For borrowers looking to save money right away when refinancing their homes, a no closing cost refinance loan is one of the best options available since the burden of closing costs is shifted from the borrower to the lender or broker. Why pay thousands of dollars our of pocket if you don’t need to?
Refinancing without closing costs in Washington State is securing a loan that does not require the borrower to pay any of the closing costs or roll the costs of closing into the loan amount. This requires the borrower to accept a higher mortgage rate (usually .125%-.250% for fixed rate mortgages) in exchange for a lender credit to cover any lender and third party costs associated with the loan. A true no cost loan will include a lender credit to cover all third party costs including title insurance, appraisal fees, government recording fees, credit report and others. Additionally the lender will not charge points, origination charges or any other lender fee. This option is attractive to people who may not have the cash on hand to deal with closing costs but find themselves in need of refinancing their home mortgage loan.
While forgoing closing costs is a way of curtailing cash outlay during refinancing, this does not offset all funds required at closing on a refinance loan like the prepaid escrow account (typically for property taxes and homeowner’s insurance) and prepaid interest. These additional funds can often be rolled into the loan amount during the refinance process for those borrowers seeking no money out of pocket.
Is A Refinance Without Closing Costs Right For You?
If you’re willing to accept the higher monthly payment over the course of the loan term, a no closing costs refinance loan may be the right choice for you. Start saving thousands of dollars right now by spreading the costs over monthly payments in the years to come. This allows you the flexibility to do what you want with your money today and not tie it up in financing fees and costs unnecessarily. Furthermore, if rates drop in the future, you can go through the process again and realize even greater savings in the future!
Homeowners who aren’t certain how long they’ll be in their current home should also consider a refinance without closing costs since they might not be in the loan long enough to realize the long-term savings associated with a slightly lower interest rate.
If you’re asking yourself whether a refinance without closing costs is the best option for your situation and still aren’t sure, you should enlist the years of experience the mortgage loan experts at Sammamish Mortgage offer. The real estate market is filled with variables that change from month to month, or at times from day to day. Securing home financing can be intimidating where smart buyers must constantly adjust to shifting trends in the housing market to get the right loan for their situation. Don’t make a mistake with your refinancing loan by not knowing what your best options might have been, Instead, contact us for a free consultation about your home mortgage options today!