No closing costs?

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Submitted by Ricechex on July 25, 2008 - 2:22pm

BofA is offering a No Fee Mortgage Plus, which makes all closing costs free, to include PMI! Wow, how can this be? I thought PMI was to protect the bank, so by removing it, isn't that like giving loans to people that cannot afford them? Thought banks were tightening up on these kinds of things, and banks were hurting.

Here is the link:

http://www.bankofamerica.com/loansandhom...

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It's possible that it just
Submitted by fm on July 25, 2008 - 6:07pm.

It's possible that it just means no cost to you, and that they cover the cost of the PMI. Not really sure. However, when I asked about this loan, I was told it was going to be higher than a regular loan (in order to cover the cost of no closing costs in the long run).

Or, if they don't pay PMI, then it might be hard to qualify.

I ran the calculator a few
Submitted by temeculaguy on July 25, 2008 - 7:34pm.

I ran the calculator a few ways, it requires a minimum of 10% down. The rate was 6 7/8, a tad higher than can be found elsewhere, that is probably where they make it up. It probably has stricter qualification requirements, i didn't go far enough into the calculator because I didn't want to give contact info. PMI goes down as downpayment goes up, between 10-19% down the PMI isn't nearly what it is with 0-9% down.