I recently had the rare opportunity, thanks to a rogue agent, to view the V4.2 software and took a few snapshots of my scenarios. For me, the most difficult scenario to get any agent to model and email to me was for when the client has no extra money. Since UFirst, through a combination of “Sophisticated Algorithms” and “Factorial Math” claims for this product to be the “Financial GPS” which is the fastest way to pay off your debts, one can only see the impact MMA and the “HELOC shuffle” has by isolating these variables from the use of your own money to pay down your own mortgage. So let’s see what the MMA system tell us the impact it can have when we don’t have extra money to add each month. First, the cash flow:
This is the standard scenario, with $5000/mo income, and a $200,000 Mortgage at 6%. You can see the total monthly expenses are $5000, which includes the mortgage at $1199.10, and the monthly cost of funding the MMA software at $3500, 9% with a 30 yr payoff, $28.16 per month. Perhaps not so remarkably, the years to payoff is 31.33. Huh? What happened to fastest way to zero? What in the world did MMA do that could possibly be worse than simply ignoring the software and just paying both the mortgage and HELOC for exactly 30 years? It’s very simple. The software is broken. As I started to discuss a couple weeks back, the whole MMA system is based on lies, deception, and obfuscation. Let’s look now at one month of transactions based on the details above.
Now, you can easily see why it takes an extra 16 months to pay off the mortgage. Despite the fact that we told the program there is *no* extra money, it still decides that the optimum amount to send to the first mortgage from the HELOC is $5222.40. This balance cycles up and down within the month, but on average, increases month to month, and takes 16 months worth of full mortgage payment to pay it off in 30 years. Now, you know that no agent will be able to explain this, they should say that if you truly have no extra funds, you should not use the program. In reality, they will start to ask you where you can cut back, even to where you have $100 available to get the program going, and then project future raises and other income. After all, you got that far and they have a sale on the line. Now, instead of buying MMA and paying it off over the life of the program, how about taking that $28.16 and just putting it toward the mortgage. Here is my spreadsheet view.
You can see the interest saved vs original projection is nearly $17,000, and the mortgage is cut down to 338 months or 22 months earlier than 30 years but a full 38 months sooner than UFirst’s own forecast. MMA costs you $45,696 more in interest than my ‘do it yourself’ method. As the agents say, “it’s math, not magic”. Indeed. Just for laughs (yes, I have a strange sense of humor) I told the software to adjust the HELOC interest rate to 2.5%, which is my current rate happens to be. This is the new forecast, below.
Two points to note on the new scenario. First, even with access to 2.5% money, the total interest is still more than $2,000 higher than my projection. Second, why in the world did the software use even less HELOC money, now that it’s so cheap? It only sent $549.23 to the first mortgage as a prepayment? Yet, when the HELOC was 9% it sent nearly ten times that amount? This is software you’d trust? This is what they mean by “watching every penny”? I must admit they are right about one thing, I can’t do this on my own. I’m not that stupid.
Note: for easier viewing, you can click on the images above and open full size.
If I can access the site again, there are a few other scenarios I’d like to run for a future post, I’ve shared what I have so far. If an agent tells you to talk to a happy user, remember that user is likely an agent as well, just helping to make a sale. Send them both my way, by the time I’m done, they’ll go home crying.