No Closing Cost++ Home Refinance Loan!

By
Mortgage and Lending with Plattsburgh Mortgage Company NMLS# 112961

"No Closing Cost++ Home Refinance Loan.
Call Today to Combine Mortgage and Debt."

I found this enticing headline today on a one of countrywides websites. This cracks me up because I have been talking about this for some time. It makes me wonder though, if it is presented this way is the consumer happy when they get to the table?

I give quotes to people everyday and I always hear "hmm... your closing costs seem high" and it no longer blows me away when I hear this statement. My closing costs are very low compared to what I have seen out there and I have seen a lot out there. True, I am working to make a living and I do have to charge something for my efforts but I charge a very reasonable, honest, and fair fee. I usually charge my fee on the front end if the borrower can afford to do so, if not I utilize YSP to assist in covering the cost of the work that I will complete for the borrower.

No closing cost loans do not exist. Either you pay the closing cost up front and take an attractive interest rate or you take a hit on rate and pay for the closing over the term of the loan. It makes much more financial sense to pay them up front as they will be much lower than if you pay and extra .5% interest over the course of the loan.

By the way, Here's the footnote from the page that the headline was seen;

++ Affects pricing. With the No Closing Cost Option, borrowers finance the closing costs instead of paying for them at closing. Borrowers who pay closing costs at closing may qualify for a lower interest rate.  Some upfront fees (ex. credit report and appraisal) may apply and may be credited at closing. Call for details

 

PS: I do not charge for a credit report.

 

 

Posted by

Christopher Ohlsen

37 Boynton Ave, Suite 5

NMLS# 112961

518-324-5512 (Office)

518-565-0799 (Cell)

www.plattsburghmortgage.com

chris@plattsburghmortgage.com

Plattsburgh Mortgage Company Logo

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Tags:
adirondack mortgage
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Anonymous
Anonymous
Anonymous
They will have so many ways out it will be hard to read.  They are just trying to get at bat with the consumer.
February 21, 2008 02:46 PM #1
Anonymous
Anonymous
Anonymous

good old marketing tatics

February 21, 2008 02:47 PM #2
Rainmaker
33,389
Matthew Ricker
Keller Williams - Portland, OR
I have been hearing alot of these ads on the radio lately regarding no closing cost loans.  I almost called to get the full story.  I admit it is tempting to some peoplewhen you see the costs associated with closing.
February 21, 2008 03:10 PM #3
Rainer
103,798
Rosario Lewis
DDR Realty - Newburgh, NY
GRI, SRES - DDR Realty - Orange County, NY
That many get fooled by claims of "No Closing Costs" is a sad state of affairs. I've had to explain the truth of the matter to buyer clients on several occasions. Nothing is free.  
February 21, 2008 05:51 PM #4
Rainmaker
66,809
Christopher Ohlsen
Plattsburgh Mortgage Company - Plattsburgh, NY

Matt  - Absolutely that is what this is about. Nothing is free as Rosario pointed out below. But truthfully how many times have you gotten something for free (short of a gift) that really held any value. There are many factors to be considered. Most importantly, if the prospect does qualify for the "no closing costs" loan they will still pay for an appraisal and a credit report in addition to getting a rate that will cost them tens of thousands more than if they had paid closing costs and taken a fair rate.

David - Yep, bait and switch is alive and well in certain segments of the market. Of course with Countrywides ailing liquidity we can all see where this type of marketing gets us.

Mathew - I do admit that this type of promotional garbage is enticing. Obtaining real estate or renegotiating or modifying the terms of an existing loan is not cheap. The best that we can do is educate our clients and prospects so that they are fully prepared when they do pull the trigger. In this way we will be working with qualified prospects who are aware of the cost of doing business before entering into a contract.

Rosario - Its especially sad when people are caught unaware. Whats most troubling is that many inexperienced loan officers touting "no closing cost" loans do not verify assets right away because initially they are telling the prospect that there are no closing costs. When they get to the "customer set" (believe me I've been around and seen it all) and they finally disclose toward the end of the process sometimes borrowers will be caught off guard by the fact that before they can close they need to verify funds needed to close. Often times they do not have the funds prepared because they were not properly prepared for the transaction. The inexperienced loan officer denies the file, and wastes a lot of other peoples time. Rosario, you and I are not that far from each other. I gave some third party endorsements to some of the Real Estate Sales people whom I work with (in this case they are Realtors, don't know how to make the symbol). Third party endorsements are powerful. Please feel free to contact those people mentioned in my blog Referral Ping Pong and see what they have to say about me. Not sure how things are working out for you with regard to making sure that your clients are properly qualified. I can't guarantee that I can approve ever file but I can promise you that I will give a quick yea or nay.

February 22, 2008 09:37 AM #5
Rainmaker
169,438
Phil Caulfield
Opes Advisors - San Mateo, CA
Mortgage Lender - San Francisco Bay Area

The correct terminology, in my opinion, are to call these offerings "No points and No Fees" loans.

March 31, 2008 05:04 PM #7
Rainer
10,213
Trevor Jules
2 Blue Chip Professionals, LLC - Ellicott City, MD
We are talking about countrywide Right? There is no free loan!! if it were, then no one at that place would have a job.
March 31, 2008 05:55 PM #8
Rainmaker
66,809
Christopher Ohlsen
Plattsburgh Mortgage Company - Plattsburgh, NY

Phil - Yeah, you can call it that if you want to. I still think that it has a deceptive ring to it. When you tally up your total fees for the month are you or are you not counting YSP (if broker) or SRP (if direct lender). "No points and No fees" still give the same idea as the loan being free and is only true if you are only counting the front end of the loan. I prefer to be up front, give the honest quote even if it is slightly higher than other quotes and follow through by deliver what I promise or better. I really don't like the idea of tricking people into thinking that they are getting a better deal than they actually are with this jargon that many large banks use to promote their junk loans.

Trevor - Country wide is definitely one of the major mortgage lenders that employ these kind of sneaky tactics. No, there is no free loan just like there is no free medical care, auto repair shop, hair dresser, or restaurant. No service being provided will be provided for nothing in return. Sometimes certain services do not costs money but there is a motive behind the offering. For instance I offer free marketing to Realtor's® and real estate professionals in my area; it does not cost them a dime but I do it because it is mutually beneficial and gives me inventory to use to attract more buyer clients for all of us. A loan however is going to cost you for the work completed one way (front) or another (back).

April 04, 2008 01:35 PM #9
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Rainmaker
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Christopher Ohlsen

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