Tuesday, October 5, 2010

How to Refinance With No Closing Costs

No Closing Cost Mortgage Refinance Loans - How to Refinance With No Closing Costs
No closing cost refinance loans, this is an excellent deal if you aren't planning to stay in the same home for very a long time. The trade-off when getting a no-cost refinance loan relative to an ordinary refinance is an additional 2% to 1% on the interest rate. If you’re planning a longtime borrowing, this is a poor deal.
It is though a very good deal for the short term; it can save you substantial amounts of money.

No Closing Cost Mortgage Refinance Loans – How to Get One
·        1) You should apply for no closing cost refinance loans from banks and other mortgage providers. You should be aware that refinance loans without closing costs are slightly more difficult to be approved because of the lower up-front cost to the borrower i.e. your bank and mortgage providers.
Be sure to compare the interest rates offered to you with those who have regular closing costs. These loans are not the same as "no-cost" refinance loans, which cover all fees related to the refinancing, including settlement fees for the original mortgage.

·        2) Take your time to evaluate the loan agreement carefully. Be on the lookout other additional costs besides closing costs that may make the refinancing loan less attractive (your borrowers might sneak something in).
Because the loan has no closing costs attached to it does not mean that there are no settlement fees, appraisal fees or other additional costs attached to it. Scrutinize for specific terms, such as loan origination fees, which can add 1% or more to the total cost of the mortgage.

·     3)    You must be sure to calculate the number of years you would need to remain in your home with the new refinancing loan for it to be less expensive to pay the closing costs yourself.
This will give you a clue if it's a good deal for you in the long term to go with a no closing cost refinance deal. It will mean that you will have to pay higher monthly mortgage payments.

·      4)   If you are satisfied with the refinancing deal, then close the deal. If you've been successful, the no-cost refinance will save you money over a regular refinancing, and you'll likely move out of the house before you end up paying more in interest fees.

If you are considering a No Closing Costs Refinance take a moment to educate yourself and see if these loans are right for you. Investing just a few minutes of your time to study the outlines listed above, you could save yourself thousands of dollars.