No Closing Costs?

Have you ever heard a mortgage company advertise “no closing costs?” I have. And it makes me angry. It makes me angry because it is a lie. There is no such thing as “no closing costs.” A loan can be structured so that the closing costs are figured into the loan, or your equity can cover the cost when you refinance, or the seller can pay them, but they are on EVERY loan. Most fees have to be on every loan. These are not optional fees that most companies just charge you for the heck of it, therefore allowing special companies to not charge them. They are fees that are associated with every loan.

Some administrative fees can differ from company to company, but the company still has to charge a fee, so they can be paid. Surely we don’t expect someone to work for us for free. Don’t be fooled, people don’t work for free. Even if a company doesn’t “show” any fees, they are getting them “on the back,” which just means they have charged you a higher interest rate and are receiving extra money for doing it.

Do lenders have title companies that work for them for free? Do they have appraisers that do their jobs for free? Do the nice people at the local courthouse do their recording and only charge some people for it? Of course they don’t. “No closing costs” is a scam, and you should be leery of doing business with anyone who doesn’t tell you the facts, straight up and up front.

We should always be on alert when someone claims they can do something that no other person / company in their field can do. Sometimes they can, but most of the time, they are just misleading or manipulating you.

Have you been sucked into this or any other misleading offer?