How can big banks advertise no points no fees?
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And to slim out all the bull crap answers this answer can get and i know damn well there is no such thing the consumer will pay a higher interest rate than they qualify for or you are charging an origination fee that might be on the paper work up front or added on to other places but loan officers get paid thousands on every loan so how the hell can wells fargo say no fees no points maybe banks do do this but i doubt it since it is there money they r borrowing out but smaller MORTGAGE companies that use lenders also advertise no pts or fees its B.S. so why do they do it
How can big banks advertise no points no fees?Fees and points are negligible when compared to the overall interest payments made on a home loan.
1 point paid upfront on a $100k acquisition is $1,000. Let's assume a 30 year fixed mortgage. Assuming the mortgage is kept for the duration of the 30 years, the interest paid would almost be double the amount originally borrowed.
Logically speaking, what's $1,000 upfront versus $100k in overall interest payments over the duration of the loan? And it's guaranteed income assuming the borrower doesn't default.
Not a bad deal for the lender who is trying to attract customers to simply apply for the loan. Plus, most lenders who offer zero points/fees will most likely build a prepayment penalty for 3 years into the loan so if you go awol in the first 3 years, they'll still make money off the penalties.
How can big banks advertise no points no fees?to get people in to apply for loans....even if they arent making money off points and fees they are still going to make a ton off of the interest rate that they charge...most of their fees are disclosed upfront...like the appraisal, underwriting, processing, administration and application fee...some places waive fees to make it more appealing
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