No Closing Cost Refinancing Loan

If you are about to refinance your mortgage there are many banks and financial lending institutions all proclaiming their "No Closing Cost Refinancing Loans". You have to ask yourself if these refinancing loans are truly "no cost" or is just yet another clever spin to fool you?

Take note of the following when refinancing your home loan and you could save a bundle of cash.

Let's see exactly what a "No Closing Cost Loan" really means to your bottom line. Lenders never give you a great deal and they never waive their refinancing fees.

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They may indicate that a certain home loan refinancing package has certain fees waived but just like a magician, we really need to see what the hidden hand is doing because this is where the action is really taking place. This is where the discreet markups on other aspects of the loan are taking place which you are not meant to see.

Banks and lenders claiming a single really low one cost, or zero refinancing fees, are hiding something on the back end so you need to be very careful. It is not uncommon for companies to add a half to three quarter percent to the mortgage rate as commission. Additionally, a factor called Yield Spread Premium can increase your "no cost" mortgage refinancing by a further half percent.

You are now looking at an inflated, or even a hyper inflated, mortgage rate which over time, with your monthly mortgage repayments, will cost far more than initially paying off the standard mortgage refinancing costs. This "no cost" option can seriously cost you a lot of money.

Whether you consider the practice deceptive or not depends which side of the fence you are sitting on but you can be absolutely sure of one thing and that is that there is no bank or lender that is honestly going to give you a no cost refinancing mortgage over the term of the loan.

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