Hello Cd's,
Recently I met a guy who sells something called 'smart loan' offered by either citigroup or citicorp (I am not too sure what I heard him say). He just gave me a gist of it. He gave me a sinario where a homeowner had a mortgage at a certain rate(4.5%) and made a certain biweekly payments. He displayed a chart which shows it would take the homeowner up to about 20 years from today to pay off the remaining of the house which is about $160K. But with his smart loan plan, he claims the same home owner can pay off the mortgage faster (in about 8 years time) with lower monthly paymounts and lower amount of total interest saving him a huge amount at the end as compared to the original plan he was with. Also the interest rate in the new plan was 7.7%. My question to him was how can there be lower monthly payments and higher principal paid with this plan when the interest rate. To this he said he would visit my place and have me call the Citigroup office myself and understand the scheme. He will visit in a couple of days. But I want to get as much info as possible on this before he shows up as normally these sales people sell hard and dont let go that easily.
Your help is appreciated.
Bash
Quote:
Originally posted by BAsh
Hello Cd's,
Recently I met a guy who sells something called 'smart loan' offered by either citigroup or citicorp (I am not too sure what I heard him say). He just gave me a gist of it. He gave me a sinario where a homeowner had a mortgage at a certain rate(4.5%) and made a certain biweekly payments. He displayed a chart which shows it would take the homeowner up to about 20 years from today to pay off the remaining of the house which is about $160K. But with his smart loan plan, he claims the same home owner can pay off the mortgage faster (in about 8 years time) with lower monthly paymounts and lower amount of total interest saving him a huge amount at the end as compared to the original plan he was with. Also the interest rate in the new plan was 7.7%. My question to him was how can there be lower monthly payments and higher principal paid with this plan when the interest rate. To this he said he would visit my place and have me call the Citigroup office myself and understand the scheme. He will visit in a couple of days. But I want to get as much info as possible on this before he shows up as normally these sales people sell hard and dont let go that easily.
Your help is appreciated.
Bash
IMO, he probably is a newbie from Primerica. They have many financial planning schemes wherein they combine your various loans and investment plans into those that they offer and give an 'estimate' plan for the rate of return. I bet he will not take 'only' the mortgage portion of the loan - will try to include your credit card debts, LOC etc.. and also try to redesign your investment portfolios.
It will still be interesting to see what he comes up with. Hope you can update when you do understand what he offers.
Good luck.
Hiren
hchheda is right.
SMART loan is a product by Primerica and your acquintance is most likely an agent.
A lot of Primerica agents try to sell it as being a Citigroup product.
I don't know exactly what the features of this product will be, but most likely it will lump together all your debt, including credit cards, mortgage, etc. and then combine that with an investment product that will enable you to write off the interest paid on the consolidated loan.
I would recommend caution.
There is no harm in listening to the proposal and getting the numbers.
However, you will have to do your homework after he has left and figure out whether it makes sense for you or not.
Allow yourself one day to "cool off" and forget all the sales pitch.
After that, do the math and see what you get.
Keep in mind that leveraged strategies against your home is very risky these days because of the state of the stock market.
Good luck !
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Here is a https://citismartloan.ca/Home.html that I found...
Smart Loan is a CITICorp product. I think, Primerica is a Broker House, you have a choice of not using them - and go to other broker or bank directly.
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Mumbai Maazi Ladki ...
Quote:This seems to be a variation of the "Smith Manoevre".
Originally posted by Maharaj
Here is a https://citismartloan.ca/Home.html that I found...
Smart Loan is a CITICorp product. I think, Primerica is a Broker House, you have a choice of not using them - and go to other broker or bank directly.
The success of the plan will be contingent upon the rate of return you can get out of your investment.
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Location: Beautiful BritishColumbia
Posted on: 02-02-09 23:59:49
DO NOT WASTE YOUR TIME!
You have answered the question yourself..
My question to him was how can there be lower monthly payments and higher principal paid with this plan when the interest rate is at 7.7%.
Another N.American scam!
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"After climbing a great hill, one only finds that there are many more hills to climb." (Nelson Mandela)
