A mortgage refinance is simply the taking out of a new mortgage loan with more favorable loan terms than your existing one. The result is usually a better overall loan situation for the borrower.
If you are considering refinancing your mortgage loan, this may be the best decision you will make this year in terms of finding ways to reduce your monthly expenses. That is because, in most cases, taking out a mortgage loan results in lower monthly house payments for the borrower.
Of course, certain conditions should be in place for you to consider refinancing your mortgage loan, such as the ability to qualify for a lower interest rate than you have on your existing home loan.
You may already be aware of the costs of closing a mortgage refinance loan. These consist of various fees associating with putting the refinance package together, including for example: the home appraisal fee, credit report, lenders 'fees, brokers' fees, title insurance, recording fees, and escrow fees.
Some borrowers would prefer not to have to come up with any closing costs when they sign their loan. If you are interested in a no-closing-cost home refinance loan, here are 2 ways to avoid paying closing costs:
1. Have the closing costs rolled up into the loan principal:
One way to avoid having to come up with closing cost money is to ask your lender to increase the size of your loan by that amount. That way, you will not have to come up with payment for any costs at loan closing. Instead, you will just have to make slightly higher monthly payments on your loan until it is paid off.
2. Eliminate closing costs altogether by having your lender increase your interest rate a bit:
Alternatively, some lenders will agree to completely eliminate your closing costs in exchange for charging you a slightly higher (maybe 0.5%) interest rate on your loan.
If you want to avoid paying closing costs for your home loan refinance, consider these 2 ways to do so.