3.95% TheSmartLoan.com ?? Any Opinions ??? - Posted by Rich

Posted by rich on September 06, 2001 at 08:31:27:

G Wmsom,

Thanks for your information. Your right, something a little more long term would be better like 5-10 years. But briefly looking at there terms, it seems i can find those types of loans anywhere.

Does anybody know the current refinance rate, on a 10-15 year loan, about $110k ? Currently my loan is 6.5% that i did 3 years ago.

3.95% TheSmartLoan.com ?? Any Opinions ??? - Posted by Rich

Posted by Rich on September 04, 2001 at 16:21:22:

Does anybody have an experience with this ? or has anyone refinaced from them and have been able to get such a rate?

I looked at the site briefly but you have to fill out the application for any further details.

Also, it dons’t say what term this kinda rate is for.

Just curious. Any info would be helpful.


Re: 3.95% TheSmartLoan.com ?? Any Opinions ??? - Posted by G Wmson

Posted by G Wmson on September 06, 2001 at 24:05:30:

Hmm. Well I got some information from them, but I don’t like what I’m hearing, least not for anything long term. the min. you can borrow is 75k.

It is an AMR. the 3.95% is a suck in rate to get ya to borrow money and is only valid for one year, after that the second year it goes to 7.5% and then the third year it goes to 8%, the cap is 11.5% but it will never be below 7.5% regardless of how low the prime is.
The only way I would go for something like this is if I can repay the loan within a year. I’m considering doing this myself on a house to fixup and flip,
then immediately pay it off with the profits and refinance whats left at something at like 6.5% somewhere else. When questioned about what the rate is tied to he said something about the COFI rate, but was very, very, vague about any kind of formula or percentage used to determine what makes your adjustable rate go up. The one thing that stood out to me was the fact that he could tell me what my payment would be in 2 years and again in 3 years. How could he possibly know what the discount rate will be in 3 years or the year after… All i got to say is be careful, use them, don’t let them use you.
Let us know how that works out.

Re: 3.95% TheSmartLoan.com ?? Any Opinions ??? - Posted by michael

Posted by michael on September 06, 2001 at 13:57:01:

Your explanation of this loan is close but not quit correct.
The start rate of 3.95 is only good for one month. After the first month, the actual interest rate will adjust monthly. The new rate every month will be the index plus margin. Typically in the 7 % range.
The 7 ½% increase you refer to is the increase in minimum payment, not interest rate.
You have the option to pay a minimum payment or the fully indexed rate. If you pay the minimum, this will not be enough to pay all interest due. That difference will be added to your principle balance. In this case your loan amount will actually increase.

Hope this helps to clear up the facts on a very confusing and potentially dangerous loan