Desoto County Mississippi Real Estate
is calling you home
Desoto County Mississippi Real Estate
Hernando, Olive Branch, Southaven, Nesbit & Walls in Desoto County
Mississippi
| Q: | What about these ads for no-cost loans? |
| A: |
In many
states,real estate regulatory agencies are cracking down
on such advertising. The very term, "no-cost" loan, is
misleading because borrowers are actually paying a
higher interest rate in exchange for not having to pay
fees or closing costs up front when the loan is secured.
A "no-points" loan is one for which the lender does not charge points (one point is equal to 1 percent of the loan amount). But there are other fees involved in no-point loans, as with most loans. |
| Q: | Is there such a thing as a no-cost or no-fee loan? |
| A: |
No. While some
lenders occassionally promote "no-cost" loans, banking
regulators have cracked down on these
misrepresentations. Advertised "no-fee" loans may
actually cost the borrower more over the long term
because these costs are often rolled into the new note
through higher interest or more principal.
A typical no-feeloan is one where the points charged and all fees are included in the loan principal, meaning that the borrower does not pay these expenses at the close of escrow, but instead ends up paying on them over the life of the loan. The loan is called a no-feeloan because the borrower is not charged any fees up front. |
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|
Cara O'Bryant Realtor Associate Licensed in Mississippi & Tennessee 901-212-0047
Bob Leigh & Associates Realtors,
LLC |
