Financial Fitness

I once had a man refuse a loan that would have saved him a lot of money every month at absolutely no cost to him whatsoever.

Why would he do this?

He just couldn’t believe that he wouldn’t have to pay a dime. “There is a cost that will have to be paid by someone! This can’t just be free!” And he literally walked away from the loan because he couldn’t believe it.

So, can I really get you a no cost loan? No closing costs, no nothing?

Yes.

Here’s how it works:

• Background information: Nearly every loan gets sold. One company gives you the loan, and then they sell it to another company. Often, Company A will still service your loan, so that you won’t know the difference, but they don’t own your loan anymore. Company B owns it now.
• Company A makes a profit when they sell your loan.
• Having a slightly higher interest rate (usually about .25% higher than a 0 point loan where you pay your own closing costs) gives the loan a little higher value when Company A sells it to Company B.
• When Company A gets a little more profit from selling your loan (due to the interest rate – see the last point.) they pay your closing costs with part of it.
  

Voila. No cost to you at all. Of course you could pay closing costs and get a .25% better interest rate if you’d like (I can run all those numbers for you to help you decide!) but there really is no other “catch” to a zero cost loan.

Do you believe me now?