No Closing Cost Refinancing

October 18, 2010

A commonly misunderstood term is no cost refinance or no closing cost refinance. When people think of this or hear of this, they usually assume that costs or fees are waived entirely while still maintaining the low rates. This is wrong. There is no such thing as ‘no cost’ and there is certainly no such thing as ‘free’ in the business world. Everything has a payment of some sort though the manner in which you provide compensation might not be obvious at first. No cost refinancing is a sneaky way to attract customers with ‘zero-cost’ claims and then catch them with interest rates that might put them in deeper debt. In order to properly understand the implications of the term ‘no cost’, learning its definition with our refinance guide is in order.

What is No Closing Cost Refinancing?

No closing cost refinance is a transaction where you don’t have to pay upfront fees of any sort. The broker or lender will be the one to pay all the various settlement costs for the mortgage. It isn’t a new kind of refinancing option but it isn’t very well known either.

Pros and Cons of No Cost Refinance

A refinancing closing cost can often reach up to quite a lot of money, especially for upfront payments. A lot of people would probably think twice before handing over a big chunk of their cash and actually deciding if refinancing for cheap mortgages is really worth the price. [Read more]