No Closing Cost Refinance Program
No-cost home financing seems like an idea that’s too good to be true. But it’s here, and it’s waiting for homeowners at Family Mortgage. No closing cost loans can be used for either a refinance or a purchase transaction, although they are most commonly associated with a refinance. By paying points, you can buy the rate down. Well, the reverse is true. If you decide on a loan with a rate higher than the base rate, we as the lender are paid the opposite of discount points – called Yield Spread Premium. We can use these funds to pay some or all of your closing costs.
No one works for free, the slightly higher rate gives us the funds to pay all of the non – recurring closing costs. The no closing cost method does not increase your loan balance by one penny and can save you hundreds of dollars per month. Should interest rates continue to decline, you can simply refinance again to obtain additional savings.
- You are not sure how much longer you will stay in the house or you may be relocated within 3 -5 year.s
- Your loan balance is > $200,000.
- You are not sure how much longer you will stay in this new mortgage. In Atlanta, the average loan pays off in less than 4 years. It typically takes 12 to 30 months to recapture closing costs if you decide to pay them when refinancing your home. Remember that you don’t just refinance to get a lower rate. It could be for a medical emergency, college education for your children, to remodel the house etc.
- You believe that there is a chance that rates might go lower in the future. If they do, we can refinance you once again with no costs. As part of our service, we will keep an eye on the rates for you and contact you when it makes the most sense to refinance. Then, you will be able to lower your payment, twice, for FREE!
Who Should Not Choose A No Cost Loan?
- You believe that rates will never go lower than they are now and you are not planning to move for at least 5 years.
- You believe that rates will never go lower than they are now and you are not planning on needing to tap the equity in your home for any reason for at least 5 years.
- Your loan balance is < $200,000 and your credit is not very good. The exception to this is if you have a smaller loan balance and you think you will definitely be out of the house within 3 years. The smaller the loan size, the higher the rate will need to be to get enough yield spread premium from the lender to pay your closing costs. See comparison for your personal loan amount.