In article
<a2c89d4d-9f0b-46e5-ba91-e9e8db0592ec[at]i12g2000prf.googlegroups.com> ,
Augustine <evandro[at]mailinator.com> wrote:

- quote -

I don't recall if you posted any of the terms. So, lets say
that this was a true H/E loan from a real bank, it was for $50K,
and you got a rate of 6.5% fixed. Your total payments over 15
years would be $78K. At 6%, the better rate with closing costs,
you would have paid $75K. The net is that your "no cost" loan
cost $2450. Closing costs would have been things like the
appraisal, recording, maybe a tax fee, etc. No more than $500
at the outside. So, the net cost of the no cost loan was $2000.
I don't know about where you live, but where I live, $2K will
pay for a lot of trips to Dairy Queen.

-john-

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================================================== ====================
John A. Weeks III * * * * * 612-720-2854 * * * * * *john[at]johnweeks.com
Newave Communications * * * * * * * * * * * * http://www.johnweeks.com
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On Jan 14, 7:11 pm, "John A. Weeks III" <j...[at]johnweeks.com> wrote:
- quote -

It's been a few years, but I pretty sure that I scoured the agreement
for hidden fees. I'll check it again, but can you provide any tips
about how they could show up?

Indeed, I got a rate about 0.5% higher than I could otherwise.
Unfortunately, that rate cannot be beaten nowadays...

Thanks John and Kastnna for your replies.

On Jan 14, 7:11*pm, "John A. Weeks III" <j...[at]johnweeks.com> wrote:
- quote -

You are right to be skeptical (as am I). Its the "no such thing as a
free lunch principle". Even if there really were no charges rolled
into the loan, the bank recoups the cost by charging higher interest
than they would have otherwise. And as John said, I am willing to bet
the charges were there anyway, just buried.

In article
<698a51f9-da3d-4163-8b16-c1becf07df6f[at]p69g2000hsa.googlegroups.com> ,
Evandro Menezes <evandro[at]mailinator.com> wrote:

- quote -

Basically the same. What matters is what position the loan is
in. Your H/E loan is in first place, so it acts the same as
a first mortgage.

BTW, I am skeptical about the zero cost. All loans have costs
and fees associated with them. What you likely meant is "no
out of pocket payments". If you look at the closing statement,
you will probably find that the fees were rolled into the new
loan, and now you are paying for the fees over 30 years rather
than paying them up front and being able to deduct them from
your taxes in one shot. Often times when fees are rolled into
the new loan, the borrower doesn't notice them, which allows
the lenders to put in all kinds of junk fees and charge outlandish
amounts for the fees. That no cost deal was probably the most
expensive loan you could have found. Always think total cost,
and not just cost per month.

-john-

--
================================================== ====================
John A. Weeks III * * * * * 612-720-2854 * * * * * *john[at]johnweeks.com
Newave Communications * * * * * * * * * * * * http://www.johnweeks.com
================================================== ====================

Some years ago, my mortgage lender contact me about refinancing my
home at zero cost. The rate wasn't the best, but good enough and much
better than my current one. That coupled with the zero cost, settled
it in my mind.

I was fully informed that it was actually a HELOC for the same value
as my mortgage balance and that, for all purposes, it would be
equivalent to a new mortgage, including tax-wise. Or is it?

TIA