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Bank of america home loans? |
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? 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. Source(s): 10 years in mortgage banking Do you work for Bank of America? Sorry , your question sought of sounds like an advertisement for Bank of America. 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. If you are talking about their ACORN program, it seems to be a pretty good option 20+ years as a direct mortgage lender (no, not for B of A) 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.' |
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