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How does Preserved Asset Mortgage work?

The Preserved Asset Mortgage only takes a few steps:

The initial requirement includes an amount to allow for fluctuations in the securities' market value. However, if the value of the securities should decline below a minimum level , you may be required to deposit additional cash or additional securities. If you cannot do so, all or a portion of your collateral may be liquidated. A forced liquidation could also trigger a potential taxable event.

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How much do I need in securities?

The amount of collateral required will depend on various factors, including the type of securities you wish to pledge as well as the terms of the transaction. The requirements will vary depending on the loanable value of the securities to be pledged.

For example, for a $500,000 home, a 20% cash down payment would be $100,000. If you plan to pledge securities instead of paying cash, you would pledge approximately $165,000 in eligible stocks.

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When used wisely, borrowing can be beneficial to total wealth management. A Smith Barney relationship does not have to be established or maintained to obtain the products or pricing offered as part of the Smith Barney Home Loan Program at Citibank. Home equity programs not available in AK.

A default (stopping monthly payments) on a mortgage could result in the loss of pledged real estate, securities or both. Smith Barney policy does not permit clients to use the proceeds of a home loan to invest in the securities or related markets. Your Financial Advisor may receive compensation in connection with this lending program. Affiliates of Smith Barney may earn fees in connection with the funding, origination, and sale of a loan. Citigroup Inc., its affiliates, and its employees are not in the business of providing tax or legal advice. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any such taxpayer for the purpose of avoiding tax penalties. Tax-related statements, if any, may have been written in connection with the "promotion or marketing" of the transaction(s) or matter(s) addressed by these materials, to the extent allowed by applicable law. Any such taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor. Preserved Asset Mortgage not available in AL, MS, and MT. Preserved Asset Mortgage loans can be up to 100% of the purchase price or appraised value, whichever is lower. Preserved Asset Mortgage through Citigroup Private Bank not available in AZ or MT. Borrowing against securities may not be suitable for everyone. If the value of the securities should decline below a minimum level, clients may be may be subject to a collateral call without specific advance notice, requiring clients to deposit of additional cash or securities. If clients cannot do so, all or a portion of the collateral could be liquidated, and a potentially taxable event could result. The allowed holder is not entitled to choose which securities are sold or any extension of time to meet a collateral call. A mortgage default could result in a loss of the residence and the securities collateral A concentrated portfolio holding a single or a few securities may be subject to greater risk of a collateral call than a diversified portfolio; a diversified portfolio will tend to be less subject to a sharp decline resulting from the negative performance of a single security. Taking out a larger mortgage results in larger mortgage payments. Preserved Asset Mortgage is a registered service mark of Citigroup Global Markets Inc. All home loans/lines are made by Citibank, N.A., or CitiMortgage, Inc., equal housing lenders, and are subject to Citibank and CitiMortgage's mortgage qualifications. CitiMortgage does business as Citicorp Mortgage in NM. In CT and NJ, Citigroup Global Markets Inc. is the BROKER ONLY, NOT THE LENDER. Citigroup Global Markets Inc. is a registered mortgage broker, NYS Banking Department. In AZ Citigroup Global Markets Inc. is a licensed Mortgage Broker (Lic. No. 0903067). Citigroup Global Markets Inc., Citibank, N.A, and CitiMortgage, Inc., are subsidiaries of Citigroup Inc. Investments held at Smith Barney are not FDIC insured, not bank guaranteed and may fluctuate in value including loss of principal.

For more information, please contact your Financial Advisor.

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