Just saw a big ad in the WSJ:
http://bankofamerica.com/nofeemortgageplus
$0 Application Fee
$0 Closing Fee
$0 Personal Mortgage Insurance, even if loan amount is more than 80%.
They claim interest rates are the same as other products.
Can someone find the catch?
I work at bofa. the rate stinks on the no fee mortgage
Their interest rates are HORRIBLE!! That's how they make up for the 'no cost loan'..
30 year fixed for NC is 6.125% WITH 1 point.. HORRIBLE
5/1 ARM for NC 6.125% WITH 1 point.. HORRIBLE
For comparison: I'm going with Penfed and just locked a 5/1 ARM at 5.5%, NO POINTS, NO CLOSING COSTS..Free 90 Day Lock!!
BoA blows..
I find their "best value guarantee" interesting.
"... if you can find a better deal anywhere and close, we'll give you $250."
So they'll pay you to take your business elsewhere?
discoganya said:Just saw a big ad in the WSJ:
http://bankofamerica.com/nofeemortgageplus
$0 Application Fee
$0 Closing Fee
$0 Personal Mortgage Insurance, even if loan amount is more than 80%.
They claim interest rates are the same as other products.
Can someone find the catch?
whatever is the catch, get a 0 discount points, 0 origination points , No Pre-payment Penalty loan with 0 closing costs (Better, if they offer negative points) and refinance at the earliest.
You have to be eligible to join penfed and I dont think I am.
what's so good good about penfed's mortgage?
I think all you need is to make a $25-$50 donation to some kind of military support organization to be a member.
ecomajor said:You have to be eligible to join penfed and I dont think I am.
ANYONE can join Penfed.. It's $20 to join some military orginization.. NO, you don't need to have any military in your background to join...
Penfed right now is offering a 5/1 ARM at 5.5%, no points, no closing costs, and a free 90 day lock.. EXCELLENT customer service.. I don't think anyone can beat that right now..
15 year fixed is 5.625
30 year fixed is 6.00
Any link to a valid org to join. Asking because I dont want to just waste $20 on any org to find out that I still dont qualify.
pmkm said:Any link to a valid org to join. Asking because I dont want to just waste $20 on any org to find out that I still dont qualify.
http://www.nmfa.org/
pmkm said:Any link to a valid org to join. Asking because I dont want to just waste $20 on any org to find out that I still dont qualify.
Then join nmfa through penfed. Make your opening deposit and nmfa membership fee with one payment and know that penfed recognizes you as an elgible member.
Interesting article in yesterday's American Banker about B of A's strategy here:
B of A: No-Fee Mortgage Is a Balance Sheet Play
My favorite part is where B of A says, though interest rates will be "competitive," the mortgage "is not about interest rates; it's about value."
TiteArse said:Their interest rates are HORRIBLE!! That's how they make up for the 'no cost loan'..
30 year fixed for NC is 6.125% WITH 1 point.. HORRIBLE
5/1 ARM for NC 6.125% WITH 1 point.. HORRIBLE
For comparison: I'm going with Penfed and just locked a 5/1 ARM at 5.5%, NO POINTS, NO CLOSING COSTS..Free 90 Day Lock!!
BoA blows..
I work in the mortgage industry (Loan officer) and disagree with you in saying the product is horrible. First, PenFed is NOT no closing costs. Its no lender fees (and no closing fee if you use their settlement agent)and Bank of America from what I understand pays Title Fees and Title Insurance. Second, their product goes up to 95% with no MI. With PenFed, you will either have mortgage insurance or have to split it up and you will have .25 for having CLTV of 95%.
So lets compare payments on a 380K loan with 95% LTV:
Penfed 95% at 5.875, .625 Point
Payment (PI)= $2247.84
Mortgage Insurance (assuming standard rates)= $247.00
Total= 2494.84
PenFed 80/15 at 5.875 with .625 (discount)+ .250 (for CLTV of 95%)
Payment (80%): 1892.92
Payment (15% at 9.49% converted to 30 YR amortization) =$404.07
Total= 2396.99
BofA No Fee 95% at 6.125, 1 Point
Payment (PI)= 2308.92
Mortgage Insurance=0
Total= 2308.92
The cost of title insurance differs by state but on the above example of 400K sales price, it would be around 1700 for Maryland (which equals about .44 in points). This would have to be added to PenFed to level the fee aspect making PenFed more expensive in these scenarios.
So not only does the Bank of America come out with a lower payment, it would technically have slightly less in fees (and pretty significant difference when doing an 80/15/5). Even if we assume a rate of 8% on the second mortgage which is good for 95% CLTV, the BOA scenario wins with both payment and fee. So not only does it not suck, it in my opinion is significantly better than what PenFed can offer in certain scenarios.
I have heard the rate is 5.875 on a 30 YR with 1-1.5 Points so if I reworked the scenarios even more, its becomes even more lopsided in BofA's favor.
I think you would be missing the point of doing the program if you were doing an 80/15. The point of the program is one loan with NO MI and No Closing Fees. I can't really analyze it that well because I dont work with BofA but contrary to what others are saying, its a very good program for certain scenarios.
I too am a loan office for a large mortgage company. You are just about correct except the BIG hitch w/ b of a here is on deals over 80% ltv...they DO jack up the rate...aka LPMI...which is a total farce now that MI is tax deductible for most people. Any deal can be structured to match b of a gimmick. no origination fee, but there ARE discount point(s). From the few GFEs I have seen I would only need to eat $500 of fees to match (and I routinely do in this market).
its all packaging.
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