What is a no cost refinance and does it make sense for me?

Refinancing to a new lower rate may look like an expensive option until you consider a no cost refinance.  With a no cost refinance you will pay a slightly higher interest rate instead of paying closing costs.  This will allow you to lower your interest rate and mortgage payment without adding to your principal loan amount.  If you financed a home on a 30 yr fixed rate just 1 year ago you more than likely at a rate of 5.125% or more.  With a no cost refinance you could lower your rate by .375-.5% without closing costs.  On a $200,000 loan amount you can look to save an additional $16,000 over the life of the loan or you could keep making the same payment and cut 32 months off the term of your loan.  By reducing your term the savings are closer to $36,000.   Since you do not pay closing costs the savings start with your vary first payment.  If you would like to do home improvements or pay off debt this is still a great choice.  A no cost refinance is a great option to consider for any mortgage financing and can be used with both conventional and FHA financing.  Although this is a great tool you should consider all available options when considering mortgage financing. 

 

With 15 years of mortgage lending experience I provide both options and solutions rater that just a rate and a payment.

 

 

Brent Diebert                                                   

BrentDiebert@ArlingtonBank.com                                       

Office    614-486-3843                                                      

Mobile   614-571-3554                        Apply Now       

Team Fax 614-430-8116                       

 

 

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