Murf..
At 5.50% NO fee is charged because the lender will pay…..
5.50% pays a commission. 5.00% does not
This weeks “average” rates were 5.50%
The point is that a lower rate is really available, but it comes with an upfront cost.
(Rates change daily)
Putting a borrower into the higher rate gets a commission from the lender. The higher the rate the higher the commission. It’s a reward from the lender for screwing a borrower. (Not what I do)
If kept for many years, the borrower will pay thousands of dollars more in the long run.
The alternative is paying a fee up front and getting a lower rate/lower payment. It’s a detailed explanation that most ppl don’t understand, including those pushing loans.
There is no such thing as a “no cost” loan. IF there is no cost up front, it will cost a fortune in the long run. Usually the break even point is 2-3 years. Depends on individual circumstances.
