Bank of America - No Fee mortgage? (PMI, loan, interest rate)

[wankel7]

Well, I had heard about this so I went and checked on it and got pre-approved today for one.

Looking to get a 123,500 loan, my fico is 770, and 5% percent down. That yield a 6.750 rate and 6.777 APR.

I had asked her about the cost of points and she generaly it is about 1% of the loan for one point.

I had been quoted from a few other lenders at 6.25 percent so the BOA deal is a bit higher. Although, the large amount of money I would save by not having closing costs....I could use some of that savings to buy .5 point to bring the loan down a bit.

Here is a link to BOA info on it:
http://www.bankofamerica.com/loansandhomes/index.cfm?template=closing_costs]Bank of America | Please Select Your State (broken link)

It seems that the way BOA gets theirs on this is this...they don't sell the debt...they will hold on to the mortgage. She explained that other mortgage companies will most likely sell off your mortage. And closing costs are their best upfront way to make money off of you.

Anyways, what are your thoughts on this BOA deal?

Thanks!

James

[sierraAZ]

I've read it's a genuine deal. I looked into it, too. It doesn't apply to new construction.

[rwally]

BoA wants mortage customers because they can sell them an average of five other financial products that will produce more profit than the mortgage.

[renriq02]

i used to work at BofA...
we used to sell the pitch that mortgage companies 'sell off' your mortgage.
I learned that it doesnt make a different, because the payments/terms dont change. You just send a payment somewhere else!
BofA does sell their loans....if they didnt they wouldnt make you sign the disclosure saying that they have the right to sell it!

you cant compare the 6.25% with other lenders to the 6.75% with BofA.
I'm a broker, and im telling you that you will be paying PMI on the 6.25%

I think with the 6.75% you will not be paying PMI.
although this is a better deal....i thought they had a NO FEE mortgage???

read about the 6.25% and look at the PMI payment.
compare it with the payment on the 6.75%
ALWAYS EXCLUDE TAXES, and homeowners insurance
only compare principal/interest and the PMI payment.

then compare closing costs from the lender not 3rd parties.

read the disclosures!

Originally Posted by wankel7

Well, I had heard about this so I went and checked on it and got pre-approved today for one.

Looking to get a 123,500 loan, my fico is 770, and 5% percent down. That yield a 6.750 rate and 6.777 APR.

I had asked her about the cost of points and she generaly it is about 1% of the loan for one point.

I had been quoted from a few other lenders at 6.25 percent so the BOA deal is a bit higher. Although, the large amount of money I would save by not having closing costs....I could use some of that savings to buy .5 point to bring the loan down a bit.

Here is a link to BOA info on it:
http://www.bankofamerica.com/loansandhomes/index.cfm?template=closing_costs]Bank of America | Please Select Your State (broken link)

It seems that the way BOA gets theirs on this is this...they don't sell the debt...they will hold on to the mortgage. She explained that other mortgage companies will most likely sell off your mortage. And closing costs are their best upfront way to make money off of you.

Anyways, what are your thoughts on this BOA deal?

Thanks!

James

[sierraAZ]

Originally Posted by banker0679

read the disclosures!

Yeah, some of the disclosures were kind of disturbing, but since I couldn't consider it anyway, didn't look more thoroughly into it.

[renriq02]

what was disturbing?

Originally Posted by sierraAZ

Yeah, some of the disclosures were kind of disturbing, but since I couldn't consider it anyway, didn't look more thoroughly into it.

[nytosc]

I agree with banker0679. Anytime you go over 80 % loan to value, the lender will add mortgage insurance. They have borrower paid MI that is added to your monthly payment and lender paid MI that increases your interest rate by .5 or 1.0 %. The deal with a no cost purchase or refinance, instead of the lender taking the fees upfront, they increase your upfront rate and make the money over the life of the loan. Remember most fees attached to mortgages are atx deductible. There are not too many things that are anymore. Good Luck for a Mortgage Man in SC.

[wankel7]

Yeah what was disturbing?

You are right...BOA is NOT charging PMI on this type of mortgage product!

Almost to good to be true....if it wasn't coming from such a large company I would say it is.

I talked with a lender tonight (lendingtree.com call) and he could do 6.125. Basically, after I would pmi with him....his mortgage would be 100 bucks less a month. So, with that lower rate it would take maybe 3 or 4 years to break even on the lack of closing costs with BOA.

James

[renriq02]

i worked at bofa for almost 3yrs....worked at lendingtree for 1yr.

tell me the PMI quote..and i will tell you he's correct.

I REALLY DOUBT THE PAYMENT IS LOWER paying PMI...than the 6.75%

Hey I work as a broker...and dont work for either, but i dont like it when ppl get pushed around!

Originally Posted by wankel7

Yeah what was disturbing?

You are right...BOA is NOT charging PMI on this type of mortgage product!

Almost to good to be true....if it wasn't coming from such a large company I would say it is.

I talked with a lender tonight (lendingtree.com call) and he could do 6.125. Basically, after I would pmi with him....his mortgage would be 100 bucks less a month. So, with that lower rate it would take maybe 3 or 4 years to break even on the lack of closing costs with BOA.

James

[wankel7]

The funny thing about my hour convo with the broker thru lending tree...

I spent at least 30 minutes of that convo talking about the BOA product and emailing a link to him about it. He was surprised that BOA was offering this product and not making you pay PMI.

BOA 123500 loan @ 6.75% for 30 years is about 800 a month.
Him 123500 loan @ 6.125% for 30 years is abotu 750 a month. He said his pmi would be about 80 extra per month.

Yeah, looks like BOA is the short term winner.

James