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No Cost Refinance.

When comparing "no cost" deals what exactly should i look for? Are there fine prints I should know about? Would comparing actual rates suffice? Any help is appreciated. by BillSa_104_290 from Canton, Ohio. Jan 30th 2012 Reply


Cody Bellah (cody@communitymortgagekc.com)
#17 ranked lender in Missouri - 76 contributions

When the bank or broker is doing a NO COST loan, that means you are getting a little higher rate than if you were to not do a NO COST loan. If you have any questions please feel free to call me @ 8162560013 (Cody Bellah)

Jan 30th 2012
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Michelle Curtis Loan Originator NMLS 401173 (EmbassyFundingLLC)
#77 ranked lender in Florida - 2,240 contributions

Cody is right. You will pay cost in one way or another. With a no cost loan you will get a higher rate, therefore you really aren't getting a no cost loan. I believe that they are not the way to go unless you do not have a choice. If you compare the numbers on a loan that you pay closing costs to one you don't most of the time you will see you will save money in the long run by paying the closing costs. Michelle Dema 201-962-3555

Jan 30th 2012
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

Hey Bill.. the best way to compare "No Cost" refinance is to look at your payoff vs. your new loan amount. A lot of lenders will say NO COST, and what they really mean is no cash out of pocket... if you compare your payoff vs new loan amount and take that difference and add any cash you have to bring to the table, and deduct your escrow refund, and divide that number by your monthly savings, that will show you how many months you need to save to "Break Even"... sound complicated?? Best advice I can give you is to shop for a Loan Officer rather than a rate or cost sheet... once you find the right LO.. someone you can trust, they will be able to show you the best deal possible and make it easy to understand, and because it's coming from someone you can trust, you will feel much better about it.. Here's a great resource to "Check Up" on the loan officer to be sure he is licensed and educated... http://www.nmlsconsumeraccess.org/ good luck.. WilliamAcres.com

Jan 30th 2012
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Bert Carpenter (BertCarpenter)
#37 ranked lender in Arizona - 1,823 contributions

For more details on the pros and cons of a "No Cost" Refinance, click on my picture which will take you to my profile page. Below my picture select the "Blog" tab. There is an article I posted last week on No Closing Cost Loans that should answer your question. When you are ready, contact a local Mortgage Banker/Broker, rather than one of the big banks. Unlike a bank employee, who is most likely just an order taker, a Mortgage Broker/Banker is Trained, Tested and Licensed in all aspects of Mortgage Origination. He/She will have access to loan products of many lenders, not just those of one bank, and can properly guide you. But more importantly, He/She is trained to take a look at the various different options available to you and guide you into the one that makes the best sense for your situation. Don't forget to check out your selected Mortgage Originator at the National Mortgage Licensing System at www.NMLSConsumerAccess.org ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com

Jan 30th 2012
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Tim Bradford (Tim Bradford)
#6 ranked lender in Ohio - 145 contributions

Bill, THERE IS NO SUCH THING AS A NO COST LOAN!!!!!!!!!!!!!!!!!!! You may not pay closing costs, however in order to avoid them you will pay a higher Rate of Interest. I believe it is a Violation of Federal Regulation to state"NO COST" loans without sufficeint explaination. I am an Ohio Lender and if you want to give me more specific information I will gladly assist you in determining if it makes sense for you to consider refinancing.

Jan 30th 2012
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Ralph Richard Guertin (ralph@absolutelowrates.com)
#136 ranked lender in Florida - 796 contributions

Hi Bill, not a Ohio lender but a good place to start is comparing APR's that includes costs....broker to broker and banker to banker

Jan 30th 2012
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Chris Brengelman (chrisbrengelman)
#46 ranked lender in Ohio - 28 contributions

Hey Bill,Many of the answers here are correct. There ALWAYS is cost that goes into loans, however the well known meaning of costs when speaking of a refinance or purchase, it means the CLOSING COSTS. Typically, we can charge .125%-.25% higher rate and the costs themselves vanish. Now you will have a slightly higher interest rate, but this depends up to personal preference. If you are planning on staying put in your current home, I would probably take the lowest rate and accept the costs being rolled into the loan. However, if you are looking to move in the next1-3 years, you probably are better off taking a slightly higher rate with no costs. Depending on the loan amount, the variance in payment between the 2 options is minimal. This is a subject you would want to weigh out with your loan officer and run figures for both potential loan scaenarios. A loan officer that is willing to take the time to explain the exact differences between the two loans will ultimately aid you in your final decision.

Jan 31st 2012
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Lynne Dewar (ldewar)
#46 ranked lender in Arizona - 16 contributions

Hi Bill,The no cost refinance is usually about .375% to .5% higher in interest rate in order to pay for the refinance. Make sure you get a cost worksheet showing enough lender credit to pay the closing costs.

Feb 1st 2012
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Lynne Dewar (ldewar)
#46 ranked lender in Arizona - 16 contributions

The interest rate is usually .375% to .5% higher to pay for the no cost refinance. Make sure you get a cost to refinance worksheet which shows that the lender credit is sufficient to pay for the closing costs.I would be happy to assist you with your no cost refinance.Please call Lynne Dewar at (800) 551-1188

Feb 1st 2012
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