bank of american has a special offer on home loans which includes, $0 application fee, $0 closing fees, and no private mortgage insurance ...has anybody used this deal from bank of american to buy a home and is it really true? or are there hidden fees? and they say it could save me thousands is this true?
2007-07-17 08:35:56 · 4 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
no i dont work for them ...but im going to buy a home and i wanted to see if i should consider them to get my home loan
2007-07-17 08:42:33 · update #1
I'd consider it. But only if you're quite certain you won't be in that home or in that loan for more than a few years.
BOA can't get the state to waive their taxes, or the title insurance, or anything other 3rd party cost. They still have to pay those items.
So, if they don't charge it to you directly, they only way to pay for it is to charge a higher interest rate.
You could save thousands, but every month that goes by, your "savings" is reduced by the higher interest you pay.
There's nothing new here. I've been doing "no-cost" refinances for years. All that means is that I charge a higher rate, and pay your costs for you from the rate spread premium I get for delivering a loan at a higher rate.
This is great if you won't be in the home for longer than about 5 years, in most cases. In that case, you'll have just about broken even on the costs, really.
The only way to compare this is to get quotes with you paying costs (and presumably getting a lower rate), vs. BOA's all-inclusive offer.
Compare the two monthly payments. Let's say you finance $200,000 at 6.5% paying costs, 7.0% from BOA with no costs. At 6.5%, your payment would be $1264. At 7.0%, it's $1330.
A total difference of $66/mo. in higher interest. Closing costs on $200K would likely be about $4500 in most areas. $4500/66 = 68 months to break even.
That's 5 years, 8 months of time before the higher rate becomes the more expensive choice. Statistically, over 90% of all mortgages are paid off within 5-7 years, either through a refinance or sale.
But, if you're one of the rare few that keep your loan all 30 years, you'll have 292 extra payments of that $66/mo, ultimately costing you an additional $19,272 in interest over 30 years.
So, could they save you thousands? Maybe. But only if you pay off their loan in the first year or two. If not, they might really cost you tens of thousands.
PS the fact that they don't post their rates online, to me implies that they know they're overcharging.
2007-07-17 10:46:09 · answer #1 · answered by Yanswersmonitorsarenazis 5 · 0⤊ 0⤋
I am a in the mortgage business and have been for many years.
There can be hidden fees, you need to look at your paperwork for that. You see, if they are soliciting you directly they get paid on the interest they get on your loan. Will they be servicing it as well? or will they sale your loan? These are the questions you have to ask in order to get the accurate answer.
I work with B of A and they are a good lender. Sometimes we get better rates then their own reps can offer.
Please never just listen to what someone says. And even if you get it in writing, it can change. I know.... it's very difficult to determine, what's real and what is not.
0.00 application fee is a silly fee and shouldn't be charged any way. So that's not a big savings.
0.00 closing fees. Remember closing fees are origination. You will still have to pay lender, escrow, title, taxes etc. So don't be fooled by that statement.
No private mortgage insurance means you have less than an 80% LTV, which means you can go to any bank and not be charge that. That is nothing special either.
Don't be fooled by clever advertising. Find someone you can trust and that YOU are comfortable with. If you feel as though you are being rushed, don't work with that agent.
Hope this helps!!!
ML
http://www.myfinancialcorner.com
2007-07-17 08:51:07 · answer #2 · answered by Anonymous · 1⤊ 1⤋
PMI (mortgage insurance) is mandatory with any loan where you don't put down at least 20% of the purchase price. There is no way you can have $0 closing costs, but what they will do is roll those into your loan, which means you will be paying interest on this for many years. Not a good deal at all. And FYI - there is never an 'application fee.'
2007-07-17 08:46:24 · answer #3 · answered by Enchanted 7 · 0⤊ 0⤋
Do you work for Bank of America? Sorry , your question sought of sounds like an advertisement for Bank of America.
2007-07-17 08:41:04 · answer #4 · answered by yeah , yeah whatever 6 · 0⤊ 0⤋
I've had a couple of loans with B of A over the years. Service was pretty terrible in my case. They had problems getting payments properly credited to my account(s) numerous times. I'll never do business with them again.
2007-07-17 08:48:43 · answer #5 · answered by Bostonian In MO 7 · 1⤊ 0⤋
Bank of America is a rip-off and a joke with all of their services. I would run as fast as I could from those people.
2007-07-17 08:41:19 · answer #6 · answered by sortaclarksville 5 · 1⤊ 0⤋
the ACORN program is only for first time homebuyers, and is not very strict on prequalification requirements.. BA is a direct lender, but they work with mortgage brokers too.. if you get tied up with BA, you'll be offered their limited in-house loan programs only, while with a broker, you'll have access to hundreds of loans (including that of BA) you qualify for to get the best rate and technically save more money in your pocket..
2007-07-17 09:13:38 · answer #7 · answered by just4success 2 · 0⤊ 0⤋
i live in san diego and YES they have this deal...and believe it or not...it is offered to illegals coming across the border. there has been a lot in the media about it and many uprisings by the citizens in california.....
:(
2007-07-17 08:50:28 · answer #8 · answered by Blue October 6 · 1⤊ 0⤋
If you are talking about their ACORN program, it seems to be a pretty good option
2007-07-17 08:45:14 · answer #9 · answered by Anonymous · 1⤊ 0⤋