Unless Bank of America is putting you into a Non-Conventional Loan (also known as Sub-Prime)....there is PMI with only 10% down. While it may not be seen as a payment per se, they will build it into the rate...thus a higher rate. As far as no fee mortgage loans, no closing costs loans, etc.....always remember Mortgage Companies & Lenders aren't Non-Profit Organizations. They are making their money somewhere and with these loans, it will equate to a higher interest rate. Depending upon how long you plan on staying in the home, would be one of the major determining factors in if this is the best program for you.
When mortgage companies don't charge points and fees they may either build them into a higher percentage rate or back end the costs to you at closing. If you are taking out a $300,000 loan and told to bring nothing to the closing :) look to see that your loan is not actually $310,000 with the $10,000 in actual closing costs built in :( . It's hard to know rates spreads and what you are actually getting is a good deal because it all depends on your credit scores and other variables. You should check with 2 or 3 lenders to compare apples to apples. Good luck with your mortgage hunting.
RE/MAX VILLAGE SQUARE
It appears the private investigator is only looking for evidence to not pay the PMI claim which BOA made on my mortgage. MGIC is who covers all of BOA's "No Fee Mortgage Plus" loans, at least up until recently. They try to find loan inconsistencies as grounds to reject the claim. I am informed by my attorney that I have no obligation to talk to these private investigators. All evidence is the MGIC's business plan involves battling these claims aggressively and not paying them, even if it means losing BoA's business.
During the short sale it became clear that there was mortgage insurance hidden in somewhere as even BOA negotiator said "of course there is PMI, you put no money down". HA HA. BOA are liars of course. Who expected less. Now, five months after the short sale closed, I am under investigation by a private investigative firm hired by the Mortgage Insurance company. They started by trying to get permission to verify previous tax returns through my tax accountant. Now they want to meet and talk to me. Lawyer representation looks like a reasonable course of action at this stage.
Any other experience from other "BOA's No fee NO PMI loan foks out there?
I guess that answers the question, eh?
No fee mortgages translate to a higher rate, that's the bottom line. Everybody makes money on loans, it's a matter of what your goals are in whether a 'No Fee Mortgage' makes sense for you. Also, bear in mind that to get the best rates the Market has to offer, PMI is mandated when you are borrowing over 80% of the Sales Price. Let me know if you have further questions.
Rebecca Ivanov, Helen Adams Realty, Charlotte NC
Great Question! You already have received 3 GOOD answers that address it well. Thanks for writing such a great qestion that will be helpful too many people.
This is the kind of interaction that Trulia wa designed for.
Bank of America is a huge corporation with a massive advertising budget. This catchy phrase is designed to get you talking about it, interested and ultimately sitting in a local branch signing loan papers. There will certainly be closing fees, such as title insurance, attorney, appraisal, taxes and the like. They are probably not charging an underwriting fee which typically is around $700. By increasing the actual interest rate on the loan BofA is offering you what is called "lender paid mortgage insurance". Both PMI and lender paid MI can be tax deductible (ask an accountant), the difference is PMI can be removed once the value of your home is greater than 80% of the outstanding balance of the loan.
There's no such thing as a free lunch!!! YOU always pay for it somewhere.