financing your arizona home
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- Mortgage Application Checklist
- Mortgage Broker vs. Mortgage Banker
- What is an Annual Percentage Rate (APR)?
"Zero Cost" Does Not Mean "No Cost"
"Zero cost" does not mean "no cost", because borrowers must still pay pre-paid interest, escrow for taxes and insurance, and so forth. Also, different lenders include and exclude various expenses for individual zero-cost programs — reason enough to shop around.
Consumers could compare zero-cost loans by asking a few quick questions: What is the par price (the price with no points)? How much cash is required at settlement? Are there any pre-payment penalties? Does the loan balance increase with a zero-cost mortgage?
Imagine if brokers routinely mentioned zero-cost closings and that such settlements became increasingly common. Lenders would be forced to bundle closing cost to be competitive — and that is very much in the best interest of brokerage clients and costomers.
Would closing costs decline? If lenders are increasingly forced to foot the bill, then, you bet. It would be in their self-interest — and what force on earth is more powerful than lender self-interest?
-Peter G. Miller, The Real Estate Professional - November/December 2005