One of the things I hear a lot is that people are getting cash in their pocket from a refinance rate where there is no rebate. “I’m not paying any closing costs!” they proudly tell me, “The bank is putting money in my pocket.” Chances are that’s not what’s going on. In fact, when the …
Monthly Archives: September 2024
Pre-payment Penalties and Alternate Payment Schemes
From an email: I was wondering if you could tell me whether the following ways to save on interest are actually possible. If they are what are the penalties typically associated with these suggestions. I know you have mentioned a pre-payment penalty but what amount is reasonable? 1) Pay a certain amount over your monthly …
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Payment, Interest Rate and Up Front Costs: Choosing a loan intelligently
Most people tend to shop for a mortgage based upon the payment. They figure the lowest payment will be the cheapest loan. This is the way most people make banks rich. Because they are looking for the loan with the lowest rate and the lowest payment, they choose the loan with two or three points …
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Games Lenders Play Part I
I was a little shy of ideas of stuff I wanted to write about, and too lazy to finish my research on some stuff I’m working on. But: I get the same junkmail and spam most of you folks do. They don’t know who I am when they send it out. It’s just that I …
How Loan Providers Make Money
In an attempt to debunk some of the slanders that are floating around out there, this article is an itemization of how lenders and brokers make money on loans. The first method is obvious: Origination or discount points charged to the consumer. This is money that the person getting the loan is paying, or someone …
Lender Discrimination and Shopping for a Home Loan
Minorities get higher rates. They add that the fact minorities are more likely to borrow from institutions specializing in high-priced loans could mean they are being steered to such lenders or that some lenders are unwilling or unable to serve minority neighborhoods. This is called redlining. It is illegal. HUD really gets their panties in …
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