Christian No Closing Cost Mortgage Refinance
Knowing terminology when considering a Christian no closing cost mortgage refinance can be extremely important. A no cost loan is not the same as one where the buyer has no out-of-pocket costs due at closing. In the latter scenario, the additional costs are simply inserted into the loan amount, so the buyer is still paying for them. In fact, because of interest costs, the buyer is actually paying more money than if he or she had merely paid these costs at settlement time! When Jesus sent the disciples out to preach, He told them to be as ...wise as serpents and harmless as doves. (Matthew 10:16). Likewise, those shopping for refinancing deals need to be informed yet honest and respectful as they deal with those in the financial profession.
Another deceptively similar term is a no fee loan. Believe it or not, this does not mean that the buyer will not have to pay any fees during the process of closing on a loan. It simply means that the lender is willing to absorb charges for certain fees, sometimes called 'garbage fees'. Garbage fees are things like document fees, administration fees, or any type of processing fees. They are somewhat 'nonsense' fees, seemingly mostly tacked on to increase the lender's profits. Simply removing these fees does not make the loan a no closing cost mortgage refinance either.
What, then, is a true no closing cost mortgage refinance? In order to answer that question, first take a look at the fact that all loans have costs associated with them. Basically, there are two kinds of costs: recurring and non-recurring. Non-recurring closing costs (NRCCs) include fees for appraisal, credit check, title, escrow items, notary/recording charges, underwriting and the above-mentioned 'garbage fees'. Points are sometimes included in this category. Prepaying points is like paying the interest on a loan ahead of time. Points are sometimes called discount points or origination fees. Discount fees are paid to the one who is actually funding the loan, while origination fees go to the broker who is processing the loan. A point is 1% of the total loan amount. On a 200,000 loan, a single point would cost $2000. Two points would cost $4000. Except for these points, the non-recurring costs are known as the borower's base closing costs. Many times, in a refinancing situation, the lender will pay for NRCCs. A seller could also provide a NRCC credit to help cover the buyer's costs. Sellers do not pay for recurring costs.
Watch out for lenders who offer to 'pay' the NRCCs through what is known as a Yield Spread Premium (YSP). All this means is that the borrower's interest on the no closing cost mortgage refinance will be increased in order to cover these costs. If the lender raised the points a single point in order to cover closing costs, it would result in an interest rate increase of about .25%. Sometimes lenders will simply pocket any 'leftover' profit from the adjustment as additional profit from the loan.
Recurring costs usually involve current mortgage interest, property taxes and insurance. They usually are required at settlement, although in reality they are not considered part of the cost of obtaining the no closing cost mortgage refinance loan. In a way they are almost transitional fees, in that they take care of details in the period between the end of one loan and the beginning of another. However, these fees will continue, or 'recur', during the new loan, since the buyer will continue to pay interest costs, taxes and insurance.
Make sure that it is clearly spelled out just exactly what the no closing cost mortgage refinance means. Having a 'zero points' loan yet paying lender fees or third party expenses does not equal a no-cost loan. Having to pay 'zero fees' to the lender, yet being responsible for 'surprise' third party costs at settlement is likewise unacceptable. Advertising 'no cash' closings while piling fees into the total cost of the loan and then charging interest for this privilege is insulting the buyer's intelligence as well as costly for the borrower. In a true no closing cost mortgage refinance, the lender does not collect fees and pays certain settlement costs, but does not raise the amount of the loan in order to do so. Mortgage companies generally add on .5% to .75% for their own commission, so they will be compensated for their efforts without needing to add another .5% or more to the loan for closing costs. The latter situation will result in the buyer paying more each month for as long as he or she has the loan. This can add up to a sizeable amount over the course of the loan.
A buyer should determine to get a written estimate from several lenders before committing to any one of them. This is important for several reasons. First, a buyer will have a beginning point so that later, when he or she receives the final estimate (which is due at least three days before the closing date), costs can be compared and any additional elements explained. This also lets the lender know that the buyer is both informed and engaged in the process of shopping for the best rate. On the final estimate, the buyer can check to see that the only costs being paid for a no closing cost mortgage refinance are the recurring costs of interest, taxes and insurance. Make sure to receive a credit for any non-recurring costs listed in the final estimate. Remember to negotiate in a firm yet calm and pleasant manner.
Christian No Cost RefinancingNo cost refinancing usually means that the lender agrees to pay all normal closing costs when refinancing a mortgage. Some of these costs include the loan origination fee, appraisal fee, credit report fee, attorney's fees and title fees. One reason to consider no cost refinancing might be because of job loss or a job change resulting in lower income. Current monthly payments may be too high to maintain and as a result payments are late and charges are mounting up. Late payments are resulting in a lower credit score and credit history is being damaged. Damaged credit history will mean paying higher interest and fees for future purchases. To avoid damage to credit consider refinancing with a lower interest rate. This should also result in a lower monthly payment and shorter payoff terms.
Today's market still reflects low interest rates for mortgages. Now is a good time to consider refinancing to take advantage of these current rates before they increase. Many lending institutions and mortgage companies offer competitive rates along with many other advantages. No loan fees, or up front costs to borrowers. Some companies advertise no appraisal needed and no income verification. If a consumer has been faithful to make payments on an existing mortgage it is very easy to acquire a new agreement with limited hassle. "And he said unto him, Well, thou good servant: because thou hast been faithful in a very little, have thou authority over ten cities" (Luke 19:17).
When considering no cost refinancing, think about changing an adjustable rate to a fixed rate. Acquiring a low fixed rate will mean that the interest rate will remain the same over the entire life of the loan. It won't fluctuate with changing markets. If the borrower already has a fixed rate then it is possible to refinance with a lower interest rate. Some lenders guarantee that there will be no cost charged to the borrower nor will any of the costs will rolled into the agreement. With this type of offer how can one go wrong? More than likely the consumer who takes advantage of this type of deal will end up paying much less for their home in the long run.
Many lenders online offer no prepayment penalties on no cost refinancing. Do a search on the Internet and ask for a free quote. Mortgage companies may require current mortgage payment history. Additional documents needed may vary depending on the institution. It is important to get competitive comparisons on mortgage loans since some companies have stipulations that might apply. Some organizations offer to pay all the closing costs to refinance a mortgage but they don't offer competitive interest rates. Be sure to ask about other fees that might apply with this type of loan.
A mortgage loan refinance offers the means to a quick and efficient debt consolidation and a way to get a lower interest rate on one's current home loan. The homeowner with available home equity will be a prime borrower to whom consolidating lenders will offer their help. The lower rates currently available are a good reason, even if there is no other, to obtain refinancing. The process will result in lower amounts of finance charges to repay and will make available home equity cash-out to aid in consolidating consumer bills such as credit cards, car loans, or other personal purchases.
The lower percentage rates of the past decade have resulted in a greater number of new loans as well as mortgage loan refinance transactions than in any other decade of American history. The result has been a higher debt ratio that is carried by the average American, and as the economy has changed (as another result of those lower interest rates), the income ratio has dropped. This has resulted in more people in greater debt situations than ever before, and the option of debt consolidation has risen as people desperately struggle to flail their way from the miry pit of debt.
Refinancing has offered the most efficient and viable way to create a recovery plan when facing mounting bills. The security of property has remained the most stable of all collateral. More than precious metals or the ever fluctuating dollar, home equity is the most acceptable and desired collateral when one applies for home refinancing or consolidating. The most expedient thing for a borrower to do before refinancing is to determine if a home equity loan would better serve their purposes. Debt consolidation is open to either option, but the amount that can be borrowed can be more with a home equity loan, whereas the mortgage loan refinance will provide lower rates and therefore lower repayments.
The primary objective of a Christian with overwhelming debt is to get into consolidating without jeopardizing the security of their collateral. Getting into a mortgage loan refinance with higher payments to get the debt consolidation paid off in a shorter period of time - 15 years or less - could put the loan repayment in jeopardy if there is a sudden change in circumstances and income is drastically reduced unexpectedly. The borrower should take time to investigate the various refinancing options, interest rate options, and other means of successfully consolidating. "For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it? Lest haply, after he hath laid the foundation, and is not able to finish it, all that behold it begin to mock him, Saying, this man began to build, and was not able to finish". (Luke 14:28-30)