No-Fee Mortgages available Tuesday

May 7, 2007
Bank of America Rolls Out No-Fee Mortgage

Bank of America on Tuesday will begin offering nationally a no-fee mortgage, which will eliminate most of the charges that add a few thousand dollars to every closing. Bank of America, which is the nation’s second largest lender by assets, has been offering this mortgage in Washington state since September. In February, it expanded the program to eight additional states. Tomorrow, it will begin advertising the “No Fee Mortgage Plus” nationally.

The loan also eliminates private mortgage insurance and the bank is guaranteeing its customers the best deal on interest rates and an on-time closing. Borrowers must put down at least 5 percent. The loans aren’t available to subprime customers.

Floyd Robinson, Bank of America's president of consumer real estate and insurance services, says the loan eliminates, on average, $3,350 in closing costs on a $200,000 loan.No other major bank appears to be offering similar loans. Robinson says the bank is able to make money by cross-selling new products. "This is about a relationship more so than about a single product sell," he says.

Source: The Associated Press, Ieva M. Augstums (05/07/07)