Posted on: 07th Nov, 2007 04:50 pm
i am interested in the homeownership accelerator program offered throuhg cmg, but cannot find much information on it. sounds to good to be true. actual unbiased customer reviews would be great.
"This would need to continue like this for the total time in the loan. I did this and came to a consistent negative balance at 959 days. 959/360 (financial days) = 2.66 years till payoff or 31.97 months or 30.07 months till the first time they are at a $0 Balance."
Once again you need to clarify. Is the total amount paid off or not. You said this would need to continue for total time in the loan. In my example at the end you have no loan it is paid off.
Which is it... 2.66 years till payoff or 31.97 months or 30.07 months till the first time they are at a $0 Balance.... is it 2.66 or 31.97 or 30.07?
Again you have really shown nothing. Hopefully Sam or one of the other admins can activate your attachement so I can see it.
Once again you need to clarify. Is the total amount paid off or not. You said this would need to continue for total time in the loan. In my example at the end you have no loan it is paid off.
Which is it... 2.66 years till payoff or 31.97 months or 30.07 months till the first time they are at a $0 Balance.... is it 2.66 or 31.97 or 30.07?
Again you have really shown nothing. Hopefully Sam or one of the other admins can activate your attachement so I can see it.
Livinginnky,
The excel sheet will show the example in full detail. What is occuring is that there are times when the customer hits a $0 balance. But then using this as their checking account, say drawing $500 cash. Balance moves from $0 to $500 and starts accrues interest again. Think of it like how your checking account is moving up and down with your daily usage.
The excel sheet will show the first time they hits $0 is 30.07 years, but then the expense for the month come in and they have a positive balance.
At 31.97 months they go constantly negitive (in terms of balance owed) at this time they are building up the account. Flip the account in your mind at this point from a debt to an asset.
The excel sheet will show the example in full detail. What is occuring is that there are times when the customer hits a $0 balance. But then using this as their checking account, say drawing $500 cash. Balance moves from $0 to $500 and starts accrues interest again. Think of it like how your checking account is moving up and down with your daily usage.
The excel sheet will show the first time they hits $0 is 30.07 years, but then the expense for the month come in and they have a positive balance.
At 31.97 months they go constantly negitive (in terms of balance owed) at this time they are building up the account. Flip the account in your mind at this point from a debt to an asset.
Why would you do that though? That is my question. Once you hit $0 you should be done. And then use your $3500 for whatever you want. Why would you continue to pay interest on your own money?
Again nonsense. 30.07 years? You would have the mortgage paid off in 31 months the conventional way. Thats months not years. After 31 months you have no mortgage at all.
So you say at 31.97 months the bank owes the customer at that point? Does CMG pay interest on the difference?
Again nonsense. 30.07 years? You would have the mortgage paid off in 31 months the conventional way. Thats months not years. After 31 months you have no mortgage at all.
So you say at 31.97 months the bank owes the customer at that point? Does CMG pay interest on the difference?
Also I want to confirm that you are saying the rate can adjust as high as 11.5%. And that there is no "cap on the low rate" meaning if the Libor goes down, then the rate can go below the start rate.
Ok I looked at your spreadsheet.
At what point does the borrower get charged this interest?
Your spreadsheet only shows the debits and credits it never factors the actual interest charge it just lists it to the side.
If the interest is calculated daily... is it charged daily? OR monthly?
If you look on the second day the balance would really be $90,016.25 as per your own numbers NOT $90,000 and so on and so forth. I don't actually see anywhere when the interest is actually accounted for on the principle side. And on the second day it would be $90,232.58 NOT $90,200 like you show. See how the math starts to change as you add the extra interest into the equation? Your spreadsheet is wrong from day 1 and is already off by over $30 on the second day alone.
At what point does the borrower get charged this interest?
Your spreadsheet only shows the debits and credits it never factors the actual interest charge it just lists it to the side.
If the interest is calculated daily... is it charged daily? OR monthly?
If you look on the second day the balance would really be $90,016.25 as per your own numbers NOT $90,000 and so on and so forth. I don't actually see anywhere when the interest is actually accounted for on the principle side. And on the second day it would be $90,232.58 NOT $90,200 like you show. See how the math starts to change as you add the extra interest into the equation? Your spreadsheet is wrong from day 1 and is already off by over $30 on the second day alone.
Livinginnky,
The answer to your first question, about how the balance is moving up and down. This is a occurance with the account, you can stop your direct deposits at anytime, they are not required. So you hit zero you can stop putting money into the account and would stop using the account as your primary banking relations ship (for daily transactions).
Sorry if I puts years into the earlier reply today, that was a typo. You have the ability to link this account with any other account. So you could transfer money from the CMG account to an investment account, money market, etc. The account does not pay interest.
2nd post.
You are correct the life cap of the loan is 5% over the start rate. So it can not increase beyond that. Our customer starting at 6.5% woudl have an automatic cap of 11.5%
Your second statement is correct. You may cap the increase of the rate, but CMG does not cap the lowering/ falling of the rate. libor goes to 0%, you will rate would them be margin only.
The answer to your first question, about how the balance is moving up and down. This is a occurance with the account, you can stop your direct deposits at anytime, they are not required. So you hit zero you can stop putting money into the account and would stop using the account as your primary banking relations ship (for daily transactions).
Sorry if I puts years into the earlier reply today, that was a typo. You have the ability to link this account with any other account. So you could transfer money from the CMG account to an investment account, money market, etc. The account does not pay interest.
2nd post.
You are correct the life cap of the loan is 5% over the start rate. So it can not increase beyond that. Our customer starting at 6.5% woudl have an automatic cap of 11.5%
Your second statement is correct. You may cap the increase of the rate, but CMG does not cap the lowering/ falling of the rate. libor goes to 0%, you will rate would them be margin only.
Now I am going to go through your last post line for line so nobody gets confused.
"
To start with my comment on the ARM, what CMG is offering is a cap of any increase in the rate for a 3 to 5 year period. It cannot increase above 1% for the next 3 or 5 years, this will not cap the downward movement, just the upward movement. For ease of explanation I used the ARM comment and I apologize if that was misunderstood. For example you start at 6.5% rate cannot go past 7.5% for chosen amount of time. If LIBOR goes to 20% you are at 7.5% for 3 or 5 years. If LIBOR goes to 1% you are at your chosen LIBOR + margin, say 2.5%. "
So there is no downward limit? And you are verifing that the rate can go up?
"Reference for this is 'www.cmgbanking.com,' under guidelines. Unfortunately you will need a password to access that portion of the page, so I have copied that portion for you. You can apply for a password, without a lot of information, just basic address stuff.
- Program 900C3 and 900MC3: Interest rate increase cap of no more that 1% for the first three years "
Wow, you said 3-5 years. Then quoted the guidelines of 3 years. It matters so you would be wise to be exact as I will be very exact no misleading here. I am just suprised you did it so close to another comment like that. And are your saying I have to apply just to read the fine print?
"
I am going to move to the part about rate going up to 15% next.
'livinginnky said No tricks or scams. Just a straight 30 year fixed rate with 12 months interest only paid off in 32 short months. And most importantly no need to worry about this new heloc going to a 15% interest rate. Quick question, when that happens, how are these people going to save money? '
Or you later comment
What happens with the CMG example when your 90,000 heloc goes to 14% interest rate? Could we have a salesman answer that for us?
According to
'http://www.moneycafe.com/library/1mlibor.htm#graph'
and
'http://mortgage-x.com/general/indexes/fnma_libor_history.asp'
the history of 1 month LIBOR starts in 1989.
I entered it into Excel and did an average for what the 1 month LIBOR has been for 18 years, I came up with 4.411618%. I am aware that the index came about in Sept 1989, and started in the 9.5% range, so without the first few months, my average is likely to be skewed down. So let us call it 4.6% for argument's sake.
CMG has a life time cap of 5% over start rate. Customer starts at 6.5%, 11.5% would be the highest this loan could ever go if market conditions occurred for this to happen.
So my customer would never see the 15% or the 14% rate you are speaking of and will mostly likely see a rate averaging around the indexed 4.6%+ margin of borrower�s choice, 6.5% is high but fair for comparison."
Even with a low rate you still haven't proven your savings.
"
Now for your next reply
You have shown nothing except your unwillingness to speak the truth
Here is the math that I was simplifying, I hope after I show this you will understand my request to simplify the math.
Here is a month in my customer's life
*note upon preview of file this did not transfer well, please refer to the attachment" decided to keep it in the post.
Day Balance Interest Change in new Int
charge (daily) Acct Balance Charge
1 100000 0.000180556 -10000 90000 16.25
2 90000 0.000180556 200 90200 16.286111
3 90200 0.000180556 0 90200 16.286111 4 90200 0.000180556 400 90600 16.3583333
5 90600 0.000180556 0 90600 16.358333 6 90600 0.000180556 0 90600 16.358333 7 90600 0.000180556 1000 91600 16.5388889
8 91600 0.000180556 0 91600 16.538889
9 91600 0.000180556 400 92000 16.611111 10 92000 0.000180556 0 92000 16.611111
11 92000 0.000180556 75 92075 16.6246528
12 92075 0.000180556 0 92075 16.624653 13 92075 0.000180556 0 92075 16.624653 14 92075 0.000180556 1000 93075 16.805208 15 93075 0.000180556 0 93075 16.805208 16 93075 0.000180556 0 93075 16.805208
17 93075 0.000180556 0 93075 16.805208
18 93075 0.000180556 1000 94075 16.985764
19 94075 0.000180556 0 94075 16.985764
20 94075 0.000180556 0 94075 16.985764
21 94075 0.000180556 300 94375 17.039931
22 94375 0.000180556 0 94375 17.039931 23 94375 0.000180556 0 94375 17.039931
24 94375 0.000180556 1000 95375 17.220486
25 95375 0.000180556 650 96025 17.337847
26 96025 0.000180556 200 96225 17.373958
27 96225 0.000180556 775 97000 17.513889
28 97000 0.000180556 0 97000 17.513889
29 97000 0.000180556 0 97000 17.513889
30 97000 0.000180556 0 97000 17.513889
This would need to continue like this for the total time in the loan. I did this and came to a consistent negative balance at 959 days. 959/360 (financial days) = 2.66 years till payoff or 31.97 months or 30.07 months till the first time they are at a $0 Balance.
Interest cost $8091.96, at first $0 balance
Interest cost $8106.91, at consistent negative balance.
Calyx gave me an interest charge of $8586.27 (30 year scenario) or $8824.32 (30 year IO) for your scenario.
I have provided the excel sheet that I did for your review, to continue to be as transparent as possible. The explanation for the interest saving on the HOA and your scenarios is explained further below."
Please see my above reply as to the validity of your spreadsheet.
And I said I didn't want to talk about the liquidity song and dance. The reason after 31 months. You can't get any more liquid than "paid off"
"
To start with my comment on the ARM, what CMG is offering is a cap of any increase in the rate for a 3 to 5 year period. It cannot increase above 1% for the next 3 or 5 years, this will not cap the downward movement, just the upward movement. For ease of explanation I used the ARM comment and I apologize if that was misunderstood. For example you start at 6.5% rate cannot go past 7.5% for chosen amount of time. If LIBOR goes to 20% you are at 7.5% for 3 or 5 years. If LIBOR goes to 1% you are at your chosen LIBOR + margin, say 2.5%. "
So there is no downward limit? And you are verifing that the rate can go up?
"Reference for this is 'www.cmgbanking.com,' under guidelines. Unfortunately you will need a password to access that portion of the page, so I have copied that portion for you. You can apply for a password, without a lot of information, just basic address stuff.
- Program 900C3 and 900MC3: Interest rate increase cap of no more that 1% for the first three years "
Wow, you said 3-5 years. Then quoted the guidelines of 3 years. It matters so you would be wise to be exact as I will be very exact no misleading here. I am just suprised you did it so close to another comment like that. And are your saying I have to apply just to read the fine print?
"
I am going to move to the part about rate going up to 15% next.
'livinginnky said No tricks or scams. Just a straight 30 year fixed rate with 12 months interest only paid off in 32 short months. And most importantly no need to worry about this new heloc going to a 15% interest rate. Quick question, when that happens, how are these people going to save money? '
Or you later comment
What happens with the CMG example when your 90,000 heloc goes to 14% interest rate? Could we have a salesman answer that for us?
According to
'http://www.moneycafe.com/library/1mlibor.htm#graph'
and
'http://mortgage-x.com/general/indexes/fnma_libor_history.asp'
the history of 1 month LIBOR starts in 1989.
I entered it into Excel and did an average for what the 1 month LIBOR has been for 18 years, I came up with 4.411618%. I am aware that the index came about in Sept 1989, and started in the 9.5% range, so without the first few months, my average is likely to be skewed down. So let us call it 4.6% for argument's sake.
CMG has a life time cap of 5% over start rate. Customer starts at 6.5%, 11.5% would be the highest this loan could ever go if market conditions occurred for this to happen.
So my customer would never see the 15% or the 14% rate you are speaking of and will mostly likely see a rate averaging around the indexed 4.6%+ margin of borrower�s choice, 6.5% is high but fair for comparison."
Even with a low rate you still haven't proven your savings.
"
Now for your next reply
You have shown nothing except your unwillingness to speak the truth
Here is the math that I was simplifying, I hope after I show this you will understand my request to simplify the math.
Here is a month in my customer's life
*note upon preview of file this did not transfer well, please refer to the attachment" decided to keep it in the post.
Day Balance Interest Change in new Int
charge (daily) Acct Balance Charge
1 100000 0.000180556 -10000 90000 16.25
2 90000 0.000180556 200 90200 16.286111
3 90200 0.000180556 0 90200 16.286111 4 90200 0.000180556 400 90600 16.3583333
5 90600 0.000180556 0 90600 16.358333 6 90600 0.000180556 0 90600 16.358333 7 90600 0.000180556 1000 91600 16.5388889
8 91600 0.000180556 0 91600 16.538889
9 91600 0.000180556 400 92000 16.611111 10 92000 0.000180556 0 92000 16.611111
11 92000 0.000180556 75 92075 16.6246528
12 92075 0.000180556 0 92075 16.624653 13 92075 0.000180556 0 92075 16.624653 14 92075 0.000180556 1000 93075 16.805208 15 93075 0.000180556 0 93075 16.805208 16 93075 0.000180556 0 93075 16.805208
17 93075 0.000180556 0 93075 16.805208
18 93075 0.000180556 1000 94075 16.985764
19 94075 0.000180556 0 94075 16.985764
20 94075 0.000180556 0 94075 16.985764
21 94075 0.000180556 300 94375 17.039931
22 94375 0.000180556 0 94375 17.039931 23 94375 0.000180556 0 94375 17.039931
24 94375 0.000180556 1000 95375 17.220486
25 95375 0.000180556 650 96025 17.337847
26 96025 0.000180556 200 96225 17.373958
27 96225 0.000180556 775 97000 17.513889
28 97000 0.000180556 0 97000 17.513889
29 97000 0.000180556 0 97000 17.513889
30 97000 0.000180556 0 97000 17.513889
This would need to continue like this for the total time in the loan. I did this and came to a consistent negative balance at 959 days. 959/360 (financial days) = 2.66 years till payoff or 31.97 months or 30.07 months till the first time they are at a $0 Balance.
Interest cost $8091.96, at first $0 balance
Interest cost $8106.91, at consistent negative balance.
Calyx gave me an interest charge of $8586.27 (30 year scenario) or $8824.32 (30 year IO) for your scenario.
I have provided the excel sheet that I did for your review, to continue to be as transparent as possible. The explanation for the interest saving on the HOA and your scenarios is explained further below."
Please see my above reply as to the validity of your spreadsheet.
And I said I didn't want to talk about the liquidity song and dance. The reason after 31 months. You can't get any more liquid than "paid off"
"The answer to your first question, about how the balance is moving up and down. This is a occurance with the account, you can stop your direct deposits at anytime, they are not required. So you hit zero you can stop putting money into the account and would stop using the account as your primary banking relations ship (for daily transactions).
"
Once again you avoid the facts... or perhaps don't understand them...When does the interest get counted? Your spreadsheet does not account for it so therefore is misleading and incorrect. Of course I understand how the balance changes and that is my point... you need to account and factor in the interest charges... when you do that you will see that your program is more expensive and has no benefits to a borrower, even using you example... so you either don't understand what I am saying or you are willing to scam people out of their money.
"
Once again you avoid the facts... or perhaps don't understand them...When does the interest get counted? Your spreadsheet does not account for it so therefore is misleading and incorrect. Of course I understand how the balance changes and that is my point... you need to account and factor in the interest charges... when you do that you will see that your program is more expensive and has no benefits to a borrower, even using you example... so you either don't understand what I am saying or you are willing to scam people out of their money.
Livinginnky,
The quote was directly from the guidelines for the loan. It is required to sign up for a ID and password to get there. Nothing I can do about that and this is pretty common for most of the other lenders that we use.
900c3 and 900c5 are the program codes that put a limit to the upward movement of the loan. C3 has the intermediate rate cap for 3 years and C5 has the 5 year cap. Same verbage, but uses 5 instead of the 3 number.
Your question about rate movement. Yes I am verifing that the rate can go up and that their is no floor on this loan.
When the excel sheet is released you can verify my numbers for your next question.
Finally, liquidity song and dance. So how would you prefer me to talk about the cash being freely avaliable to the customer at any time? There is a major point that the customer is able to temporarily lower their balance throughout the month. They are effecting their daily balance but putting everything through the loan. A normal loan is an installment debt and has no way to pull the cash out if needed, Home Ownership Accelerator has that ability.
The quote was directly from the guidelines for the loan. It is required to sign up for a ID and password to get there. Nothing I can do about that and this is pretty common for most of the other lenders that we use.
900c3 and 900c5 are the program codes that put a limit to the upward movement of the loan. C3 has the intermediate rate cap for 3 years and C5 has the 5 year cap. Same verbage, but uses 5 instead of the 3 number.
Your question about rate movement. Yes I am verifing that the rate can go up and that their is no floor on this loan.
When the excel sheet is released you can verify my numbers for your next question.
Finally, liquidity song and dance. So how would you prefer me to talk about the cash being freely avaliable to the customer at any time? There is a major point that the customer is able to temporarily lower their balance throughout the month. They are effecting their daily balance but putting everything through the loan. A normal loan is an installment debt and has no way to pull the cash out if needed, Home Ownership Accelerator has that ability.
Yes but what I am saying is this... "you sell a home ownership accelerator" Correct? Available money has nothing to do with accelerated payoff. I don't want you to change the subject everytime I prove you wrong.
And you still haven't accounted for the missing interest charges in your spreadsheet. I have your spreadsheet in front of me now.
And you still haven't accounted for the missing interest charges in your spreadsheet. I have your spreadsheet in front of me now.
First, I am growing tired of your constant personal jabs at me.
I am here to explain the loan program and to clear up confusion. I would appreciate some common courtesy and avoiding the personal attacks.
The daily interest charges are calculated by the bank, this is done automatically and seamlessly. They take your end of day balance and calculate the interest that would be accrued on that day. That is totaled up and billed to the customer the following month. This is also why I broke the 6.5% interest into it's daily component of .000180556 on the excel sheet.
I am here to explain the loan program and to clear up confusion. I would appreciate some common courtesy and avoiding the personal attacks.
The daily interest charges are calculated by the bank, this is done automatically and seamlessly. They take your end of day balance and calculate the interest that would be accrued on that day. That is totaled up and billed to the customer the following month. This is also why I broke the 6.5% interest into it's daily component of .000180556 on the excel sheet.
Ok, but the interest is never tallied into the running balance. The balance magically stays at whatever the debits or credits are. When is the interest calculated. If you had a balance of $97,000 and paid interest for that day the next days balance would be $97,017.27. Or am I incorrect and the interest is added on later? On your spreadsheet the interest is never calculated into the running balance.
I too am growing tired of this. You continue to beat around the bush and are not answering a direct question. Where does the interest go? It is still there, you have to account for it... hence, you either don't want to OR cannot.
The interest is done automatically and seamlessly? Ok, but it is still there and it is not counted on your spreadsheet. So what do all those interest charges add up to, and when does that money get paid off?
I too am growing tired of this. You continue to beat around the bush and are not answering a direct question. Where does the interest go? It is still there, you have to account for it... hence, you either don't want to OR cannot.
The interest is done automatically and seamlessly? Ok, but it is still there and it is not counted on your spreadsheet. So what do all those interest charges add up to, and when does that money get paid off?
According to the CMG website in my state you actually charge a prepayment penalty. Is that not true of the accelerator program?
Whats also funny is I am now playing with the calculator found on the site you provided... and with the numbers we have been using in examples shows that the CMG plan would be paid off in 3.2 years. That is much longer than the info you provide. Could you explain the difference between what you are saying about CMG and what CMG's own website says?
:lol: :lol: :lol:
i love it great
like i said in my original post this whole thing is just a tax on mathematically challenged.
and it is something you can do on your own so long as you are responsible and passed highschool math.
Unfortunately not many people nowadays have the ability or discipline to see this through.
Oh and as usual i agree with Eric
i love it great
like i said in my original post this whole thing is just a tax on mathematically challenged.
and it is something you can do on your own so long as you are responsible and passed highschool math.
Unfortunately not many people nowadays have the ability or discipline to see this through.
Oh and as usual i agree with Eric
