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Un-mortgaging AmericaThe state of Americanmortgages is big news.The media wantsyou to believe we are

experiencing an unprecedented loss ofresidential home values. Current facts andhistoric trends do not support this. 2002mortgage defaults were higher than 2007(Inside Mortgage Finance.)

On average in 2007, home prices areoff about 1.4 percent nationally. This is thefirst time since 1929 that average houseprice appreciation is negative. However,this follows a value run-up of over 100percent in the last five years per the U.S.Office of Federal Housing EnterpriseOversight (OFHEO.)

Nothing is more recession-resistantand valuable than a nice home in a goodschool district, except maybe a home witha carefully managed mortgage paymentstrategy or better, one that is mortgagefree. But how could this be possible?

Zero to (Three Hundred and)Sixty Backwards

This strategy is based on a simplequestion:

If your lender can use your moneyto earn higher interest, using this samemoney why can't you pay down yourmortgage faster?

But how is it possible, using yourmoney more wisely and with no changein lifestyle, to pay down your mortgageten to fifteen years faster than a typical360-month principal and interest (P&I)mortgage?

Too Good to Be True?We greeted this with skepticism. We

had heard of making mortgage paymentsevery two weeks. Clearly paying 13months' worth of payments every 12months would shorten a mortgage term.But collapsing the mortgage term as muchas 60 percent and cutting interest by 50percent, seemed to defy logic and goodsense.

If this was so obvious, why hadn'tmajor American financial servicescompanies embraced this strategy tooffer customers a competitive advantage?The answer: Until now no one anywherehad built a homeowner mortgagemanagement tool that was not part of amajor lending system or dependent on thehomeowner refinancing their home.

Making Mortgage PaymentAcceleration Work for You

We asked the question of a number ofbanks, mortgage lenders and accountants.Nearly every one of them had little ornothing to say. We then discovered anewly emerging group of companies whoprovide products or loans that incorporatemortgage payment accelerationfeatures. This supplement discusses theopportunity, the issues, the financialprocess and the alternatives.

We talked to the people behind thesecompanies and offerings to understandthe vision, the logic and the objectives ofthese providers.

We came away with two impressions:1. Mortgage payment acceleration isa very viable strategy that should beunderstood by anyone who desiresto build and secure personal assets,including homeownership.2. Market leadership is only possiblewith a vision, sound product, full-timecustomer service by a dedicated supportorganization and wide distribution by acommitted sales force.

We found the Money MergeAccount™ system from United FirstFinancialTM as the leader in this market.We believe our findings will complementyour personal research and experience.

United First Financial Places Clients'Finances First

On the basis of our research, weaward United First Financialand their Money Merge Accountsystem with the 2008 PersonalReal Estate Investor MagazineEditors' Choice Award for client

mortgage innovation. The Money MergeAccount system simplifies a complexworld so homeowners can manage theirfinancial condition better. This aid toimproved homeowner comprehensionand control of their financial condition isa seismic shift for the mortgage industryand can deliver savings and wealth toclients. This we applaud.

Good luck and may God speed you tomortgage freedom.

March -April 2008 . PersonalRealEstateInvestor mil

Why Do You Care? Paying Off Your Mortgage FasterBy the Editors

If you haven't heard about mortgagepayment acceleration plans yet, expectthese to become mainstream very quickly.Financial institutions are all looking for acompetitive edge in a "me too" world ofpersonal financial services.

The power of good mortgagerepayment acceleration programs is thatthey work to a client's benefit for a fewsimple but obvious reasons:

1. Saving money on your mortgage isattractive.

Who doesn't want to pay less, saveand make more money?

2. Paying off your mortgage yearsearly builds personal wealth.

The idea of paying off a mortgageby selling the property and immediatelypaying it off is easy to understand. Butpaying off that mortgage five, ten or moreyears early, keeping the property, andpossibly saving tens, if not hundreds, ofthousands of dollars in interest paymentsflies in the face of tradition. How couldthat be?

3. Paying less interest and earningmore equity is revolutionary.

Paying the lowest interest on anyhome or equity loan while earning thehighest interest on your cash is the keyto the apparent puzzle of paying off yourmortgage faster.Simplypaying less intereston your loans (financial liabilities) whileearning more interest on your cash (assets)accelerates the mortgage payoff withoutdisrupting your current lifestyle. .

This type of system was developed andimplemented by United First Financial™.

The following isn't an explanationof the financial riddle of paying less andgetting more. Explaining the mechanicsof how this can work for you and gettingyour mortgage paid off faster is the reasonfor this information.

Traditional Financial ServiceRelationships

Complete "client relationshipmanagement" is the goal of good customerservice. This term was coined by financialservices people, banks, and lenders toexplain the fact that the average customerhas more than one account: a checkingaccount, a credit/debit card, maybe asavings account, a mortgage, ahd a homeequity line.

Financial institutions are anxious tooffer more services. Check your mail boxfor the latest credit card or loan offer.. March -April 2008 . Personal RealEstate Investor

A simple retail banking model lookslike Figure 1.

The message is simple: financialinstitutions want to serve their customersas completely as possible because it'sprofitable for the provider and convenientfor the customer. There are fees to beearned and customers' deposit money tobe lent on mortgages and equity creditlines. The lender earns money by lendingat a higher rate of interest than it pays onchecking and savings account deposits.

you completely understood. Frankly, it'sdifficult. Youalmost have to be a lawyer, anactuary and an economist!Thedifficulty ofanalyzing and comparing loans and loanterms is something most of us don't relish,so we relinquish this chore to the personhelping us obtain the loan.

Changing the MortgageInterest Payment Paradigm

Until the last decade or so mostmortgages were fixed-term 3D-year

mortgages requiringpayment of principaland interest until paidoff. Most primarymortgages are securedwith a first trust deed.The money is lent to thehomebuyer to buy theproperty. Repaymentsthen occur at anagreed-upon rate overan agreed-upon timeperiod. The simplestfor our illustration isa fixed 3D-year loanrequiring repayment ofprincipal and interest.

TRADITIONALBANK/CLIENTRELATIONSHIP- SEPARATESYSTEMS

Banks borrow money from checking accounts. with little or no interest, then lend U1ismoney to

clients at higher interest rates, making money on the spread..Assumes majOfity01account IIokleti have positivecheckingaccount baLaI'lCfl. Over recent

years many of thesepayment structureswere modified to

include adjustable interest rates withshorter (or longer) terms, optional interest-only, or principal and interest paymentplans. The reality remained: they allrequired full payment in exchange foroutright ownership of the mortgagedproperty.

Figure 1:BankSand lendersoffer many consumerproductsandaccounts.Inmostcases they are all separatesystems.Theonly consolidated viewa customerpossiblygels isa monthly statement.The opportunityeKiststo makethesesystemsworktogetherbettertobenefitthecustomer.

A Non-Traditional RelationshipMortgage payment acceleration

assumes that the account holder will takemore control of their relationship withtheir financial institution. After all, theyare the customer.

It is a simple matter of the customerunderstanding the different classes ofaccount and managing the balances, sothat the customer and the institutionmutually benefit. This simple principle,backed with a revolutionary software tooland a little self-awareness and discipline,can potentially save the homeownerand account holder tens, if not hundredsof thousands of dollars of unnecessaryinterest payments and cut off years fromtheir traditional mortgage payment term.

No one takes care of your interestsbetter than you. Self-interestisa compellingargument, especially when deciding ona mortgage acceleration strategy that canpotentially save thousands of dollars.

There is a high probability that whenyou were sold a mortgage, the details ofthe loan were not explained to the extentyou would have liked or in language

Fixing Past and Present, whileSecuring Your Future

It is never too late to unwind the past,fix these past mortgage decisions, andbenefit from market changes.

A new class of financial company hasarisen to help consumers understand andmanage their mortgages better.

These financial companies providetools and advice promising to manageyour mortgage so you pay as little interestas possible to own your home faster, freeand clearof a mortgage. Alternatively thesesame tools canbe used to help a homeownermanage their equity to build asset valueand personal wealth through real estateand other types of wise investment.


Deposits t A Monthly Monthly *Payments Payments

.- One-timeRealEstate

VDemand

Payments Funding Funding

- What is in it for you?HOW AND WHY THESESTRATEGIES WORK

Mortgage acceleration is a personalfinancial technique that compresses thetime it takes to payoff a mortgage andreduces the total amount of interest paid.Here's how it works.

There are three ways to payoff amortgage faster. They are:

1. Sell the home and immediately payoff the mortgage.

2. Make more payments over a shorterperiod to reduce the principal faster andpay less interest. This is widely known asthe bi-weekly mortgage payment plan.

3. Merge otherwise separate accountsinto an integrated strategy so the accountholder uses available cash to pay downbalances, earn the best interest available,or pay the least interest due on each ofthese otherwise separate accounts, thuspaying off primary mortgages faster. Thisis known as a hybrid or combined accountstrategy.

United First FinancialTMdevelopedand implemented this system in the U.S.

PROPOSED METHODS TOPAY OFF YOUR MORTGAGEFASTER

1. Sell Your Home!This makes an assumption: you do not

need a place to live or you wish to becomea renter!

Despite arguments that paying rentis a great way to accumulate cash bysaving the difference between a mortgagepayment and a lower rent payment, thereality is it seldom happens as planned.While renters delay buying a home,homes prices (nearly always) continue torise as populations grow and desirableneighborhoods become less attainable.

Why Own a Home?Personal residences have proven

to be an easy way to accumulate assets.Wall Street's argument that stocks andbonds outperform personal real estate isnot supported by the facts, though theyproduce compelling charts and graphs toshow otherwise.

They do this by comparing the capitalcosts of buying a stock portfolio or a house.The glaring omission is that most homesare bought with 10 percent down and agenerous 90 percent mortgage; meaningthe homeowner benefits from 100percentof the home appreciation, not just the valueof their deposit.


.

Wall Street never states that theycompete with personal real estate for yoursavings and capital. Consider this: As ofDecember 31, 2006, the average home inAverageville, USA has not seen a year ofnegative appreciation since 1929! (2007may be an exception with a negative 1.4percent after a period of five years whenhomes nearly doubled in price.)

When you include the powers ofmortgage leverage, tax advantages, andpeace of mind in owning a nice home ina good neighborhood with a decent schooldistrict, Wall Street cannot compete.Chances are your home financiallyoutperformed the best stock pickersor fund managers Wall Street offers.What better place is there to invest yourmoney?

Financial Effect: An earlypayment of the mortgage through salesand settlement ends the commitment tothe lender and settles the loan. There maybe a penalty for prepayment during theearly years of the loan.

Not owning a home means the renterdenies themselves appreciation, taxbenefits and potential increase in a home'svalue.

2. Refinance at a LowerInterest Rate

Mortgage lenders recommend thisstrategy to generate more business andfees.

Financial Effect: Most refinancestend to shuffle or reschedule paymentsso that the monthly obligation may belowered by simply changing the time torepay or loading greater payments laterin the mortgage period. No fee financingis an illusion; those costs must be paid atorigination or later in higher interest ratesand servicing fees.

3. Make Extra Principal PaymentsThe next strategy depends on adding

to principal payments in an effort toreduce the amount owed, but making anextra payment to principal may not dentmonthly payments. This nominal effectof extra principal payments is clearlydemonstrated in a simple extra paymentplan versus a truly managed mortgageaccount.

4. Make a Mortgage PaymentEvery Two Weeks!

This is touted as the simplest way toaccelerate mortgage payoffs. This systemdoes shorten the mortgage timeframe, butnot for the reasons vendors promote.

Making a mortgage payment everytwo weeks (erroneously called bi-weekly,meaning twice a week) means over a yearof 52 weeks, the account holder makes26.5 payments or the equivalent of 13.5monthly payments. The advantage is thatthe addition to principal payments bringsthe payoff forward, but not by a materialamount when compared to other methods.See Figure 2.

The account holder must have moneyavailable to put into a closed-end mortgage.Once the home purchase is funded, thebank typically offers no further creditthrough this loan. It also means thatany payments (normal principal or extraprincipal payments) made to the bank, bythe account holder, remain with the bank,period.

There are a number of small entitiesthat promote 26 annual payments as amethod of paying off a mortgage early.

Process: Assume a homeowner ispaying $1,000 a month in mortgagepayments ($12,000a year). If they decideto pay half of this amount ($500) every

THIRTEENMONTHSINA YEAR?

TotalMonthsin aYear= 12

P . P P P P P P P P P P P

JAN FEB .MARAPR MAY JUN JULYAUG SEP OCT NOV DEC

Bi-weeklyPaymentsTotal= 26x 1/2= 13+

P P P P P P P P P P P P P P P P P P P P P P P P P Pp=payment

Figure2: Bi-weeklysystemswork ontheassumptionthereare 13.5monthsperyear! Payingeverytwo weeksyields26 to 27 paymentsa year.Thereis nomagicto payingmore,providedyour lendercan creditprincipalproperly.

March- April2008.PersonalRealEstateInvestorm

two weeks, they will pay $13,250per year.This simple truth is that anyone can decideto pay more per month to pay down themortgage.

Another fact is that most mortgageloan software and systems in lendinginstitutions are relatively inflexible andwere not designed to anticipate bi-weeklypayments to a first trust deed mortgage;they only calculate interest owed once amonth.

Because of system inflexibility thereis also a tendency for mortgage paymentsystems to mistakenly place principaloverpayments in tax escrow accountsand thereby not achieve the objective ofreducing the principal and subsequentinterest. An annual after-the-fact audit

and any adjustments are necessary tokeep these accounts straight. Overlook anerroneous posting and any positive paydown effect is missed.

Most providers of these two weeklyschemes charge a fee for setting up theseaccounts. In fact, the account holder can doit just as easily at no charge.

Financial Effect: There is no

argument that a bi-weekly system paysdown a mortgage more quickly. SeeFigure 3.

Figure4: Comparethenumbers.Thisbi-weeklysystemsavesthecustomersixyears,and16%of theirmortgagepayments.It missesoutontheaccelerationadvantagesofcompoundinterestandanyotherbenefitsforafullyinformedcustomer.

of $80,000(U.s. equivalent) or more wouldbe better off using a mortgage accelerationpayment strategy.

Hybrid bank accounts have beenwidely used in Australia, New Zealandand Britain for more than 20 years.

In 1997, Virgin Financial (RichardBranson of Virgin Records, Virgin Atlanticetc., fame) joined with The Royal Bank ofScotland to promote a mortgage interestoffsetaccount calledVirginOne or a Current

Account Mortgage (CAM).This allows customersto consolidate mortgagebalances, traditionalcurrent accounts (checking),personal loans (homeequitylines), and saving accountsinto one account. Thisrequires refinancing thehome and finding a lenderwith sophisticated softwareto integrate and managethe account balances to thebenefit of the homeownermortgage,

These systems carrynames like current accountmortgages,hybrid accounts,mortgage paymentacceleration or the MoneyMerge Account™ system.

They all approach the opportunity indifferent ways qnd for the primary benefitof a differing entity.

BI-WEEKLYPAYMENTSSHORTENTHE MORTGAGEBYABOUT 16%

$400,000.00

$350,000.00

S300,OOO~OO I

5250,000.00

S2OO,OOO.00 I

5150,000.00

S1oo,ooo.00"I

$50,000.00

$0.00

81raditionaiMortgage8 Bi-weeklyProgram

Figure 3: Compare !he numbeB.Thisbi.weeIdy system saves !he customer six years and 16% (litheii' mor1gagepayments. n miSSeSouton !he ax:elefalionadvaItages of compoood Interest and any other benefits lor a IUIy iltormed costomef.

Financially it looks like Figure 4.In this best case scenario, it has saved

six years and $105,748 in interest on a3D-year mortgage.

5. Mortgage Payment AccelerationAccount

There is no doubt that mortgagepayment acceleration plans are sound. In1999,David Goldreich of the prestigiousLondon Business School validatedresearch that proved that 80percent of U.K.mortgages offered by banks with balances

fiJ March -April 2008 . Personal Real Estate Investor

The Customer CountsThe question in any of these account

processes is: Who benefits first?PersonalReal Estate Investor Magazine

has reviewed many of these programs andconcluded that the ideal system is UnitedFirst FinanciaFM'sMoney Merge Accountsystem.

Our criteria required a focuS'on thecustomer, and not require refinancingan existing mortgage, The benefit tothe financial institution to a system likethe Money Merge Account system isbeing able to offer increased customerconvenience and therefore achieve higherclient retention. Any system must deliverincreased customer convenience, savingsto the account holder and the financialinstitution, mutual loyalty, and betteraggregate loan payment performance forthe lender.

This last benefit makes any lender lookbetter in the eyes offinancialregulators and,as a result, the lender has more freedomand reserves to originate new loans. Thisincreased convenience ties a customereven more closely to a financial servicesprovider.

WHO IS SELLING MORTGAGEPAYMENT ACCELERATION?

A current account mortgage or MoneyMerge Account system should simplify ahomeowner's life. Some hybrid accountofferings are not as customer-oriented. Itis relatively easy to determine the productmission by who is promoting the product.

A loan broker who wants the customerto take a new loan may offer a mortgageacceleration strategy as a competitiveadvantage. It may be an additional serviceoffered to an existing customer, or acustomertoolto help simplify and managemortgage finances.

A PAYMENT ACCELERATIONOR MONEY MERGE ACCOUNTSYSTEM. HOW IT WORKS

The principle is simple. Place money inthe accounts where it has the most effectonearning more or paying less interest. Thegoal is to use the differential to pay downaccounts that incur higher interest. Thisis using the power of compound interestto reduce balances and have your moneywork harder.

Most mortgage borrowers have incomein a checking or current account for varyingamounts of time. It makes sense to usethis otherwise idle money in conjunctionwith a credit line to reduce mortgage debtand the interest payments. Because of theinterest reduction offset, mortgage lenderscalculate interest daily so that every dollaron deposit works harder to reduce the costof borrowing. It is smarter to pay downa higher interest mortgage or equity linewith money that earns no or low interestsuch as a checking or savings account.


TRADITIONAL MORTGAGE versus

;.,,TRADITIONALMORTGAGE BI-WEEKLYSYSTEM

Year Balance Balance

1 $355,976 $353,6222 $351,683 $346,8173 $347,102 $339,5554 $342,215 $331,8055 $337,000 $323,53710 $305,195 $273,09115 $261,214 $203,30020 $200,398 $106,74825 $116,299 $026 $95,954 $027 $74,246 $028 $51,085 $029 $26,373 $030 $0 $0

MECHANICS OF THE MONEYMERGE ACCOUNTTM SYSTEM

Studies show that using a hybridaccount strategy can potentially reducea traditional fixed-rate mortgage by one-third to one-half the time with little tono change to your lifestyle or refinancingof your existing mortgage. Goldreich ofThe London Business School confirmsaccount holders are advantaged by thesestrategies.

Simplycompare a traditional mortgagerepayment with the Money MergeAccount system as offered by United FirstFinancialTM.A fully amortized 30-year,$136,000 mortgage at 5.25 percent, paidthrough conventional monthly paymentsresults in a total repayment of $270,784- nearly twice the cost of the home. TheMoney Merge Account system can helprepay the same mortgage in 11.3years witha total repayment of $181,217yielding asavings of $89,566.

This uses the homeowner's sameincome,same mortgage, at the same interestrate, with little or no change to their currentstandard of living. The change occurs bymaking all deposits into a dynamic creditline based on a standard home equityline of credit from your existing bank orlender.

MONEY MERGE ACCOUNTSYSTEM BUILDING BLOCKS

The Money Merge Account systemconsists of three major components:

1. Existing Primary Principal andInterest mortgageThe existing mortgage on your homeis the foundation for a Money MergeAccount™system.

2. Advanced Line of Credit(ALOC)This home equity line of credit mustoperate similarly to a primary checkingaccount and have an open-end interestcalculation rather than the closed-endinterest calculation of a traditionalmortgage.

3. Client account analysis andinsight

via Web-basedsoftware that allowsthe homeowner to manage allocation ofthe money in the credit line that generatesan interest cancellation or offset on theprimary mortgage. See Figure 5.

TIME IS MONEY. BOTHBELONG TO THE CUSTOMER

The United First Financial onlineMoney Merge Account system makesvirtual connection between your accounts,


including the advanced line of credit, andyour primary mortgage. All income ispaid into the credit line which acts like achecking account.

Each time income goes into the creditline, it also reduces the mortgage balance.As the mortgage balance is reduced, thelower balance accrues lower interest. Bydecreasing thebalance on whichinterest accrues,theproportion of themonthly paymentcredited towardthe principal paydown goes up.A program likethe Money MergeAccount system isdesigned to makesure the accountholder gets thehighest interestsavings possible inthe least amount oftime.

Personalexpenses are paidout of the equityline in a similarmanner to anordinary checkingaccount. Thehomeowner mayalso elect to earnadditional time byplacing as manyof their recurringexpenses aspossible on a creditcard and pay thisoff once a month.The payment isdeferred for up tothirty days so thelower equity linebalance incurs lessinterest.

This allworks on themagic of open-end interest. Thepreferred interestcombination isworking for thehomeowner topay down theirmortgages andloans and fortheir financialinstitution byhaving high qualityborrowers withcurrent payments.

The ability to map and understand thesedynamic account relationships is onlypossible with Money Merge Accountsystem from United First Financial.See Figure 6.

TIME IS MONEY - BOTH SHOULD BELONG TOTHE CUSTOMER

/"~ .

&~*~Fi~tMortgage\.PaidDown

ADVANCEDLINEOFCREDIT

~."~.:YBiIIS&~ Expenses

,.

figure 5:At the heartof thissystemIsyourrelatiOllshipwith yourbankor lender.TheMoneyMergeAccountsystemis yourfinancialintertaceInmanagingthis relationshipwith a centralizedview,controlandanalysis."WhatnoIsa powerfulfeatureof the MoneyMergeAccountsystemthatallowsthe clientto testvariousdebtandpaymentscenartos,suchaswhatIsthe Immediateandlong-termeffectof1I1atnextpurchase?TheMOIleyMergeAccountsystemallowsyouto find1I1eanswer.

UNITEDFIRSTFINANCIALMONEYMERGEACCOUNTSYSTEM

Accountholdermanagesanddirectsincomeandexpensesthroughtheuniversalaccountmanagementinterfacemadepossiblebythe MoneyMergeAccountsystem.

Customeraccessessystemvia Internet

~ ~

Incomes&

~CheCkS Monthly

Deposits Charges

Monthly.!

One-time Mortgage~ ~~ Monthly

~Payments~ .'" 6' ~Payments '..RealEstateFunding I

C BalanceJ :IIII

Mortgage1stTrustDeed

Eliminatesyears'worthof mortgageinterestnormally

chargedat 5%to 6%

HomeEquityLineofCreditw/CheckWriting

OptionalCred~Cardfor MonthlyExpenses

Incomecompressesbalancewhere

normalInterestratesare 7% to9%

Figure 6: United Arst Rnanclal offers a customer.fliendly consolidated management solution to the complexity of more than one bank

account and loan. The Money Merge Account system gives the user an integrated view of their accounts at any bank or lender.

The Money Merge Account system user can manage their entire financial picture and direct money to where it has the most effect and paysdown debt faster.

March-April 2008 . Personal Real Estate Investor Ifill

Making Mortgage Acceleration Strategies Work for YouIf paying off your mortgage years

earlier seems attractive, how do you makethis work for you?

YOUR ALTERNATIVES TO EARLYMORTGAGE REPAYMENT1. Sell Your HomePros:1. If you no longer want the hassles ofowning a home, and "moving in withMom" or renting make more sense,congratulations, selling your home andpaying off your mortgage makes sense.2. If you bought and financed well, youmay earn a profit.Cons:1. Residential real estate has a historicappreciation rate of 5percent. Youwill losethis advantage.2. The interest and fees on a home loan aredeductible against gross income. You willlose this advantage.3. No pride of ownership.4.Paying less rent and saving the differencefor a down payment or retirement generallyproves illusory.

2. Refinance at a LowerInterest RatePros:1.Reducing the interest rate by a point haslittleeffecton the timeor amountpaid.Cons:1. There may be extra fees to refinance.There may be a prepayment penalty.

3. Pay Your MortgageEvery Two WeeksPros:1. Reduces the duration of the mortgageand saves the homeowner some money.Cons:1. Promoters claim that paying someprincipal earlier each month reduces thebalance in the middle and the end of themonth. This only works if the mortgagesystem calculates interest on a daily basis.Mostdo not.2.Savings are miniscule. Paying $600(halfof a $1,200 monthly payment) every twoweeks means saving interest on $600 ofcapitalfor approximately 26 weeks a year.At 6.5 percent (calculated on the dailyclosing balance), this would save $19.76in the first year. Over 30 years, the totalsavingcomes to around $986,or less thanonemonth's mortgage payment.3. With the bi-weekly system, you arepayingan additional payment each year,whichis not an aggressive strategy.

flI March -April 2008 . Personal Real Estate Investor

I

4. Use a True Mortgage RepaymentAcceleration PlanPros:1. These programs use the magic of open-end interest in favorof the homeowner/account holder versus the lender.2. These programs have been successfulin Australia, New Zealand and the U.K.for more than 20 years. They're just beingrecognized in the U.S.3.A homeowner can potentially payoff themortgage 12to 18years faster.4. A homeowner can potentially savebetween $100,000and $150,000on a 30-yearprincipalandinterest loan of $200,000.Cons:1.This approach works best for thoughtfulhomeowners who really want to savemoney.2. Using the program to its greatestadvantage requires understanding thesystemand workingwith a coachfromtheprogram provider.3.The program needs to be flexibleenoughto accommodate changes in lifestyleand financial conditions. The programprovider needs to advise and assist withthese adjustments.4. Not all systems are created equally. Tobe effective it needs high quality software,local representation and distribution, andongoing access to coaching support.

FRONT AND CENTER -LIFE HAPPENS IN STAGES

Everything we have discussedassumes a life moves in a straight linewith no major life changes: no raises, nonew expenses,where cars andhouses lastforever and there are no marriages, birthsor deaths!

This is not reality. Change happens,crises erupt, and opportunities occur everyday.

The typical life stages we go throughrelate to being single and working,becoming a couple, building a family,becoming a first-time homeowner or amove up home buyer. All this occurs whilewe may earn a predictable salary, salaryand commission, or are self-employed withirregular incomes. Then there are emptynesters.

The Money MergeAccount™system,or any equivalent, must adapt to theclient's life stages and accommodate therealities of income, expense, and payingthe mortgage.

The success of this Money MergeAccount system is dependent on twothings:

1. The client buys into the program withrealistic expectations.2. The client takes advantage of thecoaching that will support his financialdecisions and use of the Money MergeAccount system software.

PAYING THE FUTURE FORWARDa. Paying off the mortgage early

This is the compelling reason for usingthe United First FinancialTMMoney MergeAccount system to repay: saving significantinterest by reducing the term of the loan bypotentially one-third to one-half the time.The Money Merge Account system uses thehomeowner's line of credit to reduce thebalance owing on the primary mortgage.

The secret, according to CEO P.Thomas Chester, is repositioning regularincome that is effectively idle moneywhen it sits in a regular checking and/orsavings account. The repositioning occurswhen income is applied in a lump sum tothe balance owing on your line of credit.This keeps the credit line balance as low aspossibleand significantlyreducesinterestcharges on that line of credit.

This means that more money goestoward paying the principal balance eachmonth and the mortgage is paid yearsahead of a standard mortgage schedule.

The online Money Merge Accountsoftware and customer service providescrucial guidance in optimizing this incomeallocation to get the best interest pay downeffect.

b. Reduce other debts and monthlyrepayments

The Money Merge Account systemconsolidates other debts (e.g., credit cardbalances, personal loans, overdrafts, etc.)that are transferred to the line of creditestablished with the system. Becauseof thelower interest paid with the line of credit,clients are able to payoff debts and theirmortgage faster.

The Money Merge Account systemallows a homeowner to break each debtinto individual repayment plans with aplan for the mortgage, credit card balance,and home equity loan. Managing budgetsand tacking payoffs is a breeze.

Unspent money that homeownerswould normally leave idle in checkingand/or savings account is now working24 hours a day with little to no changein the Money Merge Account client'slifestyle. Expenses are paid through theline of credit.All activityand expenditureanalysis are reported by the Money MergeAccount system.


LIFE GOES ON

The Money Merge Account™ systemgoes beyond an interest management toolthat helps find the most cost-effectivestrategy for finanCial decisions. The lineof credit established with the MoneyMerge Account system typically includesa checkbook, debit card, telephone, andInternet access; you can draw on yourmoney whenever you like.

1. What is the best way to fund amajor expenditure?

Paying for your child's education, orbuying a new car, holiday home, or boatcan be funded in a number of ways.a. Pay a lump sum?

A typical mortgage is a one-waytransaction. Your mortgage payment goesinto an account that can only be accessedby a complete refinance. The MoneyMerge Account system allows you to payupfront while using your discretionaryincome to pay your balance over time.

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b.Borrow at a mortgage-stylerate?

Most people borrow money to makea major purchase. The Money MergeAccount system shows clients how use alow morgage-style interest rate by settingup a lump sum transaction or a monthlypayment plan.c. What is the best way to buya second home or investmentproperty?

The loan managed by the MoneyMerge Account system is secured againstyour home. Clients may spend up to 100percent of the property value. The MoneyMerge Account system lets you managethis equity to buy a second property, byborrowing at a very low mortgage-styleinterest rate while retaining the flexibilityto pay back as quickly or as slowly as youlike.

2. How does a short-term illness,unemployment, maternity orpaternity leave, or job transferaffect a Money Merge Accountsystem plan?

The Money Merge Account systemcan quickly repay the mortgage when anclient's income is interrupted. The MoneyMerge Account system uses the buildupof home equity to pay for the daily ormonthly costs until income returns. The


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Money Merge Account system can helpadjust budgets, analyze where money isgoing, plan spending for the month, workout what you'll have left over, as well asset longer term plans for repaying yourloans.

3. Unexpected income, such asan inheritance or bonus

The Money Merge Account systemis a great way to help you manage lumpsums as you transfer them into the equityline and reduce the total loan balance.

4. How to fund homeimprovements

The most cost-efficient way to fund ahome extension or renovation is using theequity in your home. Because the MoneyMerge Account system can use a homeequity line of credit secured by the equityin your home, you can potentially haveaccess to up to 100 percent of the equity.

5. Managing irregular Incomea. Commission-based or otherirregular income

The Money Merge Account systemallows clients to manage finances inline with cash flow. When there is more

income, the Money Merge Accountsystem allows the successful commissionearner to reposition more and savemore interest. With less income, TheMoney Merge Account system canhelp with a reverse strategy that freesthe commission or bonus earner from

the usual low annual income and highsporadic commission or bonus cycle.Money is available to smooth out theseincome hills and valleys and meetrecurring expenses. Deposited lump sumcommission income saves interest while

paying down the equity line loan balanceuntil it is needed.b. Self-employed

Self-employed clients need bettertools to manage money. The MoneyMerge Account system helps savethousands by paying less interest onloans.

The Money Merge Account systemhelps manage payments in line withcash flow without penalties or charges.Each month the client can decide how

much to pay more or less, as long as theminimum monthly loan payments are met.

Self-employed clients also have accessto online and telephone support staff whocan point out flexible options to addressthe challenges posed by income that varieseach month..

EXPERTS AGREE

Dolf de Roos, Ph.D., Engineering,Canterbury (University of NewZealand)1974,is the author of NewYork TimesBest Seller "RealEstateRiches," which has sold morethan 800,000 copies worldwide.It has been translated into manylanguages,and hasbeena bestsellerin five countries. Dr. de Roos is aninternationally acclaimed investor,author andeducator,who hastaughtin morethan20countries.Dr.deRoosfocuses on real estate investingandthe psychologyof creating personalwealth and well.being. Dr. de Rooshas done hundreds of real estatetransactionsandis well-positionedtotalk about mortgagesand mortgageacceleration.

David Goldreich, Ph.D., FinancialEconomics, Carnegie MellonUniversity,1997.In 1999,whileat theLondonBusinessSchool,Dr.Goldreichvalidatedresearchthatprovedthat 80percentof U.K.mortgageloanswithbalancesof $80,000(U.S.equivalent)or more would be better off usinga mortgage acceleration paymentstrategy.

Thesetwo internationalexpertsagreethatthe neteffectofflexiblemortgagepayment acceleration plans, likethose offered in the U.S.by UnitedFirst Financial™and in the U.K. byVirgin Financialwith the RoyalBankof Scotland,candramaticallyreducethe lengthof time that it takesto payoff a mortgage.

Editors Note: Personal Real Estate

Investor Magazine has gatheredthe facts and done the homework

necessary to help readers find theresources to help decide if thisprogram is appropriate for theircircumstance. Please do your ownanalysis to determine if the MoneyMerge Account system will workfor you.

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March - April 2008 . PersonalRealEstateInvestor .

un-mortgaging americaimages.kw.com/docs/1/6/3/163785/1214933884349...mortgage defaults were higher...

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