No Cost Refinances

When looking to refinance, a borrower has multiple rate and cost options. Borrowers can choose to pay upfront discount points to get a lower interest rate, resulting in high closing costs, go with a 0-point loan that has a slightly higher rate with no or limited lender fees, and the consumer primarily pays third-party costs such as appraisal, title insurance, county recording, etc., or finally, get a no-cost loan.

A no-cost refinance is a refinance in which the lender provides credit in exchange for a slightly higher rate to cover all lender and third-party closing costs, including appraisal fees, title fees, county record fees, etc. The lender provides the credit in exchange for the borrower financing at a higher interest than they could get if they paid the costs themselves.

When determining whether a no-cost refinance is right for you, there are a few factors to consider:

How much your interest rate will increase depends on a variety of factors. Generally, the rate increase will be the minimal on a primary residence combined with a borrower with great credit. Additionally, higher loan balances limit the rate increase, given that the lender’s credit is paid based on a percentage of the borrowed loan amount. Fixed-rate mortgages are also more likely to have a good no-cost option, as adjustable-rate mortgages usually don’t pay out significant lender credits.

Typical Refinance Costs

The exact closing costs vary, as always, and these are affected by the purchase price of your home. Closing costs typically include the following:

Appraisal fees to verify the current market value of a home before a mortgage is issued.
Title service fees for issuing a title insurance policy for the lender.
Tax service fees ensure that the borrower pays their property taxes on time and help lenders protect their interests in case of a loan default.
Survey fees to show the property’s boundaries, detail any improvements, and note critical encroachments or easements
Attorney fees if a real estate lawyer is involved in the transaction.

Many lenders charge loan origination fees, even for a refinance, but Home Got Owned Mortgages doesn’t charge these fees.

A true no-cost mortgage eliminates lender fees and includes a lender credit to cover all third-party closing costs. Many banks claim to offer ” no-fee” loans; however, third-party costs often still have to be paid by the borrower. Other times, mortgage companies simply add the closing costs to the loan balance.

Why Refinance with Home Got Owned Mortgages?

At Home Got Owned Mortgages, you can choose from various rate and cost options, including rates with a lender credit sufficient to cover all lender and third-party fees. Through our Instant Rate Quote tool, our clients can easily compare options side by side and determine which option makes the most sense for their situation.

If you are unsure which refinance option is right for you, we have experienced loan officers who can guide you through the pros and cons of each scenario and help you pick the one likely to provide you with the highest overall savings. Find out if it makes sense to refinance with our Refinance Calculator.

We’re a local, family-owned mortgage firm based in the Washington area. We serve the entire state and the broader Pacific Northwest region, including Oregon, Colorado, Idaho, and California. Please contact us with any mortgage-related questions or to get a rate quote.