Forgotten Your Password?

Need to Register?

Question Icon

my rate is 4.500% my lender is gonna give me 3.888%.29 year fixed. no closing cost, no charge. whats the catch.

by lvlv2005122 from La Verne, California. Mar 21st 2015 Reply


Dan Conley (OmniFundInc)
#897 ranked lender in California - 119 contributions

Whats your loan to value and credit score? What you have been offered is a good offer. It's doable for sure. However I believe I can beat that offer if your interested? Give me a call and we can chat.Dan ConleyOmni-Fund619-886-3294

Mar 21st 2015
1
0
Sean Young (SeanYoung)
#2 ranked lender in Colorado - 1,109 contributions

They are most likely paying for the closing costs through the interest rate or they may be adding the costs to your loan balance. Not necessarily a catch, more of an option to keep your out of pocket costs down. Keep in mind, regardless of what your lender calls it, you are paying your closing costs. If you add them to your loan balance you are paying the closing costs over the life of the loan, if you pay them through the interest rate you are also paying them through the life of the loan and you could of received a lower rate if you decide to pay the closing costs with cash at closing. No matter what, you pay the closing costs and there are closing costs on every loan. To see if it makes sense for you, just take the savings of doing the loan and divide it by the cost to see how many months it will take to break even. Ask your lender what the rate would be if they did not pay the costs through the rate and see if the payment difference is worth paying the costs out of your pocket. The lowest rate is not always the best option depending on your short and long term goals. Best wishes, Sean

Mar 21st 2015
1
0
Edgar Aranda (earanda)
#722 ranked lender in California - 91 contributions

There are alot of variables involved in answering your question. Please feel free to call us and we can review your offer and better explain exactly what the catch is 8774044805. Thank you for reaching out!

Mar 23rd 2015
1
0
William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,055 contributions

The catch is that 3.888 is not the lowest rate you can get.. your lender is charging you a higher interest so he can use the extra revenue from that rate to pay your closing costs as well as their fee.. there is no such thing as a "No Cost" loan.. lenders, appraisers, title companies, etc.. none of them work for free, so the money needs to come from somewhere.. but make no mistake.. it's YOU that's paying.. either by paying a higher than "Par" rate, bringing cash to the table, or adding fees to your loan, but it's always you paying.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

Mar 23rd 2015
1
0
Subscribe to our news feed.