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The loans require no mortgage insurance — the additional fee typically charged to buyers who put down less than 20% of the purchase price — and no minimum credit score. Instead, eligibility will be based on factors like timely rent payments and on-time utility bill, phone and auto insurance payments. Prospective buyers must also complete a homebuyer certification course provided by Bank of America and federally approved housing counseling partners before they apply for the loan program, the bank said.

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Originally posted by 6IXSTRINGJACK:
We went with the average rate "per Google" for an average credit score of 700-719. Today, that rate is 6.762%.

With no money down on a $250,000 house, the total interest after 30 years will be $334,456.37 and the house will cost $584,456.37. With a monthly mortgage payment of $1,623.49.

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My guess is (unless they give an even worse rate) they'd be getting whatever the interest rate for 620-639 credit scores are getting at the time, which currently is 7.349% today. (There is "no data available" for scores lower than this because typically no bank would ever give a home loan out to scores under 620).

So now, at the worst available rate, with no money down on a $250,000 house, the total interest after 30 years will be $370,013.62 and the house will cost $620,013.62. With a monthly mortgage payment of $1,722.26.

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In December 2021, a 30 year mortgage rate was 2.70%

In July 2022 it was 5.51%

Let's do some math, (You can verify it here https://www.drcalculator.com/mortgage/ ), assuming that the house you own and are looking to sell is appraised at $250,000.

Assuming they make no additional payments in 30 years, somebody who bought your house in December of last year at a rate of 2.70% will find their monthly mortgage will be $912.59. They will end up paying $103,534.07 in interest. The total cost of that $250,000 house you sold will be $328,534.07 for them.

Now, assuming they make no additional payments in 30 years, somebody has 10% down and wants to buy it in July of this year with a 30 year fixed mortgage at 5.51%. For that same house, their monthly mortgage payment will be $1,278.94. They will end up paying $235,417.53 in interest. The total cost of that $250,000 house you sold will be $460,417.43.

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Originally posted by 6IXSTRINGJACK:

*No-Money-Down-Trap Mortgages

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Falsus in unum, falsus in omnibus

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