No Closing Cost Loans

Reblogger Gail Robinson
Real Estate Agent with William Raveis Real Estate RES.0772823

Buyers are often stretching their budget when purchasing a home and the "no closing cost loans" are appealing, but remember the old adage, if it seems too good to be true...

Original content by George Souto NMLS #65149

There is very little humor in what is happening in the Real Estate Industry these days, but I have to admit I do get a chuckle out of the Ad’s that I hear on the radio from Internet Lenders.  Their Ad’s are usually about two topics, unrealistic interest rates and unrealistic Closing Costs. 

 

Lately the Ad’s that Internet Lenders seem to be flooding the air waves with, are the ones claiming to have NO CLOSING COST LOANS, or extremely low Closing Costs.  Being a Loan Officer, I know what makes up Closing Costs, and I know that there are Closing Cost that there is no way that a Lender can exclude, because they are Costs that are controlled by others.  Example:

 

  • Taxes:  Taxes are going to be collected by the town no matter who the Lender is.
  • Homeowners Insurance:  Properties need to be insured for fire, theft, property damage, and personal injury. 
  • Attorney Fees:  Connecticut is an Attorney State, meaning that an Attorney is going to do the Closing & does the Title Search.
  • Title Insurance:  Title companies do not provide their service for nothing.
  • Recording Fees:  The Town Clerks Office is going to charge the Attorney to record the Deed on the land records, and I don’t know of any Attorney that is not going to pass on that charge.
  • Appraisal Fee:  Once the appraisal is done the Appraiser wants to be paid right away.
  • Points:  There are points that are not associated with the interested charged by the Lender.  Those points are assessed by Fannie Mae, Freddie Mac, and FHA.  These points are because of low credit scores, the Loan To Value, or for non-owner occupied properties to name a few.

 

There could be other fees that are out of the Lenders control, but these are the most common.

 

The Lender may waive their:

 

  • Application Fee
  • Processing Fee
  • Points
  • Escrow Fee

 

But these are minor compared to the ones previously mentioned, and most of the time will add up to less than $1,000 if they charge them.  While the Fees charged by others, can add up to several thousand dollars.  I have often wondered how they explain the thousands of dollars that the Borrower will have to pay at the Closing after they have tricked them into applying for a NO CLOSING COST LOAN.  I would love to be on the phone when they give the Borrower the real figure.  Better yet I would love to be looking at their face when this news is delivered.

 

Are people really that gullible that they will fall for these advertisements, and still go through with the Closing when they find out differently?  I would love to talk to someone that has fallen for one of these scams, but I wonder if any of them would admit to it?

 

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Who To Call For Your Mortgage Needs In Connecticut:

 

George Souto NMLS# 65149 is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308  gsouto@mccuemortgage.com, or visit my McCue Mortgage Homepage.

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Gail Robinson

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