Free mortgage closing costs and no PMI?

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I have an offer in the mail from Bank of America, a house (which I need with other lenders, because I do 20%) of loans without closing costs and no need for private mortgage insurance will angeboten.Nun that much, and I read the fine print and nothing appeared to me. Does anyone have experience through this type of loan with Bank of America? Is there a flaw, I see?

  1. Reply
    May 16, 2011 at 4:02 am

    There is fine print…somewhere. Be cautious.

  2. Reply
    May 16, 2011 at 4:57 am

    they are using lender paid MI and jumping your rate quite a bit as all lenders have cost involved and they have to get it somewhere –MI on a purchase is tax deductible and you may be better off for it rather than paying through the nose in rate. You must be putting down the bare bones minimum
    I am a mortgage banker in TN & KY

  3. Reply
    May 16, 2011 at 5:44 am

    No closing costs???? What planet is this bank from? This is a classic case of “if it sounds too good to be true…” I have not seen the offer but I am sure that there is money to be made by them somehow, it is just that you don’t see it because they have hidden it. Perhaps higher interest rates and stiff prepayment penalties. I guarantee you that they do not work(or lend money) for free which is what they are trying to convince you that they do.

  4. Reply
    May 16, 2011 at 6:35 am

    I would be questioning the origin, it sounds like it is not BofA.

  5. Reply
    May 16, 2011 at 7:01 am

    It’s likely a loan with an exhorbitant interest rate where your MI is included in your payment (lender paid MI). There’s also probably fine print stating that if you refinance within the next 3-5 years you have to pay them back all the closing costs. And once you realize you got screwed on the rate, borrowers usually try to refinance then realize they have to pay back the $ 5,000 or so in closing costs.

    Wells offered me a similar deal (my LTV is curretnly 85%) and there was definitely fine print.

    If you can afford a regular 30 year fixed mortgage and have good credit, I would take it. You should be able to get 90-95% financing if you have excellent credit.

  6. Reply
    May 16, 2011 at 7:47 am

    I’m aware of this loan program as I have recently lost some of my business to BofA for the no cost/noPMI mortgage loan. I’m a Texas loan officer for a broker and thought at first it must be a “bait and switch” offer to existing BofA clients, but it’s actually not entirely half bad.

    You need 10% down and must be a BofA customer; your rate is only slightly higher than I could offer a borrower in Texas.

    The caveats are you can actually save money by negotiating a lower rate with competitive closing costs versus “financing” the costs into your rate, such as with a broker who has access to hundreds of lenders, banks and investors.

    Also – BofA is very conservative on qualifying borrowers, if you don’t fit their template or mold, then you’ve wasted precious time when you learn you don’t qualify (which by the way doesn’t mean you don’t qualify for a home loan, just not for that one) and could result in losing your purchase home contract terms or cost you more to start over elsewhere.

    On a personal note, BofA is a rough company to work with, they deal in strictly profit margins and to give them a huge financial part of your life (i.e. your mortgage) is a big commitment – so if you’ve ever had issues on small items like checking accounts fees, NSF charges or loan denials, think carefully.

    If you are in Texas and would like to consider using a mortgage broker, check out my site if you want? – you can bop around without any hassles.



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