The Truth About No Money Down Or Closing Cost Mortgage Companies

Ever seen an ad which says that you can get a mortgage without any closing cost? These no-money-down or closing-cost mortgage companies are actually relying on unethical sales tactics. They are hiding the facts about the loan and highlighting only one aspect that can sound really good but isnt that easy.

No-Money-Down Mortgage Companies

There are many no-money-down or closing-cost mortgage companies that offer you loans without having to pay any down payment. But then some of them require Private Mortgage Insurance, or PMI. The best thing that you can do with such companies is avoid them. A PMI is an insurance policy for which you pay the premium and it protects the lender. It is a fantastic tool to extract some more money from you in your monthly payments. The only thing that the PMI does for you is add several hundred dollars to your monthly payment.

No-Closing-Cost Mortgage Companies

If you thought the first one was sleazy, wait till you hear about this one. The no-money-down or closing-cost mortgage companies that advertise about zero closing costs actually hike up their interest rates by as much as 1%. This might seem like a small amount at first but in the end, it will cost you much more when you compare it to the closing cost that you would have paid. The lenders or the no-money-down or closing-cost mortgage companies doesnt specify this fact in the advertisements. So the best advice is to do your homework and look for legitimate companies without any hidden facts or costs.

David Johanson has written many more articles about mortgages and bank loans

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