Significance

• Money merge accounts leave no room for irresponsible behavior, making it a good choice for borrowers with poor impulse control. It's a bit of an unusual technique that requires good credit. Opening a money merge account involves taking out a home equity loan and then putting most of it towards the principal of the mortgage. Paychecks are then almost entirely devoted towards paying off the home equity loan. This only works when the home equity loan costs less to maintain than the mortgage after taxes.
  
  

Function

• Although it seems exotic, in many cases a money merge account can help people to pay off their mortgage much faster and reduce their expenses. It does increase overall debt burden significantly at first, but the discipline that the system pushes upon the people that use it help them to pay down their housing related debts that much faster. In that way, it generally helps to improve credit score because once the money merge account is started, it's very hard to get out of it before paying down both the mortgage and the home equity loan.
  
  

Warning

• There's a catch to these programs, however. For the service of merging all of the accounts, most of the services that offer these accounts and advisory services for them charge significant up-front fees to the tune of $4,500 or more. While many people may prefer to have some expert counsel when trying to balance all the different interest rates - many of which are variable - and determining how to minimize their payments - it's still quite a lot of money that could be potentially put towards better purposes.
  
  

Considerations

• Money merge accounts increase the overall debt burden of the borrower before they start to reduce it. They are very reliant on steady, predictable income, and severe trouble can ensue if that stream is interrupted for any reason - such as job loss or injury. No matter their risk profile, people who lack insurance or steady employment put themselves in danger if they try to take out a money merge account. The addition of a home equity loan to their debt burden along with the loss in flexibility caused by the deposit requirements make it a risky personal finance tactic.
  
  

Potential

• For people that have sufficient income and want to pay off their mortgage as soon as possible without heavily degrading their quality of life, a money merge account can be a moderately beneficial move. Many people have trouble holding on to money once it's in their account - it's human nature to discount long term costs for short term comfort. A money merge account makes it so that paychecks are automatically redirected towards debt payments. It's an attractive alternative to many who have attempted to impose financial self-discipline and found themselves struck by a never-ending cavalcade of setbacks.