| No Closing
Costs, No Points, No Fees - Home Loans Sounds too good to be
true doesn't it? No closing costs is very good but add no points
and no fees to your next refinance or purchase home loan and
you've really got something. There is a reality to no closing cost
home mortgages. In fact, virtually any type of home loan can be
accomplished with "no closing costs". The question is are these
loans right for you?
Here is one thing that you will find from us, at no cost or
obligation to you, about the costs of no closing costs home
mortgages. There are closing costs and you pay them one way or
another. You should be given the facts and the power of the
knowledge to make the best decision for yourself.
But I would not have you deceived.
Here is the simple truth and any lender, broker or funder who
tells you differently should have their integrity and honesty
called into question. Every lender and anyone between the lender
and you make their money from the points and fees charged to you
(or your seller) for the use of their services.
I know there are some national lenders like Countrywide saying
they have no fees but the truth is they do have fees. If they hold
the loan to service they are charging a fee above their cost of
the loan. If they are selling that loan they are earning a Service
Release Premium or "haircut" or some other way of earning income.
It seems that the intention of these ads from people like John
Shibley who are accusing every other lender of being "rip-offs" is
solely to deceive the borrower into believing that (a) only the
company making the claims can provide this service and/or (b) you
are actually getting all those services for nothing and that the
advertiser isn't making any profit from the deal. Both are untrue.
Now The Truth
It may be that one of these types of loans is good for you.
That is the only time I want you to use it. Unfortunately many
lenders use these types of loans to make a small fortune from you.
The first thing you must know is that any loan which promises
salvation from these fees also comes at a price and that price is
a higher interest rate. The second thing you must know is that
interest on mortgages is "front loaded" meaning you pay the
interest first before you pay the principal (or actual cost of
your property). In other words the first payments you make on your
real estate don't go toward lowering the payoff amount but rather
almost exclusively to the interest you are paying on the loan used
to finance your real estate.
We Americans say, "my house payment is $1200 per month". In
reality our house payment is probably $90 per month and our
interest payment is $1110 in the beginning and slowly ... after
months and years it starts to turn toward your favor.
So the question is, "How long to you intend to keep this loan?" |
