Mortgage Refinance No Closing Costs Pros and Cons

Mortgage Refinance No Closing Costs

With lower than ever refinance home mortgage rates, homeowners have been scrambling to refinance their homes from existing higher fixed or adjustable rates mortgages in hopes to save on their monthly payments. However, it is a common knowledge that mortgage refinancing can run up thousands of dollars in upfront closing costs that some people might not be able to afford.
Naturally, many homeowners find mortgage refinance no closing costs deals to be quite attractive. However, do mortgage refinance no closing costs exist in reality or is it just a sly marketing trick to make home refinancing more appealing to customers?

Read below where we discuss all mortgage refinance no closing costs pros and cons.

Pros:
The major pro of mortgage refinance no closing costs is paying no money at the time of closing on your refinance loan. If you are currently paying jumbo mortgage rates and struggling to make your monthly payments, it might be very cost effective to consider mortgage refinance no closing costs to get switched from the jumbo rate to the traditional mortgage bracket. In case your mortgage refinance no closing costs helps you save on your monthly payments and you succeed in significantly shaving off your interest rate, it might be a good deal to consider. In the event you started a more financially secure job with a stable stream of income, it might be wise to consider refinancing your self employed mortgage to a traditional home loan allowing you to save thousands of dollars.

Cons:
According to a well-known saying that free cheese if found only in a mouse trap, it may be wise to look more closely if mortgage refinance no closing costs is truly that cost effective. You lender incurs a wide range of costs associated with your loan origination, home assessment, credit check, inspection, processing and these costs must be included in your total loan cost in a form of a higher refinance home mortgage rate.

Bottom line is that even if you decide to go for a mortgage refinance no closing costs option, you will still be paying closing fees and all associated loan costs. The only difference is the timing and overall cost, since with mortgage refinance no closing costs option your costs will be built into the higher than average interest rates that will be paid over time. In addition, due to increased loan balance to include closing fees, you will be paying interest on fees along with your mortgage amount. In the long run, you will be shelling out more money due to mortgage refinance no closing costs.

The only time mortgage refinance no closing costs works is when homeowners make a switch from typically higher 30 year fixed mortgage rates to lock in a much lower interest and have no upfront money to pay the closing costs.

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