You’re sitting in front of the television and a familiar mortgage advertisement pops on. “You can get a mortgage for $995!”
Of course you can. Through any mortgage lender in the United States.
The ad is truthful, and as required, includes the federally mandated Annual Percentage Rate information. What it doesn’t say is that your mortgage interest rate will be about quarter percent higher (or more) than that of a borrower willing to pay a one-point loan origination fee.
It lets you assume that you are getting a “deal.”
You aren’t getting something for nothing.
That isn’t a bad thing. Lots of people don’t want to pay points when they obtain a mortgage. However, some novice borrowers and home buyers may think they are getting a “deal” – the same rate as other people who pay points, only without paying points.
That isn’t how it works. And, the same rules apply to get qualified for a loan. “Bad credit” may not be ok.
You pay now – or you pay later.