage that you are increasing your payments by three years!!  Also, when the broker is talking they often say that the refinance will be no out of pocket expense to you and you are thinking cool, no cost.  But that is misleading.  The costs are often rolled into the mortgage balance.

Most folks when looking at whether they should refinance or not look at only the interest rate and the lower monthly payment.  And most often the decision is made on just the monthly payment reduction.  Even the refinance calculators do not show you the total costs of a refinance.  All they give you is the monthly payment savings amount and then divide that by the cost of the refi and then in summary give you the number of months to recoup the initial cost.  That always is some number of months so that calculation always shows you that it is beneficial to refinance (assuming the new monthly payment is lower than the original payment).

They conveniently forget to show you that now your mortgage term is now longer and so your overall cost over the life of your loan is higher.  But if you look at the longer duration of the mortgage and take the mortgage payment and times it by the increased number of payments you get a rather large number.  But since you have a monthly payment savings you divide that large number by the monthly savings to get a number of months it will take to break even.  So it would make sense to refinance to a lower interest rate loan if you plan on keeping your loan longer than the break even point.

If you are familiar with United First Financial MMA program there is one other calculation that can be done to insure that it would be beneficial to refinance or not.  Your agent can run the new numbers through the Analysis software.  The Analysis takes into account the lower interest rate, the longer mortgage duration, and the increased cash flow created by the monthly savings rate.  Then and only then can you be sure the refinance would be beneficial.

Don’t be taken by a lower monthly payment.  Always ask for the TOTAL COSTS.