What is a no-cost mortgage ?
Let me be the first to say that many lenders quote rates and programs to get you to apply with them. That being said there are several distinctions we should make when understanding what a no-cost mortgage is. Let’s first talk about all the rest. A zero points mortgage is exactly that, zero points, however you must pay the fees that the lender charges and title and escrow fees as well as an appraisal to determine the value of the property. A zero title fees mortgage means you’re paying just lender fees and no title and escrow fees. A mortgage company might try to make the deal sound sweeter by saying that they will take care of the title fees, but then you are on the hook for their fees as well as the cost of an appraisal.
A true no-cost mortgage is exactly that. This means that the loan officer you are dealing with pays all of the lender fees and the title and escrow fees as well as the appraisal.
The only way you can receive a no cost mortgage is to take a slightly higher interest rate than you would receive if you chose to pay closing costs because lender needs to generate enough overage on the loan to pay all of your non-reocurring and closing costs. Nonrecurring closing costs are things that you pay which are not reoccurring, these include processing fees, title fees, lender/broker fees, and of course the appraisal. The typical minimum loan to secure a no-cost mortgage is 175k and up. Give me a call me a call today to get a Sonoma County refinance loan at today’s historic low rates. Call (707) 217 4000.
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