If you are considering taking out a mortgage from Bank of America, there are several things you need to know about Bank mortgage loans that could save you thousands of dollars.
Bank of America is currently testing a “no fee” mortgage that allows homeowners to take out a Bank mortgage without paying many of the closing costs associated with conventional mortgage loan.
What’s Wrong with Loans from Bank of America?
The problem with taking out a mortgage from Bank of America comes from the fact that they are in fact, a Bank. Banks are exempt from the Real Estate Settlement Procedures Act and are therefore not required to play by the same rules as other mortgage companies. If you take out a mortgage loan from Bank of America you will pay what’s known as Service Release Premium on your mortgage interest rate. Service Release premium is the markup of your mortgage interest rate by Bank of America in order to receive additional profit when they sell your mortgage on the secondary market.
If you agree to pay Service Release Premium with your Bank of America no fee mortgage, you will pay thousands of dollars every year in unnecessary mortgage interest. Because Bank of America is exempt from the Real Estate Settlement Procedures Act thanks to the Banking Lobby, the Bank is not required to disclose their profit margin on your mortgage loan. Bank of America is marketing “no fee” mortgages in an attempt to distract borrowers from the fact that Service Release Premium is built into their rate sheets. You should never consider a Bank of America mortgage loan if you’d like to avoid overpaying.
You can learn more about what’s wrong with loans from Bank of America, including costly mistakes you need to avoid, by registering for our free, six-part mortgage video tutorial.