Bank of America no Cost Mortgage?

I was in my Bank of America branch yesterday setting up a new checking account. I noticed a sign in the lobby touting a no cost mortgage. I inquired with the personal banker about the details of the mortgage. He told me that they just raise the rate to cover the closing costs. I said to him that it doesn't sound like a no cost mortgage because there is a penalty in rate for the no closing cost option. I also said that if it were a true no cost mortgage then it should be the same rate as the full fee mortgage. He did not have any comment on that. My guess would be that there is no such thing as a no cost mortgage. Thanks BofA for confusing me.

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Countrywide advertising can be deceptive?

I just saw an advertising on the MSN homepage for Countrywide that the key interest rates have dropped and it is a good time to refinance your home. This is the biggest blatent lie by a bank that I have ever seen. First of all there is no such thing as a no cost mortgage and secondly what the Federal Reserve is doing with interest rates has nothing to do with mortgage rates. If this were the case, the 30 year rate would be below 3%. Interest rates have everything to do with how the stock market is doing and not what the feds are doing. Shame on Countrywide for being bozos.

Shame on you Countrywide for slick advertising. Consumer Dave to the rescue.

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Truth in Lending

The truth in lending is that the banks make a crap load of money off of you. If you have a $100,000 and you pay back $330,000 on over 30 years, where is the 6%? Well the truth is that you pay back thousands of percent in the first few years of your loan. I'm not saying that borrowing from a bank is bad, it is what it is. We wouldn't have the lifestyle in our country if money wasn't readily available.

The other truth is that most loan officers don't know how to fill out the form. So the intended use of the TIL or truth in lending is not even met in most cases. The idea of the TIL is that a consumer has the ability to compare mortgage rates side by side with different lenders. It really doesn't work the way it is set up now. You really need to do your homework and compare when you are looking for a mortgage.

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The Fed Rate Cuts wont help you

Yeah the Federal Reserve lowered their rate again. That's good news for the bank and not necessarily good news for you. The Fed lowered its rates by 75 basis points yet mortgage rates only dropped by .25%. The banks make out on this. They will make more money. Also be wary of slick marketing telling you that rates have really tanked, they haven't. It's just slick advertising.

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