Chris, Chris, Chris, No cost DOES mean that you are paying more, each and every month for the life of that loan.
There is NO other possibility.
Getting a GFE is fine, but until you are locked in AND approved, talking about the rate is like talking about the weather. It changes.
Chris, if you are getting loans to keep longer than 5 years, in most cases that no cost loan is a HUGE mistake.
It ABSOLUTELY, positively DOES mean that you are paying a higher rate and higher monthly payment for the life of the loan.
It’s comments like yours from people who THINK that they know what they are talking about but obviously haven’t got a clue, that just make me laugh.
A $5000 rebate to the broker might mean $150 a month in higher payments, which is $1800 a year net cost to you.
FOR THE LIFE OF THAT LOAN.
The ONLY way that there is a commission is when the borrower is charged a higher rate than they actually qualify for.
There is NO commission at the PAR rate, not a penny.
If you don’t understand this, then you’ve been lied to.
The par rate for a 30 YR fixed was 5.50% last week. It was 5.875% yesterday. Your friend with the no cost loans was probably well over 6% last week.
It’s obvious that she’s got you fooled, and here you are recommending her like you are an expert, but you don’t even know what you are talking about.
Welcome to America!
PS: I am in the biz, and don’t lie to people about what the best rates are or fool them into believing that a no cost loan isn’t costing them anything.
Many/most people in the biz will lie to you, and it does amaze me that they still get referred to.
Your friend may or may not be on the level, but from what you appear to know, I’m not so sure that you got the best rates that you could have.
