If you are having a difficult time paying your mortgage payment, a no closing cost refinance mortgage may help. By obtaining a lower interest-rate, your mortgage payment can be reduced. Interest rates go down regularly and the way to capture the savings is to refinance. Often the same lender where your mortgage is currently will help you toward a refinance.
First, take a look at your current interest rate and loan term (how long your loan is for) and compare it with what exists in the market. You may want to consider refinancing if your existing mortgage rate is higher or if you have an ARM (Adjustable Rate Mortgage) which is about to adjust higher. Be careful however because if you plan on selling the house over 5 years from the refinance date. This is because you may not have time to recoup the closing costs which have been “rolled into” the new mortgage loan.
Whenever you start a new mortgage there are always fees associated. These usually include underwriter fees, appraisal fees, title fees and escrow. If you choose a no cost mortgage, the lender will cover these fees by either raising your rate by .25% – .50% or adding the costs on to the loan base. Either way if the loan rate is lower than what you have currently, your monthly mortgage payment will drop.
Some lenders will add the closing cost to the loan and have it be a no cash refinance. This is something else you may want. This enables you to refinance without added expense of having to put money up front. For example a $100,000 refinance would become $108,000. Again just an example because every state and lender will have different associated costs. If the mortgage is at a lower interest rate, this is very advantageous to do. No out of pocket costs AND you get a lower monthly payment.
The thing we are all looking to do nowadays is reduce our expenses. What better way to do it than cut, for most of us, the biggest monthly expense we have. Weigh the costs, calculate your savings and ask questions and you will be sure to come out on top.
Want to find out more about no closing cost mortgage refinance, then visit Francis LeFleur’s site with more mortgage refinance tips
