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No Closing Cost Refinance – No Fees, No Costs, No Points

You can avoid all those non-recurring closing costs by going for a no closing cost refinance. This type of refinance has a slightly higher rate of interest and offers borrowers a rebate which would in turn help them pay their closing costs, thus enabling them to close while paying less money up-front.

Closing Costs

Some of the common closing costs that you don’t have to pay for are lender fees, credit report fees, escrow fees amongst various others. These payments are non-recurring over the life of the loan and therefore you don’t have to pay them. When people go for home financing they will realize that they will be given an option of a variety of interest rates and loan points which are associated with every type of loan.

However, through no cost refinance, you have the option of minimizing all those up-front expenses that you will be asked to make.

Is it Right for You?

No closing cost refinance is great for you if you give due credence to the “break even point.” If you go for this type of refinance option then the interest rate is slightly higher than the normal refinance options. This eventually leads to a higher monthly payment. However, it all works out to a borrower’s advantage.

Get Quotes and Then Decide

Before you choose no cost refinance, it is of paramount importance that you get quotes for the same. Basically, these would be centered on the two main components of closing costs; namely the 3rd party closing costs, and the points that a borrower pays to bring their rates down.

After you do a thorough examination of the quotes and your financial condition at that point of time, you must decide whether you are going for no closing cost refinance or not.

How Do Lender Companies Do It?

Loan brokers receive rebates from banks and in a no cost refinance the benefits of the rebates are passed on to the borrower. It offers borrowers a choice to cut down on the closing costs of the loans and thus save money.

At the end of the day, this is yet another option for borrowers and they must pick from the host of refinancing options at their disposal when they are looking at the option of refinancing their current mortgage or home loan.

When it comes to no closing cost refinance loan, you have to be very careful and some lender companies might say that you will have to pay no cost, or points, or fees, but at the end would ask you for some kind of fixed payments. Therefore, it is of paramount importance that you read the fine print, or you might just end up paying more than is required from you.

A borrower needs to picke the right option when it comes to refinance and must keep all the pros and cons in mind while making his or her choice. Only then can a borrower derive the maximum benefit for any kind of refinance like a no cost refinance

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