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I'm refinancing my existing mortgage and my lender has offered me a no-cost refinancing. Is that a good option for me? Should I go with it?

Niicss · Posted: Thu Nov 03, 2011 12:49 am Post subject:

I personally do not believe that no-cost refinancing is a good option to go for. No-cost mortgages don’t eliminate costs. They will only convert the costs paid upfront to costs paid over time. No-cost does not mean no-cash. Moreover, the lenders may charge you a higher interest rate if you go for a no-cost refinancing.

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No cost mortgage=higher rate. It is a marketing method used to get you to call. I believe in calling things what they are. With that said financing your closing cost into your interest rate can make since if you do not plan on staying in the home long, and do not want to increase the balance. The exception to this is when you are going down in years which would excelerate the amount your paying toward

sabrinatoss · Posted: Thu Nov 03, 2011 9:02 pm Post subject:

Hi sunshine,

Sometimes refinancing involves the issuance of equity in order to decrease the proportion of debt in the borrower's capital structure. As a result of refinancing, the maturity of the debt may be extended or reduced, or the new debt may carry a lower interest rate, or some combination of these options.

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raymond · Posted: Tue Nov 08, 2011 7:19 am Post subject:

Some banks are offering no-cost/no-cash refinances to their preferred clients, to keep them from moving to another bank. To confirm it's an actual no-cash offer, the APR should be the same as the interest rate. Additionally, the Good Faith Estimate should reflect 0 costs.

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