Refinance With No Closing Cost

Many people who would like to refinance their home mortgages may be very concerned that they don’t have enough money to cover the closing costs.  If this is you, it is important that you understand that there options for a no closing cost refinance.

With interest rates at historic lows, it is an excellent time to consider a mortgage refinance. There are many different loan products that can meet the needs of most individuals. Even if you are in a bad credit mortgage or if you need a bad credit mortgage, mortgage refinancing may be just what the doctor ordered in order to lower your payments.

With a regular mortgage refinance, you will find that there are closing costs that are similar to the ones that were incurred when you closed on your original mortgage loan. Some are expenses charged by the lender and others are for the title company. If a survey or appraisal must be done, these are often lumped in with the other closing costs.

There are a couple of ways that you can get a mortgage refinance without having to pay those closing costs.  If you refinance with your current lender, they may streamline the loan without closing costs and simply offer the new interest rate and terms.  In other words, the lender is paying your closing costs for you in order to convince you to refinance with him.

Another option that many people select is to increase the amount of the loan just enough above the payoff amount to cover the closing costs.  This effectively means that you are financing those closing costs along with the rest of the new loan, but if the new interest rate is low enough, it can be well worth it. 

The nice thing about the lender paying the closing costs is that you don’t have to bring any money to the closing.  You simply show up and sign the documents.  It is important to note that if the lender is offering to pay all of your closing costs he may also have a little higher interest rate than if you paid the closing costs or rolled them into the loan.  However, if you do the math you may find that this could actually save you money when mortgage refinancing.

If your credit is not as good as it ought to be, you may be able to find similar options with a bad credit mortgage.  Understanding that your options can include no cost refinancing can help you when you try to decide the way to go.