Question:

What is important about a no cost mortgage refinance?

Answer:

A no cost mortgage refinance should be a true no cost. Anything but per diem interest, escrow, and homeowners policy should be paid by the lender to be considered a true no cost home loan refinance.

The Break-Even of a No Cost Mortgage Purchase or Refinance

Use a mortgage calculator that takes as many items into account as possible. Your tax bracket and the way you pay closing costs (cash or roll them into the loan) should also be considered to provide a realistic break-even period. The break-even period for a no cost mortgage refinance will even be larger than the break-even period for a purchase transaction.

Have in mind that a zero cost mortgage is not a no cost mortgage - purchase or refinance. A zero cost or no-point mortgage transaction simply doesn't ask for paying points, but all loan-related charges - appraisal, title insurance, processing fee, closing attorney's fee - are paid by the borrower.

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