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Bank of America Offers No-Fee Mortgages, No PMI

by Ryan Guina

Bank of America recently announced it is offering no-fee mortgages and will not charge for private mortgage insurance (PMI).

You will not pay fees for: Bank of America will not charge for applications, appraisals, loan originations, title insurance, or flood certifications. BoA has also announced they will not charge for PMI, which is often required for borrowers who put less than a 20 percent down-payment of the house’s purchase price.

You will pay fees for: Refinancing is not covered under their new program and borrowers are still responsible for transfer taxes, recording fees, their own title insurance (which is not always necessary!) and legal fees, among other charges.

Other perks: To remain competitive with their rates, Bank of America will also pay $250 to people who obtain mortgage approvals but close with other lenders. BoA also guarantees the loans will close within 25 days unless the customer requests more time or there are extenuating circumstances.

Why are they doing this when no one else is? Bank of America is the nation’s 2nd largest bank, and it seems as though they are making moves to take over the top spot. This is the latest in a series of moves that is intended to shake up the industry, and more importantly, bring lasting customers to BoA.

Concerning this most recent deal, Floyd Robinson, the president of BoA’s home loan business said, “We’ve found that when a customer has a mortgage with the bank, he typically buys five other products, so it’s a great way to build a relationship.”

If you are in the market for a new home, it can’t hurt to at least look at Bank of America as an option. It might even save you a couple thousand dollars. :)

Free stock trades at Bank of America

In other industry shaking moves, last October, Bank of America began a program that allows investors to make up to 30 free online stock trades a month when they have at least $25,000 in various deposit accounts within the bank. That’s nice but, if you have a more limited budget, you can get 10 free trades at Zecco per month, with a minimum of $2,500 in your account.


Published or updated March 1, 2011.
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1 jim

Nice find!

2 dimes

If you are in the market for a new home, it can’t hurt to at least look at Bank of America as an option. It might even save you a couple thousand dollars.

Doubtful. More likely than not they plan on paying for this by increasing interest rates, where even a tiny increase in your mortgage rate can mean thousands more dollars in interest over the life of the loan.
BofA does not have your best interests in mind.

3 Ryan

Dimes, I think you are right.

From the CNN Money article:

‘Robinson said rates will be “competitive,” though not necessarily the lowest. “We certainly think they’ll be in the top half of competitiveness in every market we’re in,” he said.’

Competitive does not mean best, and the top half of competitiveness leaves a lot of room for improvement.

I imagine they will use this mostly as a marketing ploy and more than make up the money on the back end. Most banks will not do something that will not make them money – it’s their business. :)

4 PT

I’m interested in the other side of this program…the $250 Best Value Guarantee. Has anyone received their check yet? I can’t see to get my check.

I applied for two loan programs (BOA and DHI), was accepted to both. DHI ended up offering the best value. I jumped through all of BOA’s hoops to get the $250 and still haven’t received the check. Anyone else having this issue?

Thanks,

PT

5 Ryan

Hi PT,

I don’t know of anyone who has taken them up on this or has succeeded. I hope you can get it sorted out! :)

6 PT from Prime Time Money

Ryan,

I did get my check. It finally came in. I posted about it on my site.

Thanks,

PT

7 Ryan

I’m glad to hear BoA stood by their promise. :)

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