[ucodegen]

I can’t tell what the consensus is exactly, but I hear many perspectives from piggs which conclude that it is not wise to pay off a house prematurely. The reasoning being that the mortgage,including tax rebate program, is cheaper than one can capitalize money otherwise.

BINGO. It is the cheapest loan form available because the interest is deductible. Because it is secured by hard assets, it is considered low risk and therefore has a low risk premium.

The only caveat is to make sure the balance of assets are not squandered and are instead put into some investment article that yields a higher rate than the tax adjusted cost of the mortgage.

[ucodegen]

I can’t tell what the consensus is exactly, but I hear many perspectives from piggs which conclude that it is not wise to pay off a house prematurely. The reasoning being that the mortgage,including tax rebate program, is cheaper than one can capitalize money otherwise.

BINGO. It is the cheapest loan form available because the interest is deductible. Because it is secured by hard assets, it is considered low risk and therefore has a low risk premium.

The only caveat is to make sure the balance of assets are not squandered and are instead put into some investment article that yields a higher rate than the tax adjusted cost of the mortgage.

[ucodegen]

Ucodegen, I still don’t see how you are showing the board how it doesn’t work?
They are following, you are not. You refuse to sit down and run the numbers by hand. Trust the software.. which coincidentally is exactly what Edward Griffin told you not to do when it came to voting (The Coalition for Visible Ballots – founding member).

Well, sorry, I’m not impressed by that. I’m in the same situation as you more or less, but that doesn’t pertain to the thread.
If you were in the same situation, this program would not even be on your radar. You would have absolutely no interest in it. Calling BS here too!

Let’s stick to the conversation…..If you are disciplined enough to follow the program…does it work?

If you say no, show us.
Wrong logic. We are sticking to the conversation, but not accepting what you are postulation because you have not proving it and it violates basic logic. You have to show it works first. No-one gets to postulate and then say ‘disprove me’. Show monthly columns, Excel format data from both the HELOC, mortgage balance, etc for two year period. Also show other withdraws, deposits. Each row is one time period. State time and date that interest load is calculated against outstanding balance.

One more thing…for the sake of the conversation, let’s assume these software programs are free.
Not interested. Won’t waste my time because I know it doesn’t work. Just like all those other late night infomercials..

[ucodegen]

Ucodegen, I still don’t see how you are showing the board how it doesn’t work?
They are following, you are not. You refuse to sit down and run the numbers by hand. Trust the software.. which coincidentally is exactly what Edward Griffin told you not to do when it came to voting (The Coalition for Visible Ballots – founding member).

Well, sorry, I’m not impressed by that. I’m in the same situation as you more or less, but that doesn’t pertain to the thread.
If you were in the same situation, this program would not even be on your radar. You would have absolutely no interest in it. Calling BS here too!

Let’s stick to the conversation…..If you are disciplined enough to follow the program…does it work?

If you say no, show us.
Wrong logic. We are sticking to the conversation, but not accepting what you are postulation because you have not proving it and it violates basic logic. You have to show it works first. No-one gets to postulate and then say ‘disprove me’. Show monthly columns, Excel format data from both the HELOC, mortgage balance, etc for two year period. Also show other withdraws, deposits. Each row is one time period. State time and date that interest load is calculated against outstanding balance.

One more thing…for the sake of the conversation, let’s assume these software programs are free.
Not interested. Won’t waste my time because I know it doesn’t work. Just like all those other late night infomercials..

[ucodegen]

Ucodegen, I still don’t see how you are showing the board how it doesn’t work?
They are following, you are not. You refuse to sit down and run the numbers by hand. Trust the software.. which coincidentally is exactly what Edward Griffin told you not to do when it came to voting (The Coalition for Visible Ballots – founding member).

Well, sorry, I’m not impressed by that. I’m in the same situation as you more or less, but that doesn’t pertain to the thread.
If you were in the same situation, this program would not even be on your radar. You would have absolutely no interest in it. Calling BS here too!

Let’s stick to the conversation…..If you are disciplined enough to follow the program…does it work?

If you say no, show us.
Wrong logic. We are sticking to the conversation, but not accepting what you are postulation because you have not proving it and it violates basic logic. You have to show it works first. No-one gets to postulate and then say ‘disprove me’. Show monthly columns, Excel format data from both the HELOC, mortgage balance, etc for two year period. Also show other withdraws, deposits. Each row is one time period. State time and date that interest load is calculated against outstanding balance.

One more thing…for the sake of the conversation, let’s assume these software programs are free.
Not interested. Won’t waste my time because I know it doesn’t work. Just like all those other late night infomercials..

[ucodegen]

Ucodegen, I still don’t see how you are showing the board how it doesn’t work?
They are following, you are not. You refuse to sit down and run the numbers by hand. Trust the software.. which coincidentally is exactly what Edward Griffin told you not to do when it came to voting (The Coalition for Visible Ballots – founding member).

Well, sorry, I’m not impressed by that. I’m in the same situation as you more or less, but that doesn’t pertain to the thread.
If you were in the same situation, this program would not even be on your radar. You would have absolutely no interest in it. Calling BS here too!

Let’s stick to the conversation…..If you are disciplined enough to follow the program…does it work?

If you say no, show us.
Wrong logic. We are sticking to the conversation, but not accepting what you are postulation because you have not proving it and it violates basic logic. You have to show it works first. No-one gets to postulate and then say ‘disprove me’. Show monthly columns, Excel format data from both the HELOC, mortgage balance, etc for two year period. Also show other withdraws, deposits. Each row is one time period. State time and date that interest load is calculated against outstanding balance.

One more thing…for the sake of the conversation, let’s assume these software programs are free.
Not interested. Won’t waste my time because I know it doesn’t work. Just like all those other late night infomercials..

[ucodegen]

That guy that wrote that pdf and backs it is Edward Griffin the author of The Creature from Jekyll Island: A Second Look at the Federal Reserve.

So… Sorry, it doesn’t impress.

4plexowner
Because the HELOC is short term money it COSTs less than the long term mortgage money even though the interest rate is higher on the HELOC (interesting concept that I haven’t fully grasped yet)

They spin it with ‘duration’. The problem is that you are carrying a revolving balance.. so the duration is actually full term. You compare from time period to time period, analyzing total debt/assets. It doesn’t work.

You should notice that this ‘MMA program’ shows many similar characteristics of other snake-oil programs. You profit greatly from some proprietary process that took years to tune…. YAWN, seen it before

Ucodegen, I’m not a rep nor do I have any interest in this program. According to your statement… but this is the internet.. I have no proof of that, and you have rarely if ever posted on other matters.

You once again are quick to spout off without doing your homework. Page 3 and 4 addresses your concern about a “higher rate”.
Sorry, I have done the homework. This is why I have the assets I have and can buy a house with cash, if I so desire. There are some other people (probably quite a few) that are in the same situation on this board. We are not hungering for some magic to make the mortgage costs go down.

[ucodegen]

That guy that wrote that pdf and backs it is Edward Griffin the author of The Creature from Jekyll Island: A Second Look at the Federal Reserve.

So… Sorry, it doesn’t impress.

4plexowner
Because the HELOC is short term money it COSTs less than the long term mortgage money even though the interest rate is higher on the HELOC (interesting concept that I haven’t fully grasped yet)

They spin it with ‘duration’. The problem is that you are carrying a revolving balance.. so the duration is actually full term. You compare from time period to time period, analyzing total debt/assets. It doesn’t work.

You should notice that this ‘MMA program’ shows many similar characteristics of other snake-oil programs. You profit greatly from some proprietary process that took years to tune…. YAWN, seen it before

Ucodegen, I’m not a rep nor do I have any interest in this program. According to your statement… but this is the internet.. I have no proof of that, and you have rarely if ever posted on other matters.

You once again are quick to spout off without doing your homework. Page 3 and 4 addresses your concern about a “higher rate”.
Sorry, I have done the homework. This is why I have the assets I have and can buy a house with cash, if I so desire. There are some other people (probably quite a few) that are in the same situation on this board. We are not hungering for some magic to make the mortgage costs go down.

[ucodegen]

That guy that wrote that pdf and backs it is Edward Griffin the author of The Creature from Jekyll Island: A Second Look at the Federal Reserve.

So… Sorry, it doesn’t impress.

4plexowner
Because the HELOC is short term money it COSTs less than the long term mortgage money even though the interest rate is higher on the HELOC (interesting concept that I haven’t fully grasped yet)

They spin it with ‘duration’. The problem is that you are carrying a revolving balance.. so the duration is actually full term. You compare from time period to time period, analyzing total debt/assets. It doesn’t work.

You should notice that this ‘MMA program’ shows many similar characteristics of other snake-oil programs. You profit greatly from some proprietary process that took years to tune…. YAWN, seen it before

Ucodegen, I’m not a rep nor do I have any interest in this program. According to your statement… but this is the internet.. I have no proof of that, and you have rarely if ever posted on other matters.

You once again are quick to spout off without doing your homework. Page 3 and 4 addresses your concern about a “higher rate”.
Sorry, I have done the homework. This is why I have the assets I have and can buy a house with cash, if I so desire. There are some other people (probably quite a few) that are in the same situation on this board. We are not hungering for some magic to make the mortgage costs go down.

[ucodegen]

That guy that wrote that pdf and backs it is Edward Griffin the author of The Creature from Jekyll Island: A Second Look at the Federal Reserve.

So… Sorry, it doesn’t impress.

4plexowner
Because the HELOC is short term money it COSTs less than the long term mortgage money even though the interest rate is higher on the HELOC (interesting concept that I haven’t fully grasped yet)

They spin it with ‘duration’. The problem is that you are carrying a revolving balance.. so the duration is actually full term. You compare from time period to time period, analyzing total debt/assets. It doesn’t work.

You should notice that this ‘MMA program’ shows many similar characteristics of other snake-oil programs. You profit greatly from some proprietary process that took years to tune…. YAWN, seen it before

Ucodegen, I’m not a rep nor do I have any interest in this program. According to your statement… but this is the internet.. I have no proof of that, and you have rarely if ever posted on other matters.

You once again are quick to spout off without doing your homework. Page 3 and 4 addresses your concern about a “higher rate”.
Sorry, I have done the homework. This is why I have the assets I have and can buy a house with cash, if I so desire. There are some other people (probably quite a few) that are in the same situation on this board. We are not hungering for some magic to make the mortgage costs go down.

[ucodegen]

Excerpts..

They developed a method to borrow
money at one cost and use it to eliminate a much higher-cost mortgage.

Pure BS. Mortgage loans are the lowest costs loan products. They are a securitized loan which the bank sees as low risk, therefore the risk premium is the lowest on them. HELOCs are subordinate loans to the mortgage, so they have a higher risk premium. In addition, they are callable by the loanee (ie. can be paid instantly and therefore the investor fronting the money for the HELOC has to find another place to put the money). This also contributes to HELOC rates being higher than mortgage rates. If your mortgage rate is higher than an HELOC… refinance!!

The MMA is a classic example of borrowing to make money. It borrows money from a line-of-credit (LOC) at one cost and uses it to pay down a mortgage at a much higher cost. Notice, I did not say rate, I said cost. That is because the rate of the LOC usually will be higher than the rate of the mortgage, but the cost will be the other way around, because the rate of the LOC will be charged for a very short period f time (usually less than three months) whereas the rate of the mortgage typically will be charged hundreds of months.

BS repeated with a twist, forgetting that on prepay, you also cut the carried balance on the mortgage for that month period. No point in carrying the higher rate of an HELOC.

When I tried to explain how the program worked, I just couldn’t do it. She said that if I
don’t understand something and can’t explain it, I shouldn’t do it.

The length of the loan is as important as the rate.
Wrong. If you are using the short duration as a revolving credit, you are actually carrying it for the full duration. It is either prepay the mortgage costing a lower rate over the month interval, use the HELOC to pay/prepay and carry a balance on HELOC until the check comes in or, pay and invest the balance. Duration of comparison on all is the same 1 month window. The HELOC is being used like a revolving line of credit, secured by the property but subordinate to the primary mortgage and any seconds. The HELOC is also a recourse loan.

Good advice.. but not directly presented by the MMA program. ..the software will do it all

While your money is accumulating in a checking or savings account waiting to be sent, it is not working for you. you. At best, it may earn a pittance of interest that falls short of inflation, which means it actually is losing value and, on top of that, you have to pay income taxes on the pittance;
Incorrect. Most checking accounts yield, some quite decently. In addition, the pittance yield is better than 1.5% points over the mortgage in costing you.

We are dealing here with a process similar to arbitrage
Yes, you are arbitraging yourself into more costs. The HELOC has a higher monthly carrying cost than the mortgage. The arbitrage is going the wrong way.

Yes, I think you are missing the fact that it has taken years to perfect the algorithms that are built into the program that tracks the comparative interest balances between the ALOC and the mortgage(s) and then produces action points on specific dates to make payments and maximize the net gain.
More BS. Make is sound like there is a lot of ‘important stuff’ behind it.

I am not going through the rest of that PDF because I am now having problems typing… ROTFLMAO…

[ucodegen]

Excerpts..

They developed a method to borrow
money at one cost and use it to eliminate a much higher-cost mortgage.

Pure BS. Mortgage loans are the lowest costs loan products. They are a securitized loan which the bank sees as low risk, therefore the risk premium is the lowest on them. HELOCs are subordinate loans to the mortgage, so they have a higher risk premium. In addition, they are callable by the loanee (ie. can be paid instantly and therefore the investor fronting the money for the HELOC has to find another place to put the money). This also contributes to HELOC rates being higher than mortgage rates. If your mortgage rate is higher than an HELOC… refinance!!

The MMA is a classic example of borrowing to make money. It borrows money from a line-of-credit (LOC) at one cost and uses it to pay down a mortgage at a much higher cost. Notice, I did not say rate, I said cost. That is because the rate of the LOC usually will be higher than the rate of the mortgage, but the cost will be the other way around, because the rate of the LOC will be charged for a very short period f time (usually less than three months) whereas the rate of the mortgage typically will be charged hundreds of months.

BS repeated with a twist, forgetting that on prepay, you also cut the carried balance on the mortgage for that month period. No point in carrying the higher rate of an HELOC.

When I tried to explain how the program worked, I just couldn’t do it. She said that if I
don’t understand something and can’t explain it, I shouldn’t do it.

The length of the loan is as important as the rate.
Wrong. If you are using the short duration as a revolving credit, you are actually carrying it for the full duration. It is either prepay the mortgage costing a lower rate over the month interval, use the HELOC to pay/prepay and carry a balance on HELOC until the check comes in or, pay and invest the balance. Duration of comparison on all is the same 1 month window. The HELOC is being used like a revolving line of credit, secured by the property but subordinate to the primary mortgage and any seconds. The HELOC is also a recourse loan.

Good advice.. but not directly presented by the MMA program. ..the software will do it all

While your money is accumulating in a checking or savings account waiting to be sent, it is not working for you. you. At best, it may earn a pittance of interest that falls short of inflation, which means it actually is losing value and, on top of that, you have to pay income taxes on the pittance;
Incorrect. Most checking accounts yield, some quite decently. In addition, the pittance yield is better than 1.5% points over the mortgage in costing you.

We are dealing here with a process similar to arbitrage
Yes, you are arbitraging yourself into more costs. The HELOC has a higher monthly carrying cost than the mortgage. The arbitrage is going the wrong way.

Yes, I think you are missing the fact that it has taken years to perfect the algorithms that are built into the program that tracks the comparative interest balances between the ALOC and the mortgage(s) and then produces action points on specific dates to make payments and maximize the net gain.
More BS. Make is sound like there is a lot of ‘important stuff’ behind it.

I am not going through the rest of that PDF because I am now having problems typing… ROTFLMAO…

[ucodegen]

Excerpts..

They developed a method to borrow
money at one cost and use it to eliminate a much higher-cost mortgage.

Pure BS. Mortgage loans are the lowest costs loan products. They are a securitized loan which the bank sees as low risk, therefore the risk premium is the lowest on them. HELOCs are subordinate loans to the mortgage, so they have a higher risk premium. In addition, they are callable by the loanee (ie. can be paid instantly and therefore the investor fronting the money for the HELOC has to find another place to put the money). This also contributes to HELOC rates being higher than mortgage rates. If your mortgage rate is higher than an HELOC… refinance!!

The MMA is a classic example of borrowing to make money. It borrows money from a line-of-credit (LOC) at one cost and uses it to pay down a mortgage at a much higher cost. Notice, I did not say rate, I said cost. That is because the rate of the LOC usually will be higher than the rate of the mortgage, but the cost will be the other way around, because the rate of the LOC will be charged for a very short period f time (usually less than three months) whereas the rate of the mortgage typically will be charged hundreds of months.

BS repeated with a twist, forgetting that on prepay, you also cut the carried balance on the mortgage for that month period. No point in carrying the higher rate of an HELOC.

When I tried to explain how the program worked, I just couldn’t do it. She said that if I
don’t understand something and can’t explain it, I shouldn’t do it.

The length of the loan is as important as the rate.
Wrong. If you are using the short duration as a revolving credit, you are actually carrying it for the full duration. It is either prepay the mortgage costing a lower rate over the month interval, use the HELOC to pay/prepay and carry a balance on HELOC until the check comes in or, pay and invest the balance. Duration of comparison on all is the same 1 month window. The HELOC is being used like a revolving line of credit, secured by the property but subordinate to the primary mortgage and any seconds. The HELOC is also a recourse loan.

Good advice.. but not directly presented by the MMA program. ..the software will do it all

While your money is accumulating in a checking or savings account waiting to be sent, it is not working for you. you. At best, it may earn a pittance of interest that falls short of inflation, which means it actually is losing value and, on top of that, you have to pay income taxes on the pittance;
Incorrect. Most checking accounts yield, some quite decently. In addition, the pittance yield is better than 1.5% points over the mortgage in costing you.

We are dealing here with a process similar to arbitrage
Yes, you are arbitraging yourself into more costs. The HELOC has a higher monthly carrying cost than the mortgage. The arbitrage is going the wrong way.

Yes, I think you are missing the fact that it has taken years to perfect the algorithms that are built into the program that tracks the comparative interest balances between the ALOC and the mortgage(s) and then produces action points on specific dates to make payments and maximize the net gain.
More BS. Make is sound like there is a lot of ‘important stuff’ behind it.

I am not going through the rest of that PDF because I am now having problems typing… ROTFLMAO…

[ucodegen]

Excerpts..

They developed a method to borrow
money at one cost and use it to eliminate a much higher-cost mortgage.

Pure BS. Mortgage loans are the lowest costs loan products. They are a securitized loan which the bank sees as low risk, therefore the risk premium is the lowest on them. HELOCs are subordinate loans to the mortgage, so they have a higher risk premium. In addition, they are callable by the loanee (ie. can be paid instantly and therefore the investor fronting the money for the HELOC has to find another place to put the money). This also contributes to HELOC rates being higher than mortgage rates. If your mortgage rate is higher than an HELOC… refinance!!

The MMA is a classic example of borrowing to make money. It borrows money from a line-of-credit (LOC) at one cost and uses it to pay down a mortgage at a much higher cost. Notice, I did not say rate, I said cost. That is because the rate of the LOC usually will be higher than the rate of the mortgage, but the cost will be the other way around, because the rate of the LOC will be charged for a very short period f time (usually less than three months) whereas the rate of the mortgage typically will be charged hundreds of months.

BS repeated with a twist, forgetting that on prepay, you also cut the carried balance on the mortgage for that month period. No point in carrying the higher rate of an HELOC.

When I tried to explain how the program worked, I just couldn’t do it. She said that if I
don’t understand something and can’t explain it, I shouldn’t do it.

The length of the loan is as important as the rate.
Wrong. If you are using the short duration as a revolving credit, you are actually carrying it for the full duration. It is either prepay the mortgage costing a lower rate over the month interval, use the HELOC to pay/prepay and carry a balance on HELOC until the check comes in or, pay and invest the balance. Duration of comparison on all is the same 1 month window. The HELOC is being used like a revolving line of credit, secured by the property but subordinate to the primary mortgage and any seconds. The HELOC is also a recourse loan.

Good advice.. but not directly presented by the MMA program. ..the software will do it all

While your money is accumulating in a checking or savings account waiting to be sent, it is not working for you. you. At best, it may earn a pittance of interest that falls short of inflation, which means it actually is losing value and, on top of that, you have to pay income taxes on the pittance;
Incorrect. Most checking accounts yield, some quite decently. In addition, the pittance yield is better than 1.5% points over the mortgage in costing you.

We are dealing here with a process similar to arbitrage
Yes, you are arbitraging yourself into more costs. The HELOC has a higher monthly carrying cost than the mortgage. The arbitrage is going the wrong way.

Yes, I think you are missing the fact that it has taken years to perfect the algorithms that are built into the program that tracks the comparative interest balances between the ALOC and the mortgage(s) and then produces action points on specific dates to make payments and maximize the net gain.
More BS. Make is sound like there is a lot of ‘important stuff’ behind it.

I am not going through the rest of that PDF because I am now having problems typing… ROTFLMAO…

[ucodegen]

I am familiar with the system. What it is really addressing is the average outstanding balance. By using the HELOC approach you are able to immediately pay down a debt.

With another debt at a higher rate.

Wow, I expect more out of the piggs….so quick to make a call with basic assumptions..

Wrong.. we see through the sales attempt. Debate with logic not sales brochures.

[Author]

Posts