Christian No Closing Cost Mortgage Refinancing
In theory, no Christian closing cost mortgage refinancing enables a borrower to keep expenses to a minimum. Banks, credit unions, lenders, and other financial entities charge various terms and fees. Some of the standards relate directly to state requirements or other geographical terms. Since many of these financial entities want a customers business, the entities will make deals. Again, the deals will vary depending on what the entity is able to do. A deal will also depend on what a customers credit check reveals.
Some financial establishments offer no closing cost mortgage refinancing to customers as a car dealership offers money back deals on a purchase. A car dealership that requires a consumer to pay closing rates may offer money back as an incentive to buy a vehicle. Often times, the fees associated with closing costs are added to the monthly payment of the vehicle. Since a customer focuses on the instant cash back, he or she may not think about how much they end up paying in closing costs if they pay the monthly payments alone. The same principle occurs with no closing cost mortgage refinancing. A fiduciary business offers the borrower a contract with no closing finances, but charges the borrower a slightly higher interest rate. The other option given to a mortgagor offers him or her a rebate, which in turn pays for final expenses. Either way, a trade off occurs to the benefit of the lender and sometimes detriment of the mortgagor.
Different costs occur at the finale of the process. Non-recurring rates include title charges, title insurance, document preparation, home inspection, credit check charges, appraisals, etc. Recurring amounts are charges paid each month, on a consistent basis and include property tax, flood insurance, private mortgage insurance, and fire insurance. While fiduciary businesses can claim to have no closing cost mortgage refinancing, the consumer must still pay for any recurring fees associated with the property. Renegotiating the non-recurring fees is possible with the potential for complete dismissal. Recurring charges cannot be dismissed, regardless. What recurring fees are paid depends on geographical location and a persons situation. For example, if a person lives in the desert, he or she would not pay flood insurance.
Some people prefer to pay a lower interest while others prefer and need to make lower monthly payments. The higher interest rate lowers the monthly expense but requires a longer payment schedule. No closing cost mortgage refinancing applies to purchasing transactions and refinancing. In most refinancing situations, extra costs lower and the opportunity for no new expenses does occur. A borrower needs to be aware of the no cost financing option. The no-closing cost option means the loan does not obtain points, which means that a tax deduction is not possible. A person should carefully consider this possibility. (Points are purchased at closing based on a percent of the final mortgage amount. The points enable the reduction of the interest rate by percentage and aids in a tax deduction.)
What many customers do not realize is most fiduciary organizations, including banks and loan companies, slide various percentage markups into the monthly no closing cost mortgage refinancing. The markups cover an enormous commission to the lender under the disguise of some required fee. Therefore, the longer a person keeps the loan and makes the same monthly payments, the more he or she pays in the end. This added hike could add thousands onto the payment. Other no closing cost mortgage refinancing traps exist, as well. A buyer needs to be aware of what the market holds. By paying the closing costs, a buyer will pay much less than if they fall for the no final fees trap.
Avoiding these traps is tricky. To avoid the traps an individual should take proactive measures. An individual should hire a consultant, a loan specialist, or an attorney. Hiring one of these or other professionals could save a large amount of time, headache, and money. Being prepared and knowing the potential pitfalls enables a person to understand his or her financial situation. Thou preparest a table before me in the presence of mine enemies: thou anointest my head with oil; my cup runneth over (Psalms 23:5).
A borrower should proceed with self-help methods to gain an understanding of the fees involved in a loan process and its finality. Learning more about interest rates, terms, potential funding, and the pitfalls creates a prepared buyer. Knowing about no closing cost mortgage refinancing and the hidden fiduciary amounts, a person can feel more comfortable in speaking to a lender. A home purchaser should have the lender explain the process in detail, especially the rate structure. Once a buyer has signed the application, he or she has three days to offer the lender a good faith estimate. Again, the purchaser should look carefully at the agreement before signing the final documents. Financiers may change the rates or payment plan at anytime without letting the purchaser know. Sometimes the financier may sneak in charges that can add up to three to four thousand dollars depending on variables of a two hundred thousand dollar loan. In speaking to a seller, some sellers offer to pay the final amounts so that they can sell and end the process much quicker. However, some financiers may object to the seller paying these final amounts. Depending on the lender, their standards, and the standards of the state requirement, the seller may or may have the opportunity to pay the final amounts for the buyer. A borrower should know that he or she has options.
Christian No Closing Cost RefinancingWith a fluctuating market, no closing cost refinancing seems like a great way to eliminate the ever-changing fees associated with securing a new home mortgage. Obtaining a loan is not cheap, especially a home loan. Refinancing is no different. The same charges apply. There are processing fees, insurance, as well as lenders, brokers, and other third parties to pay. Someone has to pay these costs. They don't just go away. Someone has to pay for them - usually that someone is the borrower. Unfortunately, marketing can be misleading and even deceptive. The costs are still there, just paid for in different ways. In traditional mortgages, the closing costs are paid for up front, usually by check. But in no closing cost refinancing, the money is incorporated into the principal balance or covered by a slightly inflated interest rate.
No cost loans have been available since the early 1990s and gained popularity when interest rates fell and property values soared. Today, most national banks and mortgage companies offer a no closing cost refinancing option. Usually only available for loans over $250,000, these financial institutions rarely waive their fees, but some lenders will repackage them, so that there is little cost at signing. These costs usually fall into three categories. Points, or prepaid interest includes fees paid to the lender or broker. Non-recurring closing costs cover the one-time expenses associated with setting up and processing the contract. Appraisals, credit report, title transfers, notary and recording fees, document preparation, underwriting, and administration are all considered non-recurring costs. Recurring costs include items like taxes, mortgage interest, and insurance. When a borrower does not have the money to cover all the fees involved, no closing cost refinancing could be the viable option. These costs can be included in the principal or paid by interest. Interest rates usually run an extra quarter percentage each month. They can save a lot of money, but when rates begin to rise again or an owner remains in the home longer than three to five years, this loan option often ends up pulling more money out of a borrower's wallet. The best option depends on the homeowner's goals and amount of cash available for closing costs.
But what many borrowers don't know that no closing cost refinancing does not include all the charges needed to be paid at closing. Fees associated with third parties such as per diem, interest from the day of closing to the first day of the following month when the first installment is due, or interest on the previous mortgage from the first of the month to the closing day are not included. Recurring costs are also not considered part of the package agreement. Depending on the lender, other fees could include courier charges, flood certification or a range of other items. Always make sure that fees are understood and in writing prior to the agreement. True no cost loans only exist when the lender collect no fees and pays all other settlement costs on behalf of the borrower. This is very rare, although no cash loans, zero points loans and zero fees loans are available under other circumstances. Everything has a price - even salvation. Jesus paid the ultimate price for us. "For ye are bought with a price: therefore glorify God in your body, and in your spirit, which are God's." (1 Corinthians 6:20)
Then who pays the cost? Usually, the burden falls on the borrower, either through an increase in principal or interest rate. But this is not always the case. In certain situations, the lender or broker may pay the fees associated with no closing cost refinancing. This happens when they receive a yield spread premium, also known as a gain-on-sale incentive or par-plus pricing. Sellers will pay lenders these rebates for bringing in new transactions at interest rates above the current market rate. Lenders then use the extra money to pay charges associated with the contract. Sometimes the seller will agree to pay these fees directly on behalf of the buyer. Some lenders who are associated with an appraiser or title company will waive their own fees to bring costs down. Most of these charges are non-recurring costs only.
No closing cost refinancing can be beneficial for certain Christian borrowers. The first step is to determine the break-even period for the loan. This is the point in the loan term where the finances saved at the beginning catch up with the extra cost being integrated into the loan. Usually that period is within three to five years. If a homeowner only plans to stay in a house for short period of time, he or she actually saves money by staying under this break-even period. However, long-term homeowners who extend that period, pay more money than if they paid the closing cost upfront. Borrowers using this option can usually get a higher amount of money out of refinancing and avoid paying further private mortgage insurance (PMI) that can be very expensive. In a court hearing, the Department of Housing and Urban Development (HUD) won a case that ruled that fees charged in a real estate transaction must be tied to actual services rendered. Last minute charges to boost an agent's income are unacceptable.
Surprisingly enough, all upfront fees for no closing cost refinancing are negotiable. When shopping, request a written estimate of all fees before committing to one agent. Compare agents. Get referrals and check with the Better Business Bureaus to review complaints. When possible, use a lender who is trusted and reputable. Every lender is unique and has different fees and regulations. Borrows needs to weigh all the options and do their homework thoroughly to get the best possible deal for their personal situation.