lake norman real estate

No Fee Real Estate Mortgages…are they for real?

When one of my buyers first told me he was going to get a no fee loan from Bank of America I must be honest, I got very nervous. Historically, working with Bank of America’s mortgage loan division has been challenging. Plus, when something sounds too good to be true, it probably is too good to be true; right? I kept waiting for the other shoe to drop as we went through each step in the process. The initial loan application went smoothly. Okay, so then I was concerned the appraisal would be problematic or the time it took to get a loan commitment letter would be delayed. Much to my surprise, the appraisal was done promptly and came in slightly over the purchase price and we got final loan approval on time as well. Surely there will be trouble with the loan docs? Nope, everything came in on time and the communication was excellent.

When I received a copy of the HUD Settlement Statement I was truly blown away. My client had to bring a total of $86.30 to the closing! Even though this was a 100% loan there was no PMI and no loan fees whatsoever. Since we had asked the seller to pay $3000 in closing costs my buyer was even able to buy-down his rate to 6.125%! The only settlement charges were one year of hazard insurance, the interest due through the end of the month and the usual attorney and title insurance fees. We closed on time without a hitch.

Because in North Carolina one of the agent’s responsibilities is to proof the HUD Settlement Statements, we tend to have a much greater working knowledge of closing fees than we did in California. I compare my clients closing statements to see who provided the best rates and the least amount of fees and discount points and pass this information along to future clients. Now, I can’t guarantee that everyone will have the same experience we did. But, I will certainly be recommending that my future buyers at least check out this B of A No Fee Mortgage Plus program.

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