The (Anything but) SMART LOAN

Recent Solution: (October 2008) SMART Loan Proposal $212,685 (Includes over $5,600 in fees) Rate: 7.15% Bi-weekly payment: $718.25 Proposed payoff: 22 year, 4 months

SMART Loan Proposal

$212,685 (Includes over $5,600 in fees)

Rate: 7.15%

Bi-weekly payment: $718.25

Proposed payoff: 22 year, 4 months

Recent Solution: This equals $1556.21/month Bi-weekly payment: $718.25 ($718.25 * 26 payments year / 12 months)

This equals $1556.21/month

Bi-weekly payment: $718.25

($718.25 * 26 payments year / 12 months)

Recent Solution: $1556.21/month Proposed payoff: 22 years, 4 months

$1556.21/month

Proposed payoff: 22 years, 4 months

Let’s see what else the client could do…

Let’s see what else the client could do…

How about a 20 year fixed mortgage???

How about a 20 year fixed mortgage???

In other words, the client walks into any bank refinances the same amount on a 20 year fixed mortgage ….

In other words, the client walks into any bank refinances the same amount on a

20 year fixed mortgage ….

BETTER Solution: 20 Year Fixed mortgage, same loan amount (Assuming the bank charged the same ridiculous fees) Loan: $212,685 Rate: 6% (Source: http://mortgage-x.com/x/ratesweekly.asp ) Payment:$1523.49 Payoff: 20 years

20 Year Fixed mortgage, same loan amount

(Assuming the bank charged the same ridiculous fees)

Loan: $212,685

Rate: 6% (Source: http://mortgage-x.com/x/ratesweekly.asp )

Payment:$1523.49

Payoff: 20 years

Which is better? 20 Year Fixed mortgage: $1523.49 22 years, 4 months SMART Loan: $1556.21

20 Year Fixed mortgage: $1523.49

22 years, 4 months

SMART Loan: $1556.21

Which is better? 20 Year Fixed mortgage: $1523.49 22 year, 4 months SMART Loan: $1556.21 Avoid the SMART loan and finish paying 28 months sooner and save $33/month But wait, there’s more!!!

20 Year Fixed mortgage: $1523.49

22 year, 4 months

SMART Loan: $1556.21

Avoid the SMART loan and finish paying

28 months sooner and save $33/month

But wait, there’s more!!!

Which is better? What if we wanted to compare monthly payments using the SAME 268 month as term on the SMART loan?

What if we wanted to compare monthly payments using the SAME 268 month

as term on the SMART loan?

If we asked the bank to amortize the loan over the same 268 months the SMART loan was proposed over, the payment would drop to: $1442

If we asked the bank to amortize the loan over the same

268 months the SMART loan was proposed over, the payment would drop to:

$1442

Which is better? $1442 or $1556 A Savings over the SMART loan of: $114/month!!!

$1442 or $1556

A Savings over the SMART loan of:

$114/month!!!

What’s so SMART about paying more money for a longer period of time?

What’s so SMART about paying more money for a longer period of time?