I finally found an MMA agent kind enough to post an example of a year with the MMA software in action. It's available at Debt Free Project. His format focuses on the use of the HELOC as the method of savings but follow along and you'll see why the HELOC offers little to no savings at all. Travis offers the same starting point as you see below, $200K borrowed at 6% fixed, for 30 years. Since the family in his example has income of $5,000 but expenses of only $4,000, there's an extra $1,000 available. He uses it to pay down the HELOC, I'll use it only after it's in the checking account to pay towards principal at month's end. Travis' balance after 12 months is $176,319.65, plus $9,167.30 on the HELOC for total debt of $185,486.95. But wait, my balance below is only $185,208.41. I am ahead by $278.54! Is it magic? No, it's common sense. How can you maintain an average HELOC balance of $9,000+ and come out ahead? My $278 is about 3% of $9,000 and that's most of the difference from Travis' HELOC rate and the first mortgage. He seems pleased to have 'cancelled' future interest of $77,524, but that $865 HELOC interest will add up pretty fast. He is also proud to have only 267 payments left on the first mortgage, while still ignoring the $9,135 HELOC. But he's kind enough to remind us that the $3500 MMA fee is not included in his numbers. That's ok, even free, my free spreadsheet beats MMA. He offers that us naysayers claim "that the system just has you transfer all of your discretionary income to your primary mortgage, which one could easily do on their own......in the first year of this example, additional principle payments made to the 1st position mortgage totaled $20,336.90." Well, no. You did take your entire extra $1000 each month, but also borrowed an additional $9,135 on the HELOC. Next he offers "It is important to note that these principle payments to the first mortgage did not come from the client's discretionary income." No? You borrow nearly a full year's discretionary income on HELOC, and use every discretionary cent to pay it down, but it didn't come from there? This is when my understanding of the words 'discretionary' and 'income' seem to fail me. If you would like a copy of the spreadsheet below, so you can change the mortgage numbers and extra payments to see for yourself, please send a note through my blog.
One minor note  I use two calculations to figure out total cancelled interest. Due to rounding errors within excel, the numbers diverge by a tiny fraction. At 12 months, you can see the error is 66 cents. If extended to 60 months, the error is only 25 cents. It doesn't worsen, it narrows. I offer this lest some kind soul see this slight difference and cry 'foul'. I'm sure for your $3500, you can be sure to be behind by a precise $278.54 and not worry about these errors. (Scroll down, please)
JOE

