you pay for everything regardless of what they call it – a loan like that just takes less cash up front. Do you really think there are no closing costs etc? all that shit’s just getting rolled in via. interest rate or higher total loans.
when I looked at the interest on the 20% loan over time vs. just paying PMI and factored in the same payment and how long it would take to get to 20% I found that I spent less money overall by using PMI.
this is true for a lot of people. we’re trained to want to avoid PMI, even when it doesn’t make financial sense. BOA is probably making more money from you on the 20% loan + closing costs they have rolled in vs. a more traditional approach.
what is the BOA interest rate on this loan? is it the same rate for the 20%?