If you are having a difficult time paying your mortgage payment, a no closing cost refinance mortgage may help. By obtaining a lower interest-rate, your mortgage payment can be reduced. Interest rates go down regularly and the way to capture the savings is to refinance. Often the same lender where your mortgage is currently will help you toward a refinance.
Look at your current interest rate and compare it with the loans available and the terms of those loans. Consider refinancing if your existing mortgage rate is higher, you need to get out of an ARM or you will sell your home soon. But be careful because if you plan to sell in the distant future, you many not have time to break even on the home. Why? Because typically your rate will be higher if you choose a no cost option, which we will explain below.
Closing costs are always a part of the mortgage process. Mostly they are underwriting fees, appraisal fees, title fees and escrow. When going with a mortgage where you don’t “pay” for these costs, often the lender will increase your loan rate by .25% – .50% because they are covering those costs for you. They have to be paid and since you aren’t they probably are. The reason they do it is because they will make their money back and more with what they earn off your actual loan. It still may make sense though if the rate is lower than your current rate.
Since some lenders add the closing costs to the loan, if you are refinancing a $100,000 loan then after all is said and done your loan balance would be something like 108,000. This is just an example and will vary from state to state and lender to lender. To some people that might be a bit of a shock but it may make sense for you to do this. Lower monthly payments AND no direct out of pocket costs at closing.
In today’s world, the name of the game is reducing expenses. Keep track of your credit, cut those costs on things you don’t need and find ways to reduce your monthly spending. Refinancing your mortgage is certainly a great way to save. But be sure to do your homework. Read through the paperwork and ask questions and you will come out on top.
Want to find out more about a no closing cost refinance mortgage, then visit Francis LeFleur’s site for more mortgage refinance tips
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