No Closing Cost Refinance

When you are refinancing your mortgage because better rates are available, it can be appealing to look for a no closing cost refinance where you won't pay any additional upfront fees to the lender on top of your new (hopefully lower) payments.  You can search online to find the best possible no closing cost refinance for your financial position and the rates available today.

If mortgage rates have fallen and you need to refinance your mortgage in order to have a more reasonable monthly mortgage payment, the closing costs are an expense that many people tend to forget about.  This is a source of profit for the mortgage company or lender who is issuing your new loan and covers the costs of loaning you the money and paying off your old loan.  If you don't have much cash on hand but desperately need to refinance now, finding a no closing cost refinance plan can be ideal. 

Like most anything in the world, you don't get a refinancing without closing costs for free: the closing costs are a huge source of nearly free revenue for the lender and they won't be willing to give it up simply if you ask.  Instead, you'll be paying a higher interest rate in order to forego the closing costs.  If you ask about the interest rate of a normal refinancing versus one no closing costs, you'll find that the interest rate on the no closing cost refinance is higher.  This can be fine if you don't have cash on hand for the closing costs, but it will mean that your monthly payments are a little higher and that you'll be paying for the closest costs many times over for the next 10 years or more, just spread out so that it feels like less. 

In some cases, it can make sense to take out a short term personal loan in order to cover the closing costs of your refinanced mortgage so that you are paying the absolute minimum interest over the next ten to twenty years.  This of course only makes sense if you think you'll be able to pay off that personal loan over the next couple of months. 

It's worth shopping around to get the lowest possible interest rate for your no closing cost refinance if possible since different lenders may charge different amounts for the privilege of skipping the closing costs.  This is another case of there's no free lunch: you'll either pay now for closing costs, or pay much more later along the way if you skip closing costs now.