When you come to a decision that you want to refinance your loan, usually there are many fees you have to pay. Mortgage Refinance No Closing Costs is a rare term in the industry.
Closing costs are at times very hard to afford and can be avoided, but there is a down side – Low Mortgage Interest Rates will go up.
But there are ways to get a no fee mortgage refinance. Why would anyone do that? If you want to flip your house (buy a house with a relatively low interest rate, hold it for a short period of time and re-sell it), or if you simply don’t think you would still own this house in 5 years or so – it might be valuable for you.
Mortgage Refinance No closing Cost can be attractive but also dangerous; Mortgage refinance without closing cost can help you avoid fees like title insurance, escrow charges, recording fees, appraisal costs, broker fees and more, but you will still have to pay insurance, Low Mortgage Interest Rates, and all applicable taxes.
Online there are different websites that have a kind of calculator that can help you find out whether mortgage refinance with no closing costs is a smart choice, or if you break even or lose any money taking this mortgage over other. The calculators do this by finding out how much you would pay with the mortgage refinance with no closing cost every month for the length of the loan and contrast it to the cost of getting a loan with closing fees plus the closing fee itself. At this point it subtracts one from the other and comes up with an amount of months that is called your break-even point.
If you think you’ll still own the house after this period of time – taking a no closing cost mortgage doesn’t pay off. At that point it is better for you to pay the closing costs and save money later on, than doing what you think is saving you money but actually will bring you losses in the future.
If you do the math you realize that if you’re keeping the house for 5 years or less it is worth getting a no-closing-cost. If you keep it for a longer period than that, you lose the advantages of the refinancing with no closing costs, and actually start losing money.
When looking for a loan, check all types of mortgages available and find the one that fits you the best. Make sure you check the interest rate, whether it’s a fixed or variable rate, if it has closing fees and what are they.