No Closing Cost Mortgage Refinance.

When you are looking to refinance your current mortgage, keep in mind their is a no closing cost option.  Lenders that offer a no cost refinance option can truly give you a no cost refinance on your mortgage.  Keep in mind that the lender has to do something in order to charge absolutely no costs.

How A No Cost Mortgage Refinance Is Possible

A lender doesn’t just decide that your mortgage can have absolutely no costs, because there are costs that are involved in a mortgage refinance.  The appraisal, title search, credit report, etc. are just some of the typical costs.  In order for the lender to give you a no cost option, they have to give you a lender credit to cover all the costs.  Typically, the lender credit comes with a slightly higher interest rate.

An example of a no closing cost option:

Option 1:  An interest rate of 3.5% and total closing costs of $2000.

Option 2:  An interest rate of 3.875% and no closing costs.

The higher interest rate allows the lender to give you a lender credit large enough to cover all of your refinance costs.

We see many homeowners looking to refinance take the no closing cost option, since many have refinanced their mortgage 2 or 3 times in the last 3 years and they don’t want to pay for costs again.  Also, the no closing cost option doesn’t require a break even point, because if you are not paying any costs to refinance, the savings of the refinance start immediately.