You obviously have no idea how this program works. I've been on the mortgage checking account system for over 6 months now and it's working even better than what I thought it would. You seem to think you're so smart. I graduated in finances and I thought I knew it all until I saw this. Get your facts straight before you say stuff you don't know. By the way, the cost of the program is a one time fee of $3500. It's well worth the lifetime of financial consultation and mortgage payoff of 8 years. I'm saving over $200K on my mortgage. Do you know someone who offers something so easy to do, and gives you such a great payoff for a cheaper price?

So where was I wrong? How much money are you really saving compared to just paying extra on your mortgage every month?

In the example above I show that the savings are only $13 per month. Why would I spend $3500 to save perhaps $13 a month??

I think it says something about the content of your blog that Google Ads has decided to market these kinds of schemes on your web site.

Thanks for the calculations though, I always appreciate the sharp logic.

I think the concept is great, I am still considering the Sydney Financial program, yet I find it kind of funny that you seem to be sharing your opinions of this concept that seems to be fairly negative but, you have a link to the very same program I speak of as ads by google....overall, they system is a good one! I too have a hard time paying $3,500 for the software too, on the other hand the unlimited savings and investment potential is "priceless." that fee is for more that the program, UNLIMITED support, unlimited updates and future financial advise to maximize perpetual wealth. This is not talked about anywhere that I have found.

I hope my opinion helps someone. After all this is not a "quick-fix" and will not fix stupid, people need to be responsible and take responsibility for there financial future and stop blaming others. This is only another tool to effectively manage ones' financial affairs.

If my comments seemed "fairly negative", I am sorry for the confusion. I wanted to be VERY negative. I think that this is a total scam, and no one should ever give their money to this company.

I have requested that Google remove that company from the ad rotation.

The huge benefit is that this takes full advantage of
every cent of discretionary income and makes it
available to you whenever you need it. It even takes
full advantage of every cent you currently have and
puts it to good use until you need it. Now you say
it'd be almost the same to just send in your
discretionary income to the Mortgage company. OK,
that's a good point, if everyone was to do that then
that statement would be true. The problem is that
even though everyone might say that no one really does
it. I'm willing to say that even though you say that
I bet you don't do it. That's the problem, no one
does it. So, I'd rather pay a good financial company
that's willing to help me out with my financial
situation since they know what they're talking about.
A one time fee of $3500 for a good financial advisor
for practically the rest of my life is well worth it.
They not only help me out with my home but I've also
set up my retirement with them. when I finish paying
off my home (less then 10 years) I'll have almost
$200K waiting for me. I'm not the smartest guy in the
world but I'm not dumb. The point I'm trying to make
is I could probably spend 10 years figuring their
trick out and trying to save a lot of money however I
highly doubt I'll save nearly the same they'll have me
save, and even if I would, it's not worth my time.
Time is Gold, that's why I can't figure out why you
seem to have so much time on your hands to write bad
things against a company you know nothing about. I
mean seriously, how much time did you spend building
that web page, run the numbers and make the
calculations to talk bad about some company. The only
reason I'm even sitting here on my computer writing
you is because I can't sleep and had extra time on my
hands.

Good luck to you Jeremy and I hope you find something
more productive to do with your time.

-Stephen

PS. I don't mean to make this personal or sound like a
jerk in any way. Please excuse me if I did sound like
that in my comment. It just looked too odd to see
someone write something like that when I know it's not
true. Oh yeah, you didn't answer my question. If you
know someone that can get my $300K mortgage paid down
in less than 8 years and still have enough money left
over to put towards a good retirement plan so I can
retire before I'm 40 for less than $3500, let me know,
I'm all ears.

Bad Try Jeremy! I am just wondering what your credentials are? You talk like you've been working in the healthcare field or maybe avionics, but certainly not finance. I love the narrow minded view, it reinforces the need for financial services. If anybody is considering taking financial advice from Jeremy, you might also condsider taking flight lessons from penguins.

Clint & Steven:

You are very spirited in your responses, but you have not pointed out any mistakes in my math.

My #1 point is that this program does not create money out of thin air. If you pay off your house early, it is not because you had a special account, it is because you didn't spend all of your money each month.

There is only one way to pay off your house in 8 years, and that it to spend less than you make.

Steven: Here is the answer to your question. For less than $3500, buy a book on personal finance, get on a budget, and spend less than you make.

Here are my credentials: I have paid off $38637.29 in debt, and saved $10307.61 since Jan 1 2006. My net worth has increased by $50,000 in that same time.

I'm sorry, were you expecting the program to create money out of thing air?

The program is not meant to reduce your mortgage, just the interest. Therefore reducing the time it takes to pay your home off. The $3500 wasn't even a questions for me. It's not like I had $3500 just laying around, it simply got added as a balance to my mortgage, but in the end if I'm going to save almost $200K, I think it's a fair trade on my part. Don't you think?

By the way, If I do take your advice and buy a book on finance, get on a budget and spend less money (to essentially send towards my mortgage) wouldn't that end up costing me more than $3500. Good try! Right now I can continue on the current budget I'm on and still be on track to pay my home off in 8 years. Well worth $3500.

Why would you pay $3500 for software when you can do the same thing without the softwase?

Well FANTASTIC Lori, when you figure it all out and are able to mimic what the company can do, please drop everyone a line and share the little secret so we all can avoid this outrageous bill of $3500...thats sarcasm at its best, Lori, obviously, for $3500, there MUST be a little more to it than what you think. but seriously, good luck in finding your own way...ahhh, my generation, we all think we are Joe-DoItYourSelfers...

I am considering starting this program this week. I have been reading as much as possible on this program, and that is what led me to this comment chain. Here is my assessment. True. You can pay off your mortgage ahead of schedule on your own. There are many ways to do that. The difference is that this program appears to give you a strict guidelines, exact amounts and exact dates to make your payments, without sacrificing your financial security. I have in the past paid an extra $1000 for several months, trying to get ahead. But when unexpected bills came up I had to both, stop paying extra and watch my credit cards grow, because I didn't have enough for all the bills. I am hoping that this program will prevent that from ever happening, all while keeping my mortgage payoff as a priority.

Rob:

Ok, so assume that you follow this program, and then another unexpected bill comes up. What will you do? In the past you would stop paying extra on your mortgage and increase credit card debt. So on this program you will instead just cover the new expense on the home equity loan? Is that any different at all?

Here is my advice (and what I really do follow by the way): Instead of putting an extra $1000 on your mortgage for the next 12 months, put it into a high yield savings account and do not touch it except for real emergencies. Then when the unexpected comes up, you can cover it without missing a beat. Sure you have delayed paying off your house by 1 year, but you won't fall off the wagon and lose traction ever again. I believe that the net result will put you ahead.

Rob, what Jeremy advised is not bad, however, what the MCA program offers is so much more. He mentioned setting aside money into a savings account. With the MCA program you can put that extra money straight towards your mortgage, have it working for you saving you interest while you're not using your money yet you have complete access to it when those unexpected emergencies come. That's what truly will help you out best. Most savings accounts will never earn you nearly as much money as what you will save by keeping it in your higher interest mortgage. I'm telling you this because it's what I'm doing, it works Great! worth every penny to have a financial company helping me out with my finances. Remember your mortgage is an amortized interest unlike a savings account.

As far as doing this program on your own, it's not as easy as it looks, that's all I'm gonna say.

It just sounds like somebody trying to sell you common sense for $3500. Don't forget that its not bad to have a low rate line of credit for when you need it, but always have some money in the bank (6months of bills), for the average guy thats 12K that earns interest. You can do online at 4.5% savings at hsbc.com. And dont forget an extra 100 month towardss principal avergages close to saving u 5 years on a 30yr loan.

If it really sounds like common sense why doesn't everyone do it? I'm doing it and in fact it's not as easy as it seems. The money didn't come out of my pocket, it came out of my mortgage. So I didn't even feel it, and I'm going to save over $100K in the end so I guess it paid for itself.

BEWARE!! I gave them $500 to start talking to them about the program. After I really started looking at my financial situation and saw that I am actually spending more than I make every month - I realized that this program would not work for me. However, they will not give me my $500 deposit back.

WOW- this is why I always use my own judgement when reading OPINIONS on the internet. Your numbers don't prove that Mortgage Checking Accounts don't work, you don't run them out long enough to prove or disprove them. When I first looked into this system, BTW- there is more than one company out there offering this service, Sydney Financial happens to have the most complete service and that is why I chose them, I had 2 CPAs review and run HARD numbers, my numbers using the system and both of them said that my first year savings would be 5-7K. I asked them if I could do this myself and they said ABSOLUTELY- it can be done. But each of them said that even as CPAs they were going to use the software because the time it takes to calculate this monthly and to make sure it is accurate is not worth the time. I was told that even one month of being off on the calculation would cost more than the software.
Here is another consideration- If this is a scam then why would a news team in Nevada investigate and RECOMEND it? Please see www.mortgagecheckingaccount.com This is a independant review and does not endorse a company, but the concept. This system is been used in other countries for over 20 years now, do some research you will see that the only people that should be afraid of this concept are the banks and lenders, who we all know have been killing it for over 50 years now. So I have to ask, have you had your numbers run by an expert at Sydney? If not, why ? You may be surprise to find that your opinion changes when you see your own personal case in black and white, not static.
If you are interested you can email my agent at dnelson@sydneyfg.com
Also the MCA is the BEGINGING of the services you get with Sydney, you also get seminars,on going financial planner, retirement advice and a financial forecast software that allows you to make educated choices on future purchases. There is on going support and education and I truly feel that the money spent is worth the value and peace of mind it gives.
Thanks,
Mel

I don't get this program. I understand the competitors who want to convert your mortgage to an equity line (at higher rates)and use excess cash flow but Sydney want you to take out a separate mortage (equity line). How did more debt pay down my mortgage? Why do I want to use credit cards for my monthly expenses and pay them at the last possible date? That float will only work the first month and the credit cards will start charging you more interest.
And who wants to pay off a mortgage anyway? Has anyone read Missed Fortune 101 by Douglas Andrew?

I can say with 100% certainty that this program is NOT a scam and if you use the software provided and follow a budget that you set for yourself the program will do exactly what it says.

There are several versions of a Mortgage Checking Account that have recently been introduced. A majority of them set up in 1st lien position-meaning you have to refinance your 1st mortgage into a 1st lien HELOC (which is an adjustable rate) and I'm not a fan of this one...

However, there are other companies, such as Sydney Financial Group, that offer the same results with a HELOC. This means you would not have to touch your 1st mortgage and you will simply make scheduled overpayments of principal towards your 1st FROM your new HELOC.

I actually just joined up with Sydney Financial Group to sell this system myself and have had a tremendous response thus far. If you in fact own a home I encourage you to look into it more.

To the original poster of this tremendously intelligent post....do a little homework and learn about finance before posting garbage like you have here.

To the rest of you....don't listen to people like this. This system is in fact the powerful strategy to hit the US ... EVER. I'm paying my house off in 6 years and saving over $355k in interest by doing so. This is not a scam....it's actually the best deal of the century!

$3500 to save over $350,000...fine, not a tough decision. As far as coming up with the $3500 is concerned....just put it on a credit card that get's paid off at the closing of the deal. Or pay for it with the HELOC your about to get if you don't already have one. Simple fact is - you don't need $3500 cash to do this....just call them and they'll find a way=there is ALWAYS a way!

Who should people trust? A salesman for the product, or someone who has no stake in the product, and has published the figures in an open manner.

I am sure that Sydney finacial does what they claim to do, I just think that it is worth about 13 cents, not $3500.

Secondly, I believe that this scheme (and all other products like it) are inherently dangerous, since you could easily go further and further into debt and not even realize it. If you are overspending now, you will still be overspending with this product. But at least now you have a big fat zero in your checkbook to tell you to stop spending money. With the "mortgage checking" you can keep spending money all the way to the appraised value of your home, and not even realize it!

And before you say "But you need to keep better track of your spending", I agree, but if you can keep track of your own spending, then you could do exactly what this mortgage checking program does yourself without going deeper into debt in the process and without spending $3500 for the privilege.

#1 Before purchasing this program, make sure you are spending less than you are making - it's the only way it works. Because, Jeremy, you are correct - it does present the possibility of spending getting WAY out of control. But the awesome thing about this software is that it shows you, just by plugging the $$ amount of the choices you're considering (new car? vacation?) exactly what ANY kind of spending will do to your mortgage or whatever loan you're trying to pay off (yep - works for more than just mortgages)so you can make an informed choice about whether you REALLY want to spend it or not. Essentially, it's an instant picture of future results & consequences - it shows the effects choices you're considering will have on your future by just plugging the $$ amount of those choices into the software causing people to think twice about spending their money so freely.

It's a scam.

http://www.theage.com.au/news/property/smoke-and-mirrors/2004/09/28/1096137225560.html

It's a scam part II

http://www.boston.com/business/personalfinance/articles/2007/10/28/line_of_credit_mortgage_creates_an_illusion/

I just wanted to respond to the one post about why anyone would want to pay off a mortgage anyway. I don't care what tax (or any other) benefits there are in having a mortgage, give me a debt-free home any day.

Jeremy,

I appreciate you tackling this Line of Credit approach. The above articles were fairly eye opening. I would never get involved (too conservative) but have a friend who was talked into (by a "financial advisor) cashing in kids college fund accounts and a cash value life insurance policy to put into mutual funds. Maybe it's the right thing to do. For me, I just am too conservative or believe there are few short cuts to proper money management. It seems we can get too cute or tricky sometimes but in many ways the old fashioned way of managing money is right....unless you've got tons of free cash flow maybe.

Here is how it works. I think it's great and want to do it asap. However, you have to be careful what company you do this with. Sydney Financial sounds pretty good, as they don't make you refinance your mortgage.

Here's their spiel: Suppose an individual has a mortgage where they still owe $200,000. In addition, suppose that they receive a $5,000 paycheck at the beginning of each month. A typical person would deposit their paycheck in a checking account that earns 0% or maybe up to 1% interest.

Using Sydney Financial Group's Mortgage Checking Account that combines a mortgage with a checking account, the person would deposit their $5,000 paycheck in against their mortgage dropping the balance to $195,000.

As monthly expense occur, money is paid back out of the account and the balance at the end of the month is near $200,000 again. However, in the meantime, money was saved on the daily calculated interest of the mortgage (more towards the beginning of the month and less toward the end of the month as money was spent).

Over the life of the mortgage, this can save a tens of thousands of dollars in interest and cut years off of your mortgage.

It won't be tens of thousands, but more like tens of tens. See the original post, it might save you as much as $13/month if you can avoid spending yourself into bankruptcy in the meantime.

I personally like the post about taking advice from Jeremy is like taking flight lessons from penguins. With Jim Daytons post regarding the interest charged on the credit card.. I'm not sure if you have a credit card or not but I use one and use it for all my expenses. ALL my expenses and pay it off just a couple days before it's due. I've been doing that for over 2 years now and haven't paid a dime of interest. In fact, I just got back from South America with the free skymiles I got just by using their money. You don't get charged interest if you pay it off COMPLETELY when it's due. After reading what all of you have said I'm by far convinced the Mortgage Checking Account is the way to go. It just makes sense. I wish you all good luck in deciding whether or not this makes sense for you but if you're financially sabby in any way, you'd know this works. Jeremy and KV, when you get on the program and realize for yourself that it's a scam let us know. Until then don't say anything when you don't know what you're talking about, you lose lots of credibility that way.
For those of you who spend more money that you're making, I think you've got bigger problems than worrying about paying your home down quicker. Why would anyone who doesn't make enough to pay the bills look into a program such as this to accelerate your mortgage. That just doesn't make sense! Get into a smaller home! Some people just have no financial common sense anymore!

Jeremy,
You bring up good points and I agree with both sides. I am not sure if $3500 is something that I am ready to pay out. Do you think you could figure out a system that would pay like the sydney financial group and also take advantage of the Mortgage checking account? Does anyone think they can do it? Some people will not want to figure it out and would rather pay out the $3500. It is hard for me to swallow that kind of money. If you figured out the program you could immediatelly apply $3500 to your home mortgage and be that much ahead. Jeremy may be right that this is money not well spent.

To Jeremy -

I'm all for hard numbers on this one. I think what the value (maybe that $13?) is that the excess or discretionary income is put to work lowering the daily calculation of interest.

It might be made more apparent if one was considered to remove, or at least track, the "working money" as if it were to be removed at some point.

That way, it's not just that one is prepaying their mortage with all their discretionary income.

So - maybe one more set of numbers that show how much that lowered interest actually adds up (or doesn't?) over time.

I've only recently come across this concept and have only this evening begun to research it, hoping to find some do-it-yourself way to achieve the results ("just prepay" doesn't count.)

-A

I have just recently looked into this and did use my 3 days grace on a refinance to cancel the refinance because the Mortgage-Checking is the way I am going to go. It is currently used and proven to work!
What company to use and how much they charge for what they do is what I need to decide. It makes sense!!!!
Instead of having a mortgage, a savings, a checking with paycheck and expenses, CD etc... all different places not helping each other, why not have them in the same account working for your largest debt(mortgage)? When your mortgage interest is calculated by the day every month and your mortgage balance has been reduced by all the other positive figures in the one account YOUR INTEREST WILL CONSISTENTLY BE LESS. All month pay your bills by credit card, maybe AMEX. Set up alot of your bills to be paid automatically by your card. One day before the credit card is due and interest applies, pay on-line from your one combined account. In fact, set that charge card to pay automatically, full amount on card, on a certain day every month. Make it around the same day that your paycheck is direct deposited into this same combined account. Yes, all your eggs will be in 1 basket, the 2 bad eggs(mortgage and bills) and all the good (paycheck, savings, all excesses of funds) Take the day you get paid first, as you can't change that. Use that date to coordinate your account.Request what date you want to pay your mortgage, charge card and bills as your debtors will usually let you choose. Once you get it set up. It should flow pretty easily. IT CAN'T FAIL UNLESS YOU CAN'T BUDGET. Software would help. American Banks have so blinded us to have a savings and a checking we can't believe there is another way. Why would they offer a type of loan to us that decreases their profit 30-80% or more or less. Americans want the fastest easiest way and to understand. Since this is harder and too good to be true, people will not catch on quickly. Come on people... think!!!!!

Has anyone been on one of these programs for a year or more? We are moving to a new home and thus getting a new mortgage. It is rather difficult to understand, but the benefit I am told is the amount of "float" in our checking account each month that will lower the amount of our principal. We are retired with no income except for what we draw from an IRA. I figure out the amount of our bills, right a check for them and deposit it in our checking account and mail the bills. In balancing our checking account, I find that we still carry an "average balance" of several thousand dollars. Since I only deposit enough to cover expenses (we charge most everything and pay entirely when the bill comes in), we must have a great amount of float we do not benefit from with our checking account. Does anyone know if this system will really work for us in paying down our mortgage faster? We have been looking at CMG which does have a high interest rate.

Couldn't you keep your orignal fix mortgage and open a line of credit. Apply 20K of the line of credit toward your orignal mortgage. Then have you pay checks deposited to the line of credit. Pay all your bills via the line of credit until it reaches zero. Once it reaches zero move another 20K toward you first mortgage?

I agree with Jeremy. Everyone else is an idiot. The people trying to justifying paying the $3500 are undercover salesman for the Sydney Financial Group trying to get people to buy into their scam. We all know who you are! Idiots! Of course no one has mentioned that you have to pay also fees to obtain mortgage checking account. Also, if you have bad credit, getting a credit card is next to impossible. So, don't mess the guru Jeremy. Or I will have to kick your ass. You are all a bunch of numb skulls!

CMG and the Other Companies do not charge $3500. I have spoken with referrals from CMG who claim it is really working for them. Anyone out there who had to get a new loan anyway that is doing this who can verify the shortening of the mortgage payment period via the "float" on their checking account? What they tell me happens is that on a daily basis money in my checking account is used to decrease my mortgage amount. At the end of the month they compute the interest owed based on the amount owed averaged on a daily basis. If I make my monthly mortgage payment based on the original payment amount as though it were a 30-year amortized loan, then I will be paying principle off at a faster rate because of the value of the "float" in my account. On my monthly statements my "average monthly balance" is quite a lot more than I think I have in the account.

Stephen Galaso [Visitor]
You obviously have no idea how this program works. I've been on the mortgage checking account system for over 6 months now and it's working even better than what I thought it would. You seem to think you're so smart. I graduated in finances

"WHAT DOES, I GRADUATED IN FINANCES MEAN?"

I want to weigh in on this, as I have a different perspective to bring. An MCA may work, but my experience with Sydney Financial was anything but workable. They basically set me up with a mortgage company that set me up with a HELOC that would not work with their system. Then they told be to eat the early termination fees on the HELOC and to go get my own HELOC. Not withstanding that this all cost me lots of time and money, they did not even reply to a letter asking for refund due to such poor business practice. I filed a complaint with the Utah BBB and they did not respond either. You can read about Sydney here http://www.utah.bbb.org/commonreport.html?bid=22170515&language=1&bureau=&bbbid=

Thus, the MCA is only worth as much as the company behind. The math may or may not work out, but if the company does not ethically watch out for your best interests, then the MCA process is doomed to fail.

My brother had refinanced his home on a program that allowed him to pay off his home every two weeks. It only cost him $500. When I refinanced with the same company, they offered the same thing to me, but I declined.

Two years later, that company folded, sold his mortgage to another company and the new mortgage company does not honor two-week payments. My bro is out $500, lucky it wasn't $3500.

Does the Sydney MCA operate in the same way?

I agree with Chris Welch's comment:
"Thus, the MCA is only worth as much as the company behind." And, I agree with Jeremy's article. But I think if this is such a good thing, why don't all the banks, savings & loans, etc. offer the same deal? Why can't I pay it on a daily basis and maybe payoff my 30 year loan in maybe half the time? Now wouldn't that be an awesome program?

bottom line: banks need to make money so they won't give you 20 different payment options and charge you interest according to the length of the payoff time. And, likewise, financial institutions like Sydney need to make money, so they will give you these creative payment options.

I just got done reading all the comments. I am now exhausted. I just remembered a phrase from the movie Tommy Boy, "Opinions are like assholes, everybody's got one". I will try not be an a-hole and just say this: I will crunch real numbers on my own to see if SFG left something out, I will look at a more complex budget to see if Jeremy left something out, I will read up on Ramsey's Baby Steps as Jeremy recommends (thanks for the link) and I will read some other good books and go from there.

So I looked at your numbers and have read what people had to say. You say that SFG is saving 22 bucks. I think that you need to look at it in a different way. According to your numbers you have 3400 dollars in the checking account doing nothing for you while SFG system has it sitting against your debt. Also I don't see how someone could really do your example in real life. The point of the system is to make your money work for you 100% of the time which destroys your method compounded over time. There is no question it's the fastest way to pay off a home and your example shows that. Not only that its the most easy and realistic way to pay off a home the fastest way possible. I have checked into all the methods and there is nothing that can beat this thing unless you make tons of money and use a first position HELOC which would be 1% of the population in the US. Anyone who uses a system like the SFG system is smart and will do great there is no doubt about that. Also people who put money into a high yield savings account earning 5% have to pay taxes on that. All the interest you pay on the HELOC is tax deductible. Anyways there is no way Jeremy that you can say this isn't a smarter way of paying your home off than yours and your numbers prove that.

I'm astounded at how many shills this article brought out... Gosh, I always take financial advise from anonymous posts that contain CAN'T FAIL scripted sales mantra and no real financial figures!!!

There are so many of them taking over the comments, that it started making me think that Jeremy's own post was a plant so that all these visitors could come in and "set him straight".

No one has yet posted the obvious: that if you keep an average of 5k in your checking account for 30 years and that is deducted from your principal every day and therefore lowers your interest, that saves you a whopping $30,000. (That is 5k at 6% compounded daily for the full 30 years)

If that is how much you will leave sitting around in your checking, for the whole 30 years, then that is the max this program will save you. Oh, then subtract the $3500 cost for the "special loan" and you are down to $26500 savings. If instead you keep and average of 10k, or more, just multiply the 30k savings by x factor and there is your bigger corresponding savings. That float saving you 30, or 60 or 90 or 120k in interest over 30 yrs. is a far cry from totally ordinary NOT SALESPERSON Ryan claiming he will save $355k in interest.

Any other savings anyone tries to convince you of is simply from making extra permanent principal payments, just like you can do with a normal loan without having to pay a fee. It is pretty easy to just send an extra 1000, or 2000 each month to your normal loan, that is not "complicated", and will pay your loan off in 10 years, like I did.

I miscalculated and it GREATLY skewed my results. I need to add that, if you didn't do this program, your checking money wouldn't just disappear, so to figure the real advantage of mortgage checking, we need to compare it to how else you would have invested your checking nut for 30 years. If instead of leaving the extra 5 or 10 or 15 or 20K to float in your mortgage checking, you had it at ING or something instead earning 4.5% for the whole 30 years, that would compound up to 19k/38k/57k/76k.

So in the end, this program really only saves you a total of:

11k(-3500 program cost leaves you with 7500 total savings over 30 yrs)

22k(-3500 program cost leaves you with 18500 total savings over 30 yrs)

33k(-3500 program cost leaves you with 29500 total savings over 30 yrs)

44k(-3500 program cost leaves you with 40500 total savings over 30 yrs)

That is your savings compared to just putting your checking money in ING.

Seriously, any additional savings and "years off the loan" come SOLELY FROM MAKING EXTRA PRINCIPAL PAYMENTS just like you can do very easily on your own for no fee.

Oh, wait, maybe I also should have compounded the program costs since the helpful poster above, NOT A SALESMAN Ryan, said it would be easy to just get the 3500 rolled into the loan. So let's see:

3500 compounded daily for 30 yrs. at 6% is 21000 (-the original 3500)= an extra 17500 taken away from the interest savings this program saves for you.

If your float is on the lower end, 5k, it brings you to this mortgage checking program not saving you a dime and instead costing you 10k over a normal mortgage.

If your float is 10k, then this drops your savings to 1000 dollars total savings over 30 years.

If your float is 15k, this drops your savings to 12k total savings over 30 years

If your float is 20k, this drops your savings to 23k total savings over 30 years

Man, we are getting farther and farther away from this thing saving you hundreds of thousands of dollars, aren't we.

Sorry to keep forgetting details, but, you know what they say, devil and whatnot...

Okay, last point. As some articles mention, these line of credit loans will charge you a higher rate than your 30yr fixed, are variable, (gee that hasn't caused any trillion dollar economic crises lately, has it?) and may not be 100% tax deductible. So that is how they make their "savings" look so good, because it is saving you interest at a higher rate because your loan is at a higher rate.

If I redid my calculations above with the higher interest rate on the entire loan, we will definately end up losing a lot of money versus a conventional mortgage.

If I redid it with 80% at a good fixed rate and 20% at the HELOC variable rate, we would still either lose money or come out even, not saving anything.

If I redid it with only 20 or 30k at the higher HELOC rate, we might have a small savings in the end.

Whoa! Dee, you are a wild and crazy comment poster. ;-) I must admit I never suspected that this post would get so many comments. I really didn't expect any comments at all.

I think if you look at the comments, you will notice that all of the people who say this is so great are either: Salespeople for one of the programs, or clients of these programs who want to justify their decision. But notice there is NO comment from anyone that says "I did this xx years ago and now my house is paid off"

I have deleted comments that are clear and obvious advertisements. For example several salespeople have listed their website and/or phone number, and I deleted them. Otherwise all these comments are real and unaltered. And I really really want to be clear in saying that I do NOT support any scheme like Sidney Financial or any other mortgage checking plan.

Please save your money and don't sign up with these companies.

Oh, yeah, I want to apologize to Ryan for sarcastically implying that he was a salesman. When I reread his post I see that he is most definitely a salesman and eager to get his commissions rolling:

"I actually just joined up with Sydney Financial Group to sell this system myself and have had a tremendous response thus far."

"This system is in fact the powerful strategy to hit the US ... EVER."

"This is not a scam....it's actually the best deal of the century!"

Do people actually still fall for scripts like this in this day and age?!!!

Thanks, Jeremy, for starting this thread. Aside from you and three or four other warning articles, the Google search is a little too crowded with Sydney Financial ads and way more "commerce" than facts.

Jeremy is right. If you sit down with pen and paper and do the calculations yourself, you'll see that it is a rip off. Example: Existing 1st of $200,000 at 5.99% is paid down to $180,000 with a $20,000 from a HELOC. My paycheck is $4000 per month and I apply the entire amount to the HELOC and use credit card for everything then payoff in full. My expenses are $3200/mo including my 1st mortgage. So I am paying an extra $800/mo on my HELOC less the %. At the end of 6 months the HELOC balance assuming 8% interest would be $15769 + my 1st mortgage balance of $178,909 + $4800 (extra I paid that I now need) = $199,478. My regular 1st mortgage at the end of 6 months would be $198,788. This program is NOT looking so good. The ARM 1st mortgage is even worse. It would put me backward. If I didn't need the $4800 and left it there, the balances owing would be $194,678...BUT if I paid $800/mo extra on my 5.99% FRM my balance would be $193,922. Every way I figure it, it's not worth the cost. I won't be spending my $3500 on this program.

First let me just say that I am from Austrailia. I moved to the States 11 years back and have established a great living. I have always felt the financial system here was a bit self interested due to how much money I was spending on interest alone. I am familiar with this program and its concept because I used it in my homeland. It is a better way. I have not committed to it but I am happy to see the Mortgage Checking Account brought over.

I wouldn't expect many first party testimonials. If someone has paid off their home in 5 years, under the direction of this program, they are in the Bahamas. Not blogging the concept.

Jeremy,

Correct me if I'm wrong but I don't believe the question was ever whether the program was a scam but whether the price of the software was worth it, correct?

From my understanding, it is legit but you CAN technically do it without SFG if you wanted to commit the time and energy.

I don't think anyone really corrected the author's original article, did they? If you cannot disprove that the rest of the posts are hard to figure. I usually have a wary eye on these things and probably overly conservative. Unless someone disproves the original argument I'd likely stay away from this. Jeremy had a good point about it not being a scam but whether the price was worth it.

Excellent posts... I am summarizing here what I think I learned from all of these posts:

a. consolidate all accounts into one
b. make your deposits earn the highest interest rate by making it a Money Market account or other market rate yielding account, instead of the low life checking account... many banks offer unlimited check writing privileges on the money market account... just make sure it is a big bank and select treasuries as your option for money market
c. your deposits earn interest compounded daily
d. use the interest you generated on a monthly basis and make extra payments on your mortgage (either setup autopay or manually do it every month)
e. should inflation kick in due to high energy costs, we may earn higher rate of interest from our deposits than our 30 yr fixed mortgage rates.. so then you have a net positive cash flow....
f. SFG concept made me think but I will not use them. There is no logical way to save thousands off your mortgage and/or reduce years of the mortgage without having to pay for it.
g. Dee's number crunching is very detailed and as perfect as it gets.. thanks for your effort.

Happy Holidays to all of you and dont let "gr****" steal your christmas.

Good post Sid. I am a mortgage banker and just discovered a program like this at my corporate offices sales training a couple of months back. I agree with all of the poits that Sid just made. One of my co-workers has used this program and did in fact pay off their home a couple of times already. They use their credit line to buy properties for cash and then either refinance the investment property or sale it and then pay down or pay off the line of credit again. $3500 does seem pretty steep to me. I am all for selling a good product that is beneficial to my customers and I am not convinced this is the way to go.

Well, I am also looking into this Sydney Financial Group program. So far it seems very logical, but I do have many questions. Before arguing or giving my opinion about this, I'd like to ask this: In the videos from SFG, they say you "transfer money from your mortgage into your MCA" how exactly does that step occur? I can't understand how one does that part of the process. The software is used to determine how much exactly to transfer from your mortgage into the MCA.

Now, my opinions of this conversation and the program. My situation is this: I have 2 mortgages (an 80/20 split). My first is a 5 year fixed, interest only of $195000 at 7.75% interest. My payment is about $1300 a month on this one. The 2nd mortgage($49000 @ $408 a month)is a standard 15 year fixed with a balloon payoff at the end of the balance. I bought the home for $236500 when it was valued at $250000. We financed the closing costs totally. This part of the country is still getting growth rates on value at 5% to 10% a year, meaning my home has risen in value as much as 50k in just 2 years.

Now, with all that equity sitting there unreachable, this program sure looks attractive, and certainly it would be great to pay off these loans with it, but under this current situation, I can not get any use of the equity in the home, unless I refinance. Under the plan, my income would cut the daily interest down much more/faster than anyone has discussed here. There is no way it would not. Also, with full access to the equity, I could pay off my credit card debts, and put put that money into paying off the mortgages earlier. Cash flow is key in the program, no one seems to understand that or noticed that.

I have been in this home 2 years now, and paid almost a fifth of the cost in interest alone, and still have to pay the full note.. This is our first home, and could never have gotten into this without this type of loan setup.

I learned from here that the cost of the software and program is $3500, which is not alot if they really save me all that interest. I'd pay double if needed. But nothing if it really doesn't work.

If you have credit cards do your due diligence to find one with low interest. They are out there but may take some work. I know of one person who loves to buy clothes and uses department store cards with 18% (or so) interest. What a waste of money. You can find Visa cards with interest rates at half of less than department store cards, at least was the case the last time we did some investigating.

Rather than critic Jeremy's original numbers or those of other posters, let me just say that the idea of a mortgage checking account is one of the better personal finance ideas I have heard of. It can be accomplished without using anything more than a HELOC that has check writing privileges (maybe all HELOCs do, I don't know). Spend the time to educate yourself on how to do this and it is time well spent.

Personally, I put 10 to 15 hours into figuring it out. Given that the time commitment on my part saved $3,500.00, that works out to somewhere between $233 and $350 per hour.

Also, since there's an underlying suspicion of all who disagree with the original conclusion and qualifications on both sides have been called into question, let me say I'm not affiliated with nor will I use Sydney or any other provider. It is just not necessary. As for qualifications, I hold two professional designations - Chartered Financial Analyst (CFA) and Certified Treasury Professional (CTP). I graduated Summa Cum Laude with a degree in Finance and currently manage the treasury group of a $170 million, multinational manufacturing company.

If there's interest in how anyone can use the idea to accelerate the payoff of their mortgage, then I will post more specifics as time allows.

I rely on your gracious forgiveness that I misused the word critic in my original comment when I should have used the word critique.

I was just like to know if the Mortgage Checking Account works the same as a regular HELOC where if you use the money from the account you have to pay it back. If so, that would mean that the only readily available funds are payments you're using toward paying the mortgage and the credit card/expenses; compared to a regular checking or savings account. In other words, is your equity ever able to be used in an emergency or as your retirement as SFG indicates?

It works like a regular HELOC and must be repaid. In fact, and I'm going to feel like that jerk kid in elementary school that tells everyone else there is no Santa Clause by saying this, there is no such thing as a Mortgage Checking Account ("MCA"). That is a marketing phrase that is meant to frame/position the method used by SFG and others - it is slick packaging for their product. MCAs do not exist within the US financial system to the same extent that demand deposit (checking), savings, or money market accounts do. MCAs are not covered by the FDIC and if you walk into your bank and ask to open one I suspect you will be met with a dead-blank stare.

I hear your moan of frustration, the under-your-breathe explicative. I feel the anger expressed in the slam of your mouse on the mouse pad. Persistence is called for here. If it were easy to understand, then everyone would do it and SFG would have to ditch that outrageous fee.

There is only one way I know of to pull equity out without paying it back - sell your house. Even reverse mortgages, a popular way to access your equity in retirement, must eventually be repaid. Seeking a way to both utilize the equity and not repay it is truly a search for a way to eat your cake and have it too.

Although it must be paid back, a HELOC does provide immediate access to your equity in case of an emergency. This is the major advantage over simply making extra payments against your mortgage. Those extra payments are locked up unless you refinance or (you see this coming, right?) take out a HELOC.

This is all very frustrating. Reading all the above comments alone eats up a nice chunk of otherwise enjoyable time. So, why not bag it all and forget the fact that you ever heard of a MCA?

Read the articles kv linked to in a previous comment and you will find that is what the "experts" suggest that you do. However, look at this statement from one of the articles. Am I the only one that finds this interesting?

"In fact, [line-of-credit home loans] were engineered for high-income earners with a very large cash flow. Even then, credit experts say, they don't provide much in the way of savings."

I guess I'm wagering that the high-income earners with a very large cash flow are probably informed enough to make intelligent decisions regardless of what the low income "experts" claim.