CashCall Mortgage Advertised Rates Review Loan Options, Ratings 2021
So I listen to the radio here and there, and even though I only listen occasionally, I still tend to get bombarded with mortgage advertisements. Funny how that works.
The latest was from a southern California-based company named “CashCall Rates,” which I believe started as a personal or payday loan lender before jumping into the real estate and mortgage game.
Anyway, I noticed in their radio ad that both the mortgage rate and APR were the same, which doesn’t tend to be the case with most mortgage loans.
Typically, you’ll hear something like, “Get a low, low 4% mortgage rate!,” followed by some fast-talking terms and conditions speak that say 4.55% APR or something significantly higher.
So that bit jumped out at me initially. It sounds like a great deal, right? Instead of the usual “bait and switch,” where your mortgage refinance is riddled with fees, you’re actually getting the interest rate they advertise with no fees!
But wait, this must be too good to be true. How can you get a super low rate and pay no fees? The short answer is you can’t. There’s no free lunch, or free mortgage, for that matter.
CashCall “No Closing Costs” Mortgage
- It’s a common sales pitch in the mortgage industry
- Pay attention to the no cost part
- Which doesn’t mean you aren’t paying entirely
- It just means you aren’t paying out-of-pocket at closing
- Instead, you pay via a higher interest rate
CashCall Rates Mortgage, like many mortgage lenders before them, touts no-cost refinance loans as their marquee product.
Put simply, a no cost loan, or in their case, a “No Closing Costs” mortgage, means the borrower doesn’t have to pay for their closing costs….out of pocket.
They still pay for their closing costs, just not all at once at the time of closing. Instead, they’re saddled with a higher than par mortgage rate to make up the difference.
I took a gander at some of CashCall’s mortgage rates and noticed that these loans tend to have interest rates roughly an eighth to a quarter of a percentage point higher.
This premium essentially covers a borrower’s loan costs, including things like the home appraisal fee, credit report fee, flood certification fee, tax service fee, notary fee, and title/escrow fees.
Let’s look at an example of CashCall Rates No Closing Costs mortgage:
Loan amount: $300,000
Loan program: 30-year fixed
Mortgage rate: 3.99%
No Closing Costs rate: 4.125%
If you paid your closing costs out of pocket and took the lower rate, you’d end up with a monthly mortgage payment of $1,430.52, and a total interest of $214,987.20 paid over the life of the loan.
If you went with the No Closing Costs rate, you’d have a monthly mortgage payment of $1,453.95, and total interest of $223,422 over 30 years.
As you can see, the monthly payment wouldn’t be all that much different, about $25. But the total interest paid over the life of the loan would be roughly $8,500 more. For the record, both options offer fixed rates for the full loan term.
So for those who actually keep their mortgage and pay it off over 30 years, they’d be paying more for those costs over the life of the loan.
CashCall Mortgage Advertised Rates Review Loan Options, Ratings 2021
But most borrowers don’t hold onto their home loans for the full mortgage term, either because they sell, refinance, or prepay.
In other words, the savings may not actually be realized if you pay your loan costs upfront. And even if they are, they aren’t all that spectacular, especially with the effects of inflation at play.
The big question is whether the mortgage rate will really only be an eighth of a percent different, or if in reality, it’s closer to a half point different. That’s when it may make a lot more sense to pay your closing costs out of pocket.
The takeaway is that the mortgage rate on a no cost loan will always be higher than a home loan where you pay your closing costs upfront, all else being equal.
Also note that this loan type is not available in the state of Washington.
Tip: If you take the time to shop around, you may be able to find a no cost loan with a lower interest rate than a mortgage where you must pay your lender costs upfront.
CashCall Rates $995 Flat Fee
- They now advertise a $995 Flat Fee
- To cover most third-party closing costs and their origination fee
- Just pay close attention to the interest rate offered
- And make sure you can lock in the rate if you like it
CashCall Rates doesn’t seem to be advertising the no-cost deal anymore, though that doesn’t necessarily mean you can’t engineer a similar deal with them.
Predatory Loans AKA Payday/CashCall Rates Short-Term Loans
s I meet with my clients, there are increasing numbers of short-term loans listed in their debt summaries. These loans are normally advertised on the internet for fast and easy money for those who need immediate CashCall Rates.
It is quite easy to qualify for these loans, if you supply the information the lenders request: 2 months of bank statements, voided check, and a personal ID and If you are approved, you will receive the funds the next day.
These lenders are now being sued in Court by the U.S. Consumer Financial Protection Bureau (CFPB) throughout the country. Many of the lenders have been following these practices since 2003.
These loans are referred to as “predatory” loans. These companies target individuals who are in serious financial difficulties. They have run out of all options to borrow money and now must turn to these unscrupulous organizations.
The interest rates range from 24% to 149%. In addition, there is usually an origination fee of 5-10% add to the interest rates.
You can imagine how quickly the amount you owe increases.
Some states are challenging the rates of these loans. States have guidelines of the top percentage you can charge in lending money and these guidelines must be following. Heavy fines are being assessed to the lenders in those cases that exceed the loan percentages allowed.
These loans are unsecured and, if you file bankruptcy, these “predatory” lenders do not have to be repaid. However, the lenders usually come out ahead with the enormous interest rates they are charging since not everyone files bankruptcy.
Be careful when you look to these lenders to be sure you understand the terms carefully. Calculate out the actual cost of these loans to you and whether you would ever be able to repay these loans. Most importantly, are you looking at this as a short-term loan. If not, you need to stop and rethink applying for these loans.
It is very important that you understand what the cost of borrowing money is before you take the loan. Although, these loans can be discharged in bankruptcy, until you file for bankruptcy, you are liable for these loans. Your wages can be garnished and, if not paid back, the lenders can put judgments against you.
That quick and easy fix of getting short-term money will have long-lived ramifications to not only your credit but also your ability to ever pay back this short-term loan.
Is CashCall now owning?
He now owns CashCall Rates, Inc., another firm specializing in small loans at very high-interest rates. As of 2020, he is running a successor to CashCall Rates named Owning.com that specializes in high balance, low LTV loans in California.
Is CashCall mortgage legit?
CashCall Rates Mortgage is an online lender that specializes in mortgage financing with competitive rates and low-interest loans. It’s a solid option for those with good credit looking to refinance their mortgage loans, especially veterans, real estate investors, and self-employed borrowers.
Is it worth refinancing for 1.75 percent?
The traditional rule of thumb is that it makes financial sense to refinance if the new rate is 2 percent or more below your existing interest rate. The new rate on a refinance must provide enough savings in the monthly mortgage payments to justify the cost of refinancing.
Are cash out rates higher?
Cash–out Loans Are Pricier
If the loan amount is $200,000, the lender would add $1,500 to the cost (though every lender is different). Alternatively, you could pay a higher interest rate—0.125% to 0.250% more, depending on market conditions.
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