No Point No Fee Programs: A home buyers dream mortgage or nightmare?

If there are mortgage programs made for the first time home buyer, that would have to be the No Point No Fee Programs.

From experience when applying for mortgages, it seems that fees are coming from every different direction. Even making copies of your application data sheets can add an extra fee. It is quite rare for mortgage companies to promise to cut all these extra payments, which is why the no point no fee program was conceived. Processing fees can add up. You could be misled by the belief that just because there are no fees the interest rate in no point no fee programs is higher as a form of compensation. This is not necessarily true. No point no fee programs can be a form of reward for those with good credit and good economic standing. Mortgage companies even promise that the more points you pay up front, the lower your rates will be.

Again, with mortgages, it takes money to make money. If you have a bad case of credit history, it is not likely you'll be able to participate in a no point no fee program. Bad credit will add a fee to a mortgage. Credit issues that can prevent you from obtaining a traditional lending profile and would definitely affect your application for a no point no fee program include late payments, collections, charge offs, judgments, bankruptcy or consumer credit counseling and foreclosure. Bankruptcy, foreclosure, judgments, and delinquent accounts are analyzed against equity position/down payment which determines loan approval and rate. We are very aggressive in finding ways to finance borrowers in unfortunate circumstances. These are analyzed on a case by case basis.

An important thing to remember is that no points doesn't necessarily mean no fees, and vice versa. Some mortgage companies no point no fee programs are a foolproof way to know that you are not paying any hidden money. It is possible to have a no point program that has a lot of initial processing fees. Likewise, a no fee program can still have added points. With the combination of both no fee and no points, you'll know that you'll be saving money upfront and for years to come.

No point no fee programs have, of course, its rewards and otherwise. One advantage of no point no fee programs is that there are no closing costs involved. Another is that less money is required to close. The disadvantages of no point no fee programs are higher rates and higher payments or amortizations.

Some mortgage companies deny the offers made in a no point no fee program. Would you believe they claim that a no point no fee program only seeks to keep out-of-pocket expenses to a minimum. They would simply require you to pay a nominal fee at the time of your application, which will be credited back at closing and the mortgage company will not charge you additional fees. Their reason for this information hijacking is that no one works for free, especially that mortgage companies have no control over most fees that they charge. Federal law prohibits any kickbacks or profit sharing arrangements on title, appraisal, escrow, and others - so these prices are hidden in a no-point no fee programs by raising the interest rate.

Some mortgage companies say "No Points"- but then charge a Broker Fee. They are one and the same. Call it what you like, but it often comes out more- they might charge a $3500 broker fee on a $170,000 loan- that's over 2 points. So do you honestly believe that a mortgage company will waive at least $59 filing charge? Definitely no. They charge you a higher rate on your loan, even if they call it a no point no fee program.

So is there really such a thing as no point no fee program?