Detroit, Michigan
1.9K views
7 comments

SMART loans do several things. I have one and I have sold many.

Here's the thing: SMART is about saving on the total cost of your mortgage. No one promised you a lower rate -- no one promised you 'guaranteed' approval. What you should have been promised (but perhaps were not, unfortunately) is a mortgage the lowers your total cost of ownership. I had a 30-year mortgage at a LOWER interest rate of 6.5% and refinanced my home and all my debt at 7.25 with my SMART.

Yes, if I took all 30 years to pay off my home I would have paid more. By enrolling in the SMART bi-weekly payment, I will pay off my home in 18 years -- AND pay $180,000 less in interest bringing my total cost of ownership down. The reason most of us never own a home outright is because we never get to the principal of the loan, we're only paying interest, the SMART loan gets you there faster.

I would like to correct one post I saw here.

There is a prepayment requirement on the SMART loan -- it is comprised of a clause that says if you pay off the loan in the first three years there is a penalty IF you don't buy another home through Citimortgage. So if you're trading up (or down), as long as you get another SMART loan, you're good!

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Anonymous
#51288

I have been talking to a Primerica Rep who is encouraging me to do the Smart Loan. She included $20,000 extra for the amount of the loan for a vehicle.

She said I'd get the title right away...it would be paid for by them, thus, basically getting a car for free!??? My current mortgage loan is 5.75% through CEFCU. The Smart loan rate would be 6.16, but she can't tell me how that figure was calculated. I feel really ignorant and uninformed in trying to decide if it would be worth it to do the Smart loan.

I am single, have no one to discuss this with, only work 3 days a week due to taking care of my elderly mother. If she would happen to pass away, which is the normal life progression when we become elderly....my income would be depleted by half! I don't really NEED a new car.....just a thought I expressed to her...that down the road I might need a new one. I'm not sure what to do.

She is coming back for 3rd time tomorrow, and I feel stressed out, unsure, and not knowledgeable enough to make a wise decision.

Help!!!!! Any advice would be greatly appreciated!!!!

Anonymous
#43346

Someone here is clueless,

30 Year loan versus a 18 year loan for the same amount and the 18 Year has lower payments? LOL, Looks like Primerica has found the next fountain of confusion.

A quick tip, Take a 30 year and pay one payment in advance, then pay twice monthly, No Refi, No Bi week Plan, If your loan does not have a prepayment penalty, you will save BIG time and knock of years from your loan and save thousands on interest.

It's no wonder all those Sub Prime lenders took so many to the cleaners,They even took us who did not buy into the Neg -Am loan fiasco.

Get educated don't let some clown take you for a ride.

Anonymous
#33048

Fricken idiots of course Primerica is better!

Anonymous
#19432

Sorry to burst YOUR bubble assclown, but your example is completely flawed.

My original 18 year idea was in response to PRIMERICA's 30 year loan set to be done in 18 years.

So go back and re-read the example. No matter what you're going to want to believe, the SMART loan is worse. Go get any SMART loan you've done and look at the original term, which is probably 360 months. Then, look at the TOTAL amount paid over the entire loan, even with the bi-weekly simple interest calculation. Then, you can compare that "magic" payoff term to a fixed mortgage of that same term and the regular mortgage payment is lower!

So, started as a 30 year loan, the SMART loan says it's done in 19 years if paid bi-weekly. Take THAT amount and figure out the payment for a fixed rate 19 year loan at a normal rate and the 19 year fixed is better.

This is DIFFERENT than your example of them both starting at 18 years.

Come back with facts, not distortions.

Anonymous
#19370

What they can't understand is why you insist on opening your mouth in regard to math you clearly can't do very well. What makes our loan different is that it's a DAILY COMPUTED INTEREST, which is what makes it easier to pay off, not just the fact that it's a fixed rate. And even if you find a loan like that outside our company (which CAN be done, but is not easy) you WON'T find anyone that will then help you stay disciplined and invest the difference. There is nothing ANY company can do that there isn't another company out there doing the same thing. Someone once was quoted 20 or 30 years ago as saying that someday everyone would have all the same products to choose from, and in the end, the only companies that get ahead will get there for the SERVICE that their PEOPLE provide... not the products.

But let's play...

Hypothetical situation:

You have 100,000 dollars left on your mortgage, and you have 18 years left on it. You can get a refi from Citimortgage (as you stated) in a fixed mortgage that is NOT daily computed, because NO, you probably WON'T get that directly without us, and you managed to get, say, 5%.

Your monthly payment would be about 703 a month, you'd be paid off in 18 years, paying a total of 51,855 dollars in interest, total cost: 151,855 dollars.

OR

You get the SAME loan for 18 years (because we ALWAYS refi for the same term or a SHORTER term, we NEVER stretch you back out... good luck finding that somewhere else as well) with the $MART loan, split your payment in half and make bi-weekly payments equalling 703 a month. Because the payment is credited to your account the DAY it's received (unlike a pre-calculated interest loan, in which the lender sets that payment into a seperate account until your payment is due, and then credits your loan with the full payment on it's due date, which results in saving far less interest in the end... that's called a "pseudo-biweekly"... look it up on MSN money), that instant credit knocks down the amount of principle upon which your next 2 weeks of interest is based. Thus, less interest is accrued by the date of the next payment, and more of said payment is eating into principle, rather than being laid to waste in interest. The net effect is that your $MART loan, thanks to the equity builder bi-weekly payment program, is paid off in 15 YEARS AND 5 MONTHS, and you save 10,661 dollars of interest, for a total cost of 141,184 dollars, and OWNING YOUR HOME TWO AND A HALF YEARS SOONER.

So YES, actually, the $MART solution is better.

sorry to burst your bubble.

Keep trying though, bud. this is kinda fun.

100,000

18

5%

703

Anonymous
#17580

Pay close attention here:

From the start, instead of enrolling in the Smartloan 30 year/smoke-n-mirrors 18 year loan, you went to Citimortgage through Citibank and asked for an 18-year fixed mortgage (not the 30-year loan you keep comparing the Smartloan to), YOUR MONTHLY PAYMENT WOULD BE LESS, YOUR TOTAL PAYMENTS WOULD BE LESS, AND YOU WOULDN'T HAVE THE HIGH FEES AND PRE-PAYMENT PENALTIES.

What can't people understand about that? Tunnel Vision?

Anonymous
#17350

Do people ever ask why things are the way they are? There are higher rates and penality for a reason.

If it were not an issue they wouldn't be there. Companies don't include anything within a contract for the benefit of the consumer.

Yes PFS can I have another.

Yes PFS can I have another. :roll