NO CLOSING COST LOANS ON REAL ESTATE

2007-03-08 10:33:40

( Financial )



Closing cost on loans include fees related to appraisal, title processing and insurance of real estates. It also includes credit report charges and other costs related to assessment of the real estate. Hence, no closing cost loans refer to the absence of such fees during closing of real estate loans.

No closing cost loans are usually being offered for refinancing mortgages. However, it does not totally eliminate cost at closing. Most lenders only waive lenders fee and still charge for the cost of title insurance, appraisal, credit check and other charges.

Lenders who offer no closing cost loans usually offer a higher interest rate. Thus, borrowers have to look at three things while shopping for no closing cost loans which include interest rate and fees. Lower interest rate is beneficial if borrowers decide to keep the house for a longer period. Low fees, on the other hand, are valuable when you plan to keep the house for a shorter period.

Some lenders offer extra cash back during closing for a higher interest rate. Other lenders, on the other hand, offer no cash back for lower interest rate. Borrowers should be able to negotiate with lenders in terms of interest rate and fees. Lenders will be able to give you a good package if you have a good credit report as well as applying for a higher amount of loan.

Your current mortgage company can compete with the package offered by other lenders to maintain your account. You might also get a discount on some of the closing costs particularly when your current lender will use your old appraisal results. Old appraisal results of not more than six months are good basis to give you discounts on some closing costs.

No closing cost loans might lead borrowers to believe that lenders actually have forgone the costs in closing loans. The term is usually used as a marketing tool to attract borrowers in applying with those lenders who are offering it. Borrowers, though, must look at the rates of interest and amount of charges imposed by lenders to decide which lenders offer the best loan package.


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