Skip to main content
_FB_2018-Icons-finalized-cleaned-up_new_FB_2018-Icons-finalized-cleaned-up_newGroup 9
Back
Scroll to top

Is It Possible to Get a Mortgage Refinanced with No Closing Costs?

Homebuying 3 min read

Ready to talk to an expert?

When it comes to refinancing a mortgage, you need to spend money to save money. Closing costs can amount to thousands of dollars, depending on the home loan. This is why the prospect of a mortgage refinance with no closing costs is so attractive.

But, is it real or a myth? Here’s the truth about zero-cost refinancing.

What “No Closing Costs” Really Means

When a mortgage refinance comes with no closing costs, consumers should be wary. That’s because there is actually no such thing as a cost-free mortgage refinance. It requires a variety of billable administrative research and work to complete:

  • Credit report fee
  • Appraisal Fees
  • Settlement or Attorney Fees
  • Title Fees
  • Recording Fees
  • Third party verification fees

The homeowner can pay these costs at closing, or the costs can be integrated into an ongoing payment plan. When a mortgage refinance has “no closing costs,” the fine print may require higher interest rates to cover what you would normally pay at closing.

Why You Pay for Closing Costs

Closing costs are part of the home purchase process. Since a mortgage refinance loan is viewed as another type of home loan by lending institutions, refinance packages require the same closing procedure.

Here are some of the most important closing costs:

  • Lender’s and Owner’s Title Insurance—Protects you from any title issues and ensures you are the official homeowner.
  • Appraisal—Confirms the value of your home and any equity gained since your initial mortgage.
  • Survey—Identifies property lines, structural changes, and geologic features of your property.
  • Insurance Reports—Conducted to determine if the home is in a flood zone, fire danger, etc.
  • Loan Origination FeesPaid for processing, lender research, and underwriting.
  • Home Inspection—Determines if any aspects of your home are in need of repair.
  • Settlement/Attorney Fees—One of the largest fees the borrower will pay.

All of these costs are necessary components of the refinancing process. Without these services, refinancing would be extremely confusing, complicated, and time consuming.

Closing Costs Can Be Regained

While closing costs may seem like a high price at the time, you can regain your losses in a reasonable amount of time by locking in a great refinancing rate. First Bank can help you find the best refinancing rate for your mortgage*, so you can save money in the long term and build equity in your home. Contact us today to discuss your mortgage refinance options.


*Loans subject to credit approval.

———
Sources:
https://localfirstbank.com/article/what-are-all-these-fees/
http://www.bankrate.com/finance/mortgages/is-no-closing-cost-mortgage-for-you.aspx
http://homeguides.sfgate.com/refinance-mortgage-closing-costs-2551.html
http://www.forbes.com/sites/moneybuilder/2012/03/28/the-no-cost-refinancing-myth/

Ready to talk to an expert?

Share:
First Bank’s Good To Know Logo
Sign up for our newsletter and be the first to know about new tips, insights, and products from First Bank.
First Bank may use this email address to contact you about products, services, and promotions.

You may be interested in...

First Time Buyer? For most of us, buying a home is the largest purchase we’ll ever make. If you are a first-time homebuyer, you may be asking questions like, “What is a first home mortgage?” What is a First Home Mortgage? A first home mortgage is a loan you will use to purchase your first home. These loans can come in a variety of forms, from conventional home loans to FHA loans for first-time homebuyers. First Bank offers the following mortgage loans* for first-time homebuyers: Conventional Loans Government loans Professional loans Construction loans Jumbo loans In addition to providing a selection of mortgage opportunities, First Bank also offers a wealth of information about what a first home mortgage is and what can be expected when shopping for your first home. Tips for Buying Your First Home Knowing what a first home mortgage is can go a long way toward easing the process of turning that key for the very first time. U.S. News and World Report highlighted some of the most common mistakes first-time home buyers make and how you can avoid them. Among them were: Searching for your dream home before being pre-qualified for a loan. The reality of what a first home mortgage is can be vastly different than what you were hoping for. Take the time to seek out a mortgage loan specialist at a place like First Bank so you can find out what you can afford and what your expected monthly expenses will be. Thinking short-term. First-time buyers are often so focused on moving in that they don’t ever consider moving out. Chances are, you’ll one day be ready to move into another home as you start a family or change jobs. Think about the factors that will affect how you’ll be able to sell your home in five years such as economic growth in the area or neighborhood expansion. Making an emotional decision. It’s important to sign a mortgage paper with your head and not with your heart. You may be overlooking some serious red flags such as expensive repairs, structural damage, or mold simply because you’re in love with the open layout. Find a First Bank Near You Ready to get started? Check out First Bank’s guide 3 min read
First Bank logo
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognizing you when you return to our website and helping our team to understand which sections of the website are the most popular and useful.