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Please Repeat

When you hear a mortgage sales rep tell that you “there are no closing costs,” don’t sign up for anything until you request that s/he repeat the statement.  On the second go-round, you might hear that “there are no upfront closing costs.”  This means you’ll pay all the closing costs when the deed is transferred, rather than at application (which might net you maybe six weeks of interest at about 1%, but actually doesn’t save you any costs).

Or you might hear “there are no out of pocket closing costs.” Translated, you’ll be financing the closing costs in with your mortgage (which you’ll pay back over 30 years at approximately 6% interest), or you’ll pay a higher than market interest rate to allow the lender to absorb your costs. 


Comments

( 1 comment — Leave a comment )
(Anonymous)
Mar. 9th, 2010 02:38 am (UTC)
Ha! There's no free lunch, especially at the bank!
( 1 comment — Leave a comment )

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