What is the True Cost of a "No Cost Loan?"

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You always hear abou that "no cost loan" however the old addage is true there is no such thing as a free lunch. Ask your professional about what the true cost is of the "no cost loan" or call us at 925-954-7082 anytime and we would be happy to explain the differnces, benifits and pitfalls of the several various ways to structure a mortage. If you are buying property in the Conta Costa Bay area and you need a Mortgage Loan then we are absolutley top notch in customer service and consulting. We will find the right solutions for your sit your situation.

No fees but a higher interest.
In this option the lender offers to cover all the expenses related with the mortgage with the condition that the borrower accepts a higher rate of interest. The higher rate of interest will be charged during the whole lifetime of the mortgage. It is important that you ask for detailed estimates of the real costs of this no-cost alternative. This estimate should show the cost of the mortgage fees and how much extra interest you will be paying with the higher rate of interest.

Taking a loan to pay the loan fees.
This option of no-cost loan modification actually involves taking on a loan to pay for a loan, or at least the loan fees. With this option the lender covers the mortgage modification fees but includes the fees as part of the loan. This will mean the borrower will have to pay for the fees with interest as part of their modified mortgage. Again it is important to understand what the real costs of your no-cost mortgage modification will be. Ask for an estimate that details the real cost of your mortgage fees after paying interest on them for the length of the loan.

Lenders will often try to include a prepayment penalty clause in the mortgage or loan contract to discourage borrowers from changing loans in the early years of the modified loan. As far as you can you should try to avoid or reduce this penalty as they will reduce flexibility when trying to find a better deal in the future.

Until Next time Here is to your success! Jason Wheeler 925-285-2172 | Come to a FREE Bay Are Event |

 

Consumer Confidence Continues to Plunge.

July 24 (Bloomberg) -- Confidence among U.S. consumers fell in July for the first time in five months as mounting unemployment and depressed wages shook households. The Reuters/University of Michigan final index of consumer sentiment decreased to 66, better than forecast, from 70.8 in June. A preliminary reading was 64.6. The biggest employment slump of any recession in the last eight decades may be making more Americans feel their jobs are in jeopardy. The growing insecurity, together with falling home values, is prompting households to limit spending and save more, meaning an economic recovery will take time to gain speed.

Consumers remain very cautious,| David Semmens, an economist at Standard
Chartered Bank in New York said before the report. They’re concerned about the outlook for jobs. Consumer spending will be fairly flat at best.

The confidence index was forecast to fall to 65, according to the median of 57