I have been trying to refinance my current home loan. After missing few opportunities to refinance the loan in last 3 months, I locked the mortgage rates last month, just before Thanks giving week for 5.50% But, rates are very volatile since then.
Why No Cost Mortgage?
Shopping for mortgage is not an easy process. Lenders try to confuse the borrowers with so many loan options. So, my best advice would be to understand your needs and decide on what you want. Then talk to the mortgage brokers or directly to the bank.
Best way to compare the mortgage rates offered by different lender is apple to apple. But, comparing no cost mortgage is very easy. You need just the following information for comparison
- Mortgage Refinance Rate
- With Escrow Account or without
Advantage of No Cost Mortgage Loan
Usually, most banks don’t have No cost loan advertised. You have to ask for it. Since, broker or lender pays for the closing fee, rate will be typically 0.125 to 0.50% higher than paying points, closing cost or origination fees. But, with if mortgage rates drop in few months, I could refinance the home loan once again.
If I had paid the points to lower the rates, then there is break-even period associated to recover the additional points paid to bring down the rates. So, I and few of my neighbours are going with no cost home loan.
No Cost Mortgage for less than 200,000 mortgage value
Looks like bank cannot recover the closing fees if the loan amount is less then 200,000. Few of my friends tried to find no cost for mortgage less than 200,00, but there are no investors/bank willing to approve the loan.
After weeks and months of research, I have found some very good information that will help to find the low mortgage rates. It’s simply a game. It need practice and time. But, if that is going to save few thousand dollars in mortgage payments, I’m ready to play the game. More about different and effective way to find the best and low mortgage rates for no cost loan.
{ 1 trackback }