"No Cost" Means Costs Built In To Rate"No Cost - No Points" mortgages are constructed for consumers who don't want to understand the niceties of mortgage lending. There are no lenders who are going to offer a mortgage loan for which they will bear the costs of your application and the administrative requirements to write it. All a lender who offers this program will do is add a factor to the rate you will pay to cover the cost involved. If the loan is likely to be somewhat short term you may save money this way and if not , it is likely to cost you more. There are a few legitimate lenders who offer "No Cost - No Points" loans. As always, you have to be aware that there are unscrupulous lenders who use the category as a come - on for bait and switch operations. And you must be sure that there are not hidden costs to you that the lender defines as outside the "cost" definition. Most of these lenders have a low threshold for the total loan and many use $250,000 as a base starting point for their programs.
The fees that lenders charge will normally use several of the following charges when you apply for a loan. Some of these are charged as an out of pocket fee on application and some are charged as part of your cost on closing. The latter are likely to include some charges that are inappropriate but borrowers are much more likely to ignore at closing and "buy in to" to obtain the loan. The typical fee list includes: * Administrative Fee * Loan Origination Fee * Processing Fee * Underwriting Fee * Wire Transfer Fee * Mortgage Broker Fee * Points * Document Preparation Fee * Tax Service Fee * Flood Certification Normally, the "no cost - no point" loan will bear an advance on the interest rate being charged by competitors that will range from .250 of a point to .500 of a point. Some consumers prefer this type of loan so that they can avoid trying to understand a complex closing where many different fees are charged. There are third party fees such as appraisal, courier, notary, title insurance and recording fees that will be excluded form the "no cost" provision. Make sure you ask if there are any other fees to be paid at application or closing.Don't be confused by discount rate points which may be used to reduce the interest rate being charged. Some of the national lenders who are currently offering "no cost" loans for refinancing are: eLoan Amerisave National Mortgage Alliance Better Choice Loans Also competing in the field are: Bank of America Countrywide (currently in the process of acquisition by Bank of America) Quicken Loans |