The mortgage business has been a hot topic lately after the recent fallout of subprime lenders and the restrictions put on them by the federal government. It was only a matter of time before the government started putting their hand in this market, because it was being abused by mortgage loan sharks. I am not a proponent of the government sticking their nose in everything, but there comes a time when the government needs to help protect its citizens. I think that consumers need to take the time to educate themselves more before signing the dotted line on a certain mortgage, but banks and subprime lenders need to have a responsibility to give loans only those that can truly afford to pay them back.
Bank of America and ING Direct are two companies that have stepped it up in the world of mortgage lending. It pains me to say that Bank of America actually did something right, but I have to admit that they finally made a decision that benefits their customers. Both companies will start offering low closing cost mortgages with competitive interest rates. Here’s a breakdown of what they are offering:
Bank of America
- BOA is now offering a no-fee mortgage
- This includes no appraisal, title insurance, loan origination, or application fees
- They are also not charging Private mortgage insurance! That part really excited me. I think PMI is ridiculous. The company shouldn’t take on the loan risk if they think you’re going to default on the loan.
- The program does not cover refinancing, only new purchases.
- The difference with the ING mortgage is that it’s usually a 5/1 or 7/1 ARM.
- They boast a 5.5% interest rate, but again, this is for an ARM.
- $895 closing costs for houses less than $500,000!! Plus any applicable taxes and odd days’ interest
- They guarantee their rate for 60 days
- They require you to use one of their approved title companies.
If you’re interested in saving some big money in closing costs, check out these two programs. The reason I was interested is that I am looking to buy a house soon, and I HATE paying closing costs. I usually try to get the seller to pay them, and this may be an extra incentive to get them to pay for it if they know the costs will be cheap. You should never have to pay for points or origination fees. They are just fancy words for pre-paid interest. We’re in a buyer’s market, so put in your negotiating hat and see what kind of deals you can get!
Does anyone else know any companies offering similar mortgage programs?