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Is there such a thing as a no cost HARP refinance?

Can I finance all of the closing costs into the loan? by JMadden from Gilbert, Arizona. Jan 14th 2013 Reply


William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

Yes and No.. There are lenders out there who can do a HARP loan where you are only refinancing the balance of your existing mortgage, and you don't need to bring any money to the table.. in effect, a no cost loan.. right?... We'll not actually... when a broker offers a "No Cost Loan".. it doesn't mean that everyone associated with your refinance is going to work for free.. Mortgage brokers don't work for free... title companies don't insure title's for free, etc.. What it does mean is that you are going to pay a higher rate than what other companies offer, because with that higher rate, comes a higher rebate.. and it's the higher rebate that pay's the costs associated with your mortgage.. So, in effect you are paying for it in the form of a higher interest rate.. Since closing costs on a refi are relatively low for most lenders (our company included), it's best that you pay the costs up front or add them to the financing, and take the lower rate, but not every scenario will this be the best option.. your best bet is to talk to a local mortgage broker and have them put together several loan scenarios and let you decide which way is best for you... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Jan 14th 2013
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Bert Carpenter (BertCarpenter)
#37 ranked lender in Arizona - 1,823 contributions

There is no such thing as a "no cost loan". Every loan has costs, but every HARP loan I have done has required the customer to bring NO money to escrow. In each case it is possible to arrange for a HARP refinance where all of the required costs are paid either by adding the amount to the new loan balance or through credits by taking a higher rate. I am located in Chandler and would be happy to assist you in your quest for a HARP refinance. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ Licensed in California and Arizona ~ www.LoansA2z.com 888-889-9950

Jan 14th 2013
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Barb Lanis (BarbLanis)
#72 ranked lender in Illinois - 663 contributions

William and Bert are correct, as well as many others here. I think everyone gave you a great overview of how the HARP loans work. No one works for free, so one way or the other (via out of pocket costs to you -or- paying a slightly higher rate to pay for the costs -or- increasing the loan amount to cover costs) - you still pay. It works this way for a HARP or even a regular refinance. No difference. I will add one more thing specific to HARP loans... Fannie does not have any restrictions in terms of how much the loan amount can be increased to cover closing costs or re-loading escrows. Freddie does, and it's limited to 4% or $5,000 (whichever is less) calculated this way: Your existing balance + 30 days interest X 4%. I would recommend checking to see who backs your existing loan. Fannie or Freddie?

Jan 14th 2013
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Jesse Olson (jesseolson)
#653 ranked lender in California - 37 contributions

Hello JMadden, Yes depending on the loan scenario, you may be able to structure the terms to have a zero closing cost loan. We do a lot of Harp loans in AZ, please contact me at 949.491.8607 or jolson@afncorp.com to see if we can help you save money, Sincerely, Jesse Olson

Jan 14th 2013
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Michelle Curtis Loan Originator NMLS 401173 (EmbassyFundingLLC)
#77 ranked lender in Florida - 2,240 contributions

Saying something is a no cost is a bit tricky. First and foremost you need to find out if your loan is help by Fannie or Freddie because the guidelines are different for each. Most if not all costs can be wrapped into the loan, but to say their are no costs may be a bit misleading as there are always costs associated with a mortgage transaction. I am not licensed in Az. but I'm sure there are lenders that won't charge you any fees, but you will still have title and escrow fees that the lender may be able to pay all or part of them. So I guess my answer is first find out if it's Fannie or Freddie, second find out if the lender will be paying your escrow and title fees, if they are then your in luck!

Jan 14th 2013
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Steven Ceceri (CreativeFinancingOptionsGroup)
#36 ranked lender in Massachusetts - 723 contributions

The real answer is NO if you mean that it will not cost you any money at all to refinance, be it through cash to close or by increasing the loan amount to allow for the closing costs to be covered. Mortgages are NEVER NO COST! There is a cost to everything in life and this is no exception. Work with someone who can explain the real differences to you and I would be happy to be that person. What I assume you mean is that you are wondering if there is a way you can refinance without you having to bring money to closing and that answer depends on your loan scenario! I'm happy to discuss this in more detail, but don't be mislead in thinking there are no costs!

Jan 14th 2013
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Matt Pollina (matt@smartmtgs.net)
#59 ranked lender in Illinois - 40 contributions

Yes there is although some answers here are correct in that the rebate from a slightly higher rate cover the costs. I have closed several of these loans and being a wholesale lender, my rates on no cost options are still better than most. Please see my Blog entitled 'Mortgage Rates and Fees Explained' for a more in depth look at this.

Jan 14th 2013
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Andrew Alfonso (CashCow)
#43 ranked lender in Florida - 271 contributions

J -- absolutely there is! Some restrictions apply of course. But its possible. Andrew

Jan 14th 2013
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Linda Miller (Linda Miller)
#2 ranked lender in Utah - 568 contributions

As mentioned below, if you want the absolute lowest rate, you will be paying fees. If you want to pay less in fees, you will have a higher rate. You can finance most of the closing costs into the loan. With a Freddie Mac HARP loan you can finance up to $5,000 into the loan - over and above the principal balance you are paying off. Check with one of the Lender 411 mortgage professionals in your area with your specific scenario - so much depends on credit score, loan to value, debt to income and other factors. Good Luck...

Jan 14th 2013
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Korene Clopine-Seaman (korene)
#68 ranked lender in Arizona - 89 contributions

Yes and No.. There are lenders out there who can do a HARP loan where you are only refinancing the balance of your existing mortgage, and you don't need to bring any money to the table.. in effect, a no cost loan.. right?... Not really ...... when a banker or broker offers a "No Cost Loan".. it doesn't mean that everyone associated with your refinance is going to work for free.. There is no such thing as a FREE Loan. You do not work for free. Mortgage bankers, brokers, lenders don't work for free... title companies don't insure title's for free, etc.. What it does mean is that you are going to pay a higher rate than what other companies offer, because with that higher rate, comes a higher rebate.. and it's the higher rebate that pay's the costs associated with your mortgage.. So, in effect you are paying for it in the form of a higher interest rate.. Since closing costs on a refi are relatively low for most lenders (our company included), it's best that you pay the costs up front or add them to the financing, and take the lower rate, but not every scenario will this be the best option.. your best bet is to talk to a local mortgage banker that is a direct Fannie Mae or Freddie Mac lender like we at Pinnacle Capital are. I will put two or three loan scenarios and let you decide which way is best for you... I'm a Mortgage Banker in Metro Phoenix AZ. I am a licensed lender in Arizona and California. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 623-340-0934 korene@klcsloanteam.com NMLS 218520

Jan 14th 2013
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,960 contributions

NO... Absolutely NO.... All loans have closing costs. It is how you pay them that makes it "no cost". Lenders can and do "hide" your closing costs in various ways. Typically this is done by increasing your interest rate in an amount significant enough to cover all your closing costs. Another way is to increase your loan amount on the new loan to cover the costs. Be careful of "No Cost" versus "no out-of-pocket" costs. www.HARP-refinance-MN.com

Jan 15th 2013
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Joe Shamie (Joe Shamie)
#5 ranked lender in New Jersey - 1,412 contributions

The only way to do a "no cost" loan is to take an above market rate and let the lender use the additional premium they will receive from the higer rate to pay your costs. You will pay for the costs one way or another.Joe Shamie 866-970-3400 x274

Jan 15th 2013
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No, either you'll pay for it in the new loan amount or a higher rate. Check us at www.MortgageWholesale.com

Jan 24th 2013
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