| Tips On No Closing Cost Refinance Mortgage |
| Articles - Mortgage |
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A no closing cost refinance mortgage may be a big help, if you are having difficulty paying your mortgage. A refinance is loosely defined as paying off your existing loan with a new loan at a lower interest rate. By lowering your interest rate your monthly mortgage payment is reduced. Interest rates often fluctuate throughout the year and sometimes even throughout the day! Refinancing allows you to capture the savings a lower rate can provide.
A no closing cost refinance mortgage may be a big help, if you are having difficulty paying your mortgage. A refinance is loosely defined as paying off your existing loan with a new loan at a lower interest rate. By lowering your interest rate your monthly mortgage payment is reduced. Interest rates often fluctuate throughout the year and sometimes even throughout the day! Refinancing allows you to capture the savings a lower rate can provide. 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. When the lender does cover your costs it can often look like this. Your mortgage balance before the new loan is processed is $100,000. You go through paperwork, sign new documents, and your new mortgage is for $108,000. Those costs are now a part of your loan BUT to do so... you paid nothing out of pocket. They just tacked it on. Yet now instead of a 6.875% interest rate it is now 5.50%. This is just an example but it is a representation of what actually occurs for many people. 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. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Learn more about no closing cost mortgage refinance. Stop by Francis LeFleur's site where you can find more mortgage refinance tips |