No Cost Mortgage Refinancing

by Ron from Red Wing, Minnesota USA

Ask Kate: No Cost Mortgage Refinancing My mortgage lender has offered me a significantly lower interest rate on a 30 year fixed rate mortgage. They say there are ABSOLUTELY NO CLOSING COSTS. What's in it for the mortgage company? Why would they do this? Thanks. Ron

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Kate Answers: No Cost Mortgage Refinancing

Hi Ron, Be careful and proceed with caution. Sometimes "no closing costs" means a higher loan amount to finance fees. With true no cost mortgage refinancing, your current loan amount will not increase.

You also need to eliminate surprise by making certain your interest rate has been locked and if so under what terms and for how long.

And thirdly, ask whether the mortgage interest rate and monthly house payment is fixed for the entire 30 year term.

There are three signed documents you are entitled to receive which should answer these crucial questions:
  1. A good faith estimate

  2. A mortgage interest rate lock agreement

  3. A 30 year fixed rate mortgage disclosure If you aren't sure how to analyze these documents, perhaps you have a friend, relative or trusted adviser who can assist.

    In the meanwhile, I recommend looking over the links at the bottom of this page. They lead to other pages on my website with surprisingly simple information on refinancing. I hope you will let me know if you have more questions.

    Take a moment to bookmark No Cost Mortgage Refinancing to your favorites and visit Question and Answer - Best Mortgage Rates for Refinancing which is full of solutions based on inquiries from other Contributors just like you.

    Ron, please come back and visit often. Help me spread the word by sharing my website with your friends. Best Wishes,

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You can also ask Kate about your mortgage at Refinancing Advice The Nuts and Bolts.

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