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is there such thing as a zero cost refinance?

I have an FHA loan and 700+ credit by NStark_237_441 from Leesburg, Florida. Sep 11th 2012 Reply


Peter Botros (PeterBotros)
#70 ranked lender in New York - 895 contributions

Some lenders offer to pay for your closing costs. That option is paticularly popular among FHA Streamline Refinances. Contact your local lender for details and options. Best Of Luck!

Sep 11th 2012
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Barb Lanis (BarbLanis)
#70 ranked lender in Illinois - 663 contributions

If you want a zero cost refinance (i.e. no closing costs), the lender can pay them on your behalf by moving up the rate just a tad to pay for them. You can also roll them into your new loan. However, I see you currently have an FHA loan. You will likely want to do a Streamline because no appraisal is necessary. With that type of refinance, you cannot roll closing costs into your new loan. You must either pay them out of pocket or have the lender pay them for you. I am also a Florida lender.

Sep 11th 2012
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,550 contributions

Not really... nobody works for free.. title companies insure loans, and prepare the closing documents, attorney's don't review closing doc's for free , and your loan officer does not work for free either..... There is a way for you to refinance without coming out of pocket and without adding costs to the loan amount.. by choosing a rate higher than the par rate being offered, you can use the lender rebate to pay for your closing costs.. so you don't pay up front, you don't add anything to your loan,.. in the long run, you pay the costs one way or another... every other offer is just a play on words.. 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

Sep 11th 2012
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Bert Carpenter (BertCarpenter)
#38 ranked lender in Arizona - 1,819 contributions

Asking if there is zero cost financing is like your boss asking if you'll work for free. The answer is "NO!" The question is how you pay for the costs. In a refinance, the costs for the refinance, which include title, appraisal, lender fees and possibly your fresh impounds, can be paid in one of three ways. Added to the existing payoff and included in the new loan balance. You can also bring the cash to the table necessary to pay the costs if you do not want to add them to your loan. The third method for paying them is through the interest rate. For each 1/8th you increase your interest rate above the "Par" rate, you will earn credit from the investor that you can use to pay for your closing costs. The advantage here is that the investor pays your closing costs. The disadvantage is that in turn, you are paying those monies back to the lender over time through higher interest payments. In most circumstances, the point at which you begin paying more in interest than the costs would have been is about 4 years. If you think you are going to be in the home for more than 4-5 years, then it probably makes more sense to add the fees to your new loan and take the lowest possible rate. There is no hard formula since the amount of the credit does change as the interest rate market fluctuates from day to day. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com 888-889-9950

Sep 11th 2012
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Ken Burrows (mortgagesforamerica)
#19 ranked lender in Nevada - 572 contributions

You can roll your closing costs into the loan if there is sufficient equity in the property. Give me a call and I can explore all of the options. 888-320-7888. - Ken

Sep 11th 2012
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Rob Ziebart (rziebart)
#92 ranked lender in Florida - 6 contributions

I'm in Ocala and have been doing mortages in Lake and Marion Counties for 12 years. You can do an FHA streamline refinance and no closing costs can be rolled into the new loan so your loan amount stays the same and your rate drops, no appraisal needed even if you owe more than the home is worth. The thing that nobody tells you is that there are always closing costs that need to be paid somehow so we as lenders have to pay for these costs (doc stamps, title recording etc.) out of our profit so the rate on the streamline loans are usually .25% higher to accomodate these costs, therefore the rate may be a 3.875% 30 yr fxd today on the refi versus a 3.625% you'd get on a purchase with FHA. It only takes a few minutes for me to crunch the numbers over the phone so let me know, no obligation. My cell phone number is 352-875-6907 or office line 352-304-5700, just ask for Rob. Thanks.

Sep 11th 2012
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LISA OGLESBY (ctcloan)
#161 ranked lender in Florida - 13 contributions

Hi Leesburg! This is possible to have no costs and only have your taxes and insurance costs to bring to closing. I will be happy to discuss options with you. Lisa M. OglesbyMobile: 386-569-3761 / fax 888-267-7306Office: 386-585-8021Mortgage Specialist

Sep 11th 2012
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