Posts Tagged ‘costs’

What type of loan has the lowest closing costs?

by jon_a_ross

Question by : What type of loan has the lowest closing costs?
Conventional
CA
FHA
or
Cal-vet

Best answer:

Answer by GVD
A conventional loan has the lowest closing costs because there is no Funding Fee as in a VA loan and no Up Front Mortgage Insurance Premium as in an FHA loan. This is not to say that a conventional loan is always better. There are advantages to all and each person’s situation is different. Speak to your loan officer and have them prepare different options for you to look at; they should explain which would fit you best and why.

What do you think? Answer below!

How To Lower Your Closing Costs Down To Near Zero – video 3

This important video shows different ways to lower your closing costs to the least amount. Review the other two videos first to get the full impact of what flexibility you have using this financing. Although Half Percent Down Payment specific, most of these techniques apply to most other home loans. Available only in California.
Video Rating: 0 / 5

Buying or selling a house? Spend two minutes understanding all of the costs that show up on the paperwork at the settlement meeting. Video covers closing costs from financing, public records and title companies. Sponsored by Federal Title & Escrow Company www.federaltitle.com
Video Rating: 5 / 5

Closing Costs ? 4 Tips to Save Money the Next Time You Get a Mortgage

Did you ever wonder if the closing costs your mortgage broker proposes can be lowered?  Whether you have or not, this article will provide you with 4 ways easy to minimize your closing costs.

   1. Examine your Good Faith Estimate and make sure you understand what each fee is for. Seems straightforward but many people do not do it. Sometimes, they do it long after the fact. You must do it before. Preferably a few days before, not minutes before.

You should always get your closing costs estimates on the Good Faith Estimate form.  It’s a standardized way of showing you what fees you are going to be charged.  Since it’s standardized, you can easily compare one mortgage brokerage’s closing costs estimates with those of another.  

The closing costs are finalized on HUD-1, a form that you should have in your hands and inspect (compare it against the Good Faith Estimate form) several days before the closing.  

   2. Now that you understand what all the fees are for, make sure you don’t have there fees that you’ve already paid and are not given credit for that. Maybe you paid the appraisal fee upfront.  This fee is part of your closing costs and it should be on the Good Faith Estimate as having been already paid if you did, indeed, already paid it.

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   3. Mortgage brokers (lenders too) have a number of third parties they have to work with to make a mortgage loan happen.  Some, like title companies, they choose.  Others, like the city and county you chose when you chose your home.   Though there’s nothing you can do about the county or city fees, it doesn’t mean you have to pay the other fees.  For instance, if you have a title company that is reliable and willing to charge you less, work with that company.

   4. ‘Lender’s Inspection Fee,’ ‘Commitment Fee’ and other such fees. Some exist only so that the mortgage broker or lender makes more money. Others exist so they don’t waste time with tire kickers. Make sure all such fees are absent or waived if there’s a closing.

Until May 2011, mortgage brokers and lenders are still allowed to charge you a yield-spread premium.  That’s the extra fee they get from the bank (lender) if they get you into a mortgage with a higher interest rate than the ‘wholesale’ rate you qualify for.  Mortgage brokers (unlike banks) have to report this extra fee if they get it.  Make sure to look for it.
The only time you should be paying extra is if the mortgage broker is going to use the fee to lower your interest rate (buy down the rate) or to pay your closing costs with it.

Refinance closing costs are lower than the closing costs for a first mortgage. They still run into the thousands, you can still overpay by a few hundreds. Make sure you understand what you’re paying and that the HUD1 form and the Good Faith Estimate form are in agreement.

Cool Financing Closing Costs images

Check out these financing closing costs images:

Slovenia: The country of crony capitalism ! Slovenija: Država pajdaškega kapitalizma.


Image by Miran Rijavec
Idejni članek: Intervju z Egonom Zakrajškom (Egon Zakrajšek) iz ameriškega FED-a o usodi Slovenije in drugem.
The source article and idea was an interview with Mr. Egon Zakrajšek in Slovenian financial daily Finance. Egon Zakrajšek works for American FED so he is undoubtedly credible about told.
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www.finance.si: Interview …
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The link : Crony capitalism … (from the encyclopedia.thefreedictionary.com)

Crony capitalism

IMF officials Michel Camdessus and Stanley Fischer were quick to explain that the afflicted economies had only themselves to blame. Crony capitalism, lack of transparency, accounting procedures not up to international standards, and weak-kneed politicians too quick to spend and too afraid to tax were the problems according to IMF and US Treasury Department officials. The fact that the afflicted economies had been held up as paragons of virtue and IMF/World Bank success stories only a year before, the fact that neoliberalism’s only success story had been the Newly Industrialized Countries (NIC’s) who were now in the tank, and the fact that the IMF and Treasury department story just didn’t fit the facts since the afflicted economies were no more rife with crony capitalism, lack of transparency, and weak-willed politicians than dozens of other economies untouched by the Asian financial crisis, simply did not matter.[11]


For full article click the link above, at the beginning of this stolen article!

Thank you my beloved encyclopedia.thefreedictionary.com.

Japan’s Debt Time-Bomb Tools .. Japan Shows How to Defuse Debt Time-Bomb (May 27, 2011) ….


Image by marsmet462
The first Great Depression led to totalitarian dictatorships, war to consolidate power, and concentrations of capital in the hands of a financial elite. The trigger was a default on the global reserve currency, in that case the pound sterling. The U.S. dollar is now the global reserve currency. The concern is that default could create the same sort of global panic today. Dark visions are evoked of the president declaring a national emergency, FEMA plans locking into place, camps being readied for protesters, and the secret government taking over . . . .

…..item 1)…..The Huffington Post …www.huffingtonpost.com….HUFFPOST BUSINESS…Japan Shows How to Defuse Debt Time-Bomb

Posted: 05/27/11 05:00 PM ET

Ellen Brown
Civil litigation attorney; author of "Web of Debt"

www.huffingtonpost.com/ellen-brown/inviting-chaos-the-per…

[T]hreatening to default should not be a partisan issue. In view of all the hazards it entails, one wonders why any responsible person would even flirt with the idea.

– Alan S. Blinder, Princeton professor of economics, former vice chairman of the Federal Reserve

A game of Russian roulette is being played with the national debt ceiling. Fire the wrong chamber of the gun, and the result could be the second Great Depression.

The first Great Depression led to totalitarian dictatorships, war to consolidate power, and concentrations of capital in the hands of a financial elite. The trigger was a default on the global reserve currency, in that case the pound sterling. The U.S. dollar is now the global reserve currency. The concern is that default could create the same sort of global panic today. Dark visions are evoked of the president declaring a national emergency, FEMA plans locking into place, camps being readied for protesters, and the secret government taking over . . . .

This may all just be political theater, but do we really want to get close enough to the economic precipice to find out? The conservative ideologues toying with the debt ceiling are doing it to force cuts in the budget, a budget that was already approved by Congress. Congress is being held hostage by a radical minority pushing a risky agenda, one that is based on an economic model that is obsolete.

High-stakes Gambling
On May 16, the Wall Street Journal published an opinion piece titled "The Armaggedon Lobby," which claimed that a "technical default" on the federal debt was just "political melodrama" and not really a big deal:

[B]ond markets can figure out the difference between a genuine default when a country can’t pay its bills and a technical default of a few days if it serves the purpose of fixing America’s fiscal mess. Not so, said Saudi Prince Alwaleed bin Talal in a May 20 interview on CNBC. "That’s gambling. This is the United States. You’re leading the whole world. You cannot play games with that."
It is not just that the government could be brought to a standstill, with a third of its bills now being paid by borrowing or that interest rates would shoot up, forcing thousands of homeowners into foreclosure. Failure to pay on the national debt could trigger a default on the global reserve currency. As one commentator described what could go wrong:

[T]he consequences of a US default could spark yet another global financial crisis. The US could lose its triple-A rating, which could cause a sell-off in Treasury notes by institutional and foreign investors. This sell-off could lead to higher interest rates, and banks’ balance sheets might be decimated by the decline in their bond portfolios. Thus, global banking and financial market liquidity could dry up. Lending between institutions and people or businesses could possibly cease altogether or become cost prohibitive.

A Rerun of 1931?
The sort of chaos that could ensue was seen when Great Britain reneged on its deal to redeem pound sterling banknotes in gold in 1931. The result was the worst global depression in history.

When the pound went off the gold standard, markets panicked. People rushed to exchange their paper money for gold, in any currencies in which that was still possible. The gold wound up hidden under mattresses and in safety deposit boxes, unspent and the banks from which it was pulled, having no reserves to back their loans, quit lending or closed their doors. Credit froze; business ground to a halt.

As other countries ran short of gold, they too were forced to take their currencies off the gold standard. The last holdouts suffered the most, including the United States, which kept its gold window open until 1933.

The 19th century had been plagued by bank runs, caused by banks having too little gold to back their outstanding loans. The Federal Reserve was instituted in 1913 ostensibly to prevent those runs, but its levee did not hold back the run of the 1930s. In 1933, the country suffered a massive banking collapse, forcing President Roosevelt to declare a banking holiday and take the U.S. dollar, too, off the gold standard.

Freed from the Bankers’ "Cross of Gold"

The transition off the gold standard was a painful one but according to Beardsley Ruml, Chairman of the Federal Reserve Bank of New York, the country was the better for it. In a paper read before the American Bar Association in 1946, he said that going off the gold standard had finally allowed the country to be economically sovereign:

Final freedom from the domestic money market exists for every sovereign national state where there exists an institution which functions in the manner of a modern central bank, and whose currency is not convertible into gold or into some other commodity.

Freed from the strictures of gold, Roosevelt was able to jump-start the economy with deficit spending. As Marshall Auerback details, the next four years constituted the biggest cyclical boom in U.S. economic history. Real GDP grew at a 12% rate and nominal GDP grew at a 14% rate.

Then in 1937, Roosevelt listened to the deficit hawks of his day and slashed the deficit. The result was a surge in unemployment, and the economy slipped back into depression.

What lifted the country out of the doldrums was again deficit spending, liberally engaged in to fund World War II. In wartime, few people worry about the national debt. The debt grew to 120% of GDP — twice what it is today — and wound up sustaining another very productive period in U.S. history, one that set the country up to lead the world in manufacturing for the next half century.

On Inflation and Taxes
Ruml said federal taxes were no longer needed to fund the budget, which could be financed by issuing bonds. The principal purpose of taxes, he said, was "the maintenance of a dollar which has stable purchasing power over the years. Sometimes this purpose is stated as ‘the avoidance of inflation.’"

The government could spend as needed to meet its budget, drawing on credit issued by its own central bank. It could do this until price inflation indicated a weakened purchasing power of the currency. Then, and only then, would the money supply need to be contracted with taxes.

"The dollars the government spends become purchasing power in the hands of the people who have received them," Ruml said. "The dollars the government takes by taxes cannot be spent by the people," so the money supply can be contracted with taxes as needed.

When the economy is in a recession, however — as it is now — the government needs to spend in order to get purchasing power into the hands of the people. Businesses cannot hire more workers until they have more customers demanding their products, and the customers won’t come until they have money to spend. The money ("demand") must come first. Adding money will not drive up prices until the economy is at full employment. Before that, increasing "demand" will drive up "supply" by setting the engines of production in motion. When supply and demand rise together, prices remain stable.

We now know that a government can go quite far into debt without a dangerous level of price inflation occurring — much farther than the U.S. has gone today. Besides World War II, when U.S. debt was 120% of GDP, there is the remarkable example of Japan. Japan has retained its status as the world’s third largest economy, although it has a debt to GDP ratio of 226% — and it is still fighting deflation.

Critics of the deflationary theory point to commodity prices, which are soaring today. But if those prices were due to the economy being awash with "too much money chasing too few goods," real estate prices would be soaring too. Instead, the real estate market has collapsed. What has actually happened is that the housing bubble has transmuted into the commodity bubble, as "hot money" has fled from one to the other. The overall money supply is still in decline.

The deficit hawks have been predicting for years that the federal debt would sink the dollar and the economy, and it hasn’t happened yet. In fact the federal debt has not been paid off since 1835, and no disaster has resulted. The debt has not only been carried on the government’s books but has continued to grow, and the economy has grown and flourished along with it.

This is not an economic anomaly. The economy has flourished because of the national debt. Nothing backs the currency today but "the full faith and credit of the United States." Money is no longer a metal; it is an inflow and outflow, credits and debits. The liabilities of the government are the assets of the private economy. The national debt is what backs the money supply.

Dealing with the Rising Cost of Debt Service

There is a potential time bomb in a growing federal debt, but it is one that can be defused. The debt has risen from trillion to trillion just since the banking crisis of 2008, not from "entitlements" but due to the Wall Street collapse and bailout. Just the interest on this growing debt could cripple the tax base if interest rates were at normal levels, so they have had to be pushed almost to zero. The result has been to create a dollar carry trade. This has facilitated speculation in commodities, a major cause of today’s commodity bubbles.

There is, however, a solution to this problem, and it was discovered by Japan. The government can spend, not by issuing bonds at interest to the public, but simply by creating an overdraft at the central bank, as Beardsley Ruml recommended. The Bank of Japan now holds an amount of public debt equal to the country’s GDP! As noted by the Center for Economic and Policy Research:

Interest on [Japanese] debt held by the central bank is refunded back to the treasury, leaving no net cost to the government on this debt. . . . Japan continues to experience deflation, in spite of the fact that its central bank holds an amount of debt that is roughly equal to its GDP. This would be equivalent to the Fed holding trillion in debt.
Like the Bank of Japan, the Federal Reserve now returns the interest it receives to the government. With a rising interest tab on the federal debt no longer a problem, private interest rates could be allowed to rise to normal levels.

Today the Fed is not permitted to buy bonds directly from the Treasury but must go through middleman bond dealers. But that problem too could be fixed. In a supporting statement in 1947, Federal Reserve Chairman Marriner Eccles discussed a bill to eliminate the unnecessary cost of these middlemen. He said the Federal Reserve had been allowed to purchase securities directly from the government from its inception in 1914 until the Banking Act of 1935. Then:
A provision was inserted in that act requiring all purchases of government securities by Federal Reserve banks to be made in the open market, which means purchased chiefly from dealers in Government bonds. Those who inserted this proviso were motivated by the mistaken theory that it would help to prevent deficit financing. . . .

Nothing constructive would be accomplished by the proviso that the Reserve System must purchase Government securities exclusively in the open market. About all such a ban means is that in making such purchases a commission has to be paid to Government bond dealers.

The interest cost and the bond dealers’ cut could both be eliminated by allowing the Treasury to borrow directly from its own central bank, interest free.

Nothing to Fear But Fear Itself

We have been frightened into believing that government debt is a bad thing, but nearly all money today originates as debt. As Marriner Eccles observed in the 1930s, "That is what our money system is. If there were no debts in our money system, there wouldn’t be any money."

The public debt is the people’s money, and today the people are coming up short. Shrinking the public debt means shrinking more than just the services the government is expected to provide. It means shrinking the money supply itself, along with the ability to provide the jobs, wages and purchasing power necessary for a thriving economy.

Originally posted on Asia Times.
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Costs of Refinancing Options Close – Refinance Closing Cost

The low rates of mortgage loans today are tempted many homeowners to explore the possibility of refinancing. However, some lenders stopped short, to make the study of costs of cancellation, if you have no money for closing costs.

Yet, instead of giving to the refinancing, consumers should discuss your options with several lenders.

There are three ways to meet the costs of closing the mortgage loans:

1 .- To pay the closing costs in cash.
2 .- Include closing costs in the new loan.
3 .- Work with the lender at a special price.

How to deal with balancing the costs on loan
Some financial institutions believe that the personal loans, mortgage loans and conventional loans usually allow all closing costs to be financed in the loan amount, provided the new loan amount does not exceed the net value of the home.

Lenders generally want consumers to borrow 80% or less the current value of the house, including adding the closing costs on the scale. Some loan programs allow consumers to borrow 95 percent or 97 per cent of the value of the house.

The most important step in the process – no cost refi – is to find out how much value in the property. If the value is there and borrowers have sufficient capital, then you can simply roll the closing costs into the new mortgage.

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Borrowers are willing to add a few thousand extra dollars to the loan balance in exchange for a lower interest rate and, by extension, lower monthly payments.

Adding closing costs to the loan balance does not significantly increase the monthly payments, because payments for these costs are distributed in 15 or 30 years depending on the type of loan.

Premium prices. Pricing premium is another possible option for borrowers who lack cash for closing costs. With a special price, lenders pay for closing costs by charging a slightly higher rate mortgage. This is sometimes referred to as “no cost refi” loans.

In a true “no cost refi” loan, the borrower will pay a slightly higher interest rate as 5.25% instead of 5.125%. The lender will take the additional premium obtained by the higher rate and credit back to the borrower at closing to cover closing costs.

However, borrowers should be careful because some lenders use the term “no cost refinancing” in a misleading way.

Many lenders advertise “no cost refinance, but what we’re talking about is to wrap the closing costs into the loan, is fairly typical for adjustment costs on the loan, provided that the capital is there, but this form of act is not a refinance “no cost refinancing.”

http://treelending7.com/no-closing-cost-refinance-basics-no-cost-refi.html

More Mortgage Refinance Closing Costs Articles

Can someone give me a general idea of how much home closing costs are?

by seier+seier

Question by DaniJohnson: Can someone give me a general idea of how much home closing costs are?
I know closing costs vary, but can you give me a general idea of how much it is? Like, is it in the hundreds or thousands?

I’m still in high school, but i’m trying to gather some information about buying a home.

Best answer:

Answer by Othniel
A good faith estimate is given by the lender but for your purposes a phone call to a title agency that does real estate closings in your area will give you all the information you need.

Give your answer to this question below!

Why Home Closing Costs are Necessary?

by wallyg

Home sweet home, is it just a dream? You might feel this way when you are in the final stages of closing and discover the home closing costs. This is an area where many go into sticker shock. So let’s take a look at those costs in purchasing a new home.

Don’t worry I will clear up your doubts. Everyone’s basic need is to have a nice home to live in. While we are waiting for the transactions to be completed, there are miscellaneous expenses that occur in finalizing your purchase known as home closing costs. These include things such as:

deed recording fees
surveys
property taxes
loan origination fees
discount
appraisal
title fees

As you can see from the list, these are necessary items to complete the transaction of buying your new home. Home closing costs are also called settlement costs. When you have a transaction that includes a lender, a borrower, and real estate, then you will have a real estate settlement document to itemize these costs. Many of these cannot be avoided. Although there are some that are negotiable. An example of one is the loan origination fee.

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These costs are paid to the lender for the fees that have accumulated to complete the transaction. The mortgage makes it possible for you to make such a large purchase as a home. Thus the lender can establish the principles for you to obtain this large debt from the bank which provides the loan. Any kind of assets can be categorized to assure your ability to pay back this debt. So there are fees involved to qualify you as a good risk. These are part of the mortgage closing costs.

On an average 3% -5% of the purchase price is what you can estimate the home closing costs for buying a home will be. Never oblige yourself for the payment of a mortgage that goes beyond your earnings. I had one young girl ask me about a mortgage she qualified for that was for 0,000. She loved the home but only had a total earnings between her and her fianc? of ,000 per year. They did not have the earnings to afford this mortgage. They would have found it too much to handle and would soon find themselves loosing the home. So don’t commit yourself to a mortgage that you cannot afford. Read the documents carefully before signing.

Within three days of their loan application, a lender should provide you, the buyer, a good faith estimate document, which is the hypothetical rule of the amounts that are to be estimated. But the original regular prices may go beyond this estimation at the final closing. Bring the good faith estimate document with you so you can compare. Also, ask for an updated good faith estimate document just prior to closing.

Normally, the time factor for clearing out these settlements is prior to the closing. Home closing costs are a necessary part of buying a home. Hopefully all your doubts have been cleared and you can proceed with the closing. Enjoy that beautiful home you are about to buy!

Why are there Buyers Closing Costs

by eyewash

Many home buyers want to know why there are buyers closing costs! Isn’t buying the house enough money to put out? Why do you now have to come up with closing costs?

These are very good questions and when you understand what is involved it will make since why there are these buyers closing costs.

First of all, when you buy a home, you are usually applying for a mortgage. That is unless you have cash to pay for the home. Since most people do not have the quantity of cash necessary to buy the home they have to borrow it. So most of the closing costs that the buyer has to pay are mortgage closing costs.

Basic Mortgage Closing Costs

Loan origination (these are usually 1% of the mortgage)
Discount points (this is the amount you pay to buy down your interest rate)
Title search (you want to make sure you have a free and clear title to the property you want to buy, otherwise there may be a question of your ownership at some time in the future)
Title insurance
Appraisal
Credit report
Recording fees (this fee is usually required by your local government)
Prepaid interest on your mortgage (interest starts at closing, but your payment may not be due for a month, so the interest that will accrue from closing until your first payment is collected)
Private mortgage insurance premium
Property taxes (depending on when close, the seller may have already paid the property taxes, thus you have to pay the portion from the date of closing to when the next tax is due to the seller)

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When you look at this typical list, you can see that these would be costs that you the buyer would have to pay. These are just costs that normally come because of the mortgage. Remember this is just a basic list. There could be other fees besides the ones listed here.

Of course there is a down payment you will have to have also. Buyers closing costs are fees you pay in addition to the down payment. So do not be surprised when you find out you have home loan closing costs to pay. But do not let those costs scare you. This part of buying a home.

If you are not prepared to pay these costs, some can be negotiated. But others are fixed so you cannot change them. Some loan programs will allow the seller to help with some of the buyers closing costs. So make sure you find out if your loan program allows for this. Then you have to get the seller to agree!

Another thing you can do is negotiate a lower origination fee. Although sometimes the lender will ask for a higher interest rate to accomplish this. So take a close look to see if it is worth it if the lender counters with a higher interest rate.

Also pay attention to those miscellaneous fees on the good faith estimate. Sometimes unnecessary closing costs are hidden there. These fees should be explained to you. Watch for fees that sound similar.

All in all, most of these buyers closing costs are necessary to close on your mortgage. So do your homework and soon you will be decorating your own home.

Find More Home Loan Closing Costs Articles

Home Closing Costs Explained

by teamperks

It is very important for a first time home buyer to choose a right loan when buying their first home, which might have been a long term cherished objective for the person.

Recently I met one of my neighbors in a restaurant and decided to join him, as both us were sitting alone. After the customary family related questions and answers, our topic of discussion turned towards home loans and the home closing costs associated with it. My neighbor had recently purchased a home for his son in a place near Atlanta. He was telling me how he chose his lender and I found it quite interesting. I wanted to share some of his key points, which will be very helpful in choosing the right institution.

Apart from the interest rates, which is going to be a recurring expense on a monthly basis, there is another important one time cost to consider. This is the most important cost required to evaluate institution in the one time cost category, the home closing cost. Every institution has some standard closing cost items which will vary from lender to lender. One example of a standard closing cost is the document recording fees, where the borrowers will pay the local government.

Apart from those standard costs, there are other costs collected. As a borrower you can negotiate with the mortgage lenders regarding these costs. These varying home closing costs incurred by the borrower can include the following:

appraisal fee
origination fee
credit reporting fee
processing fee
underwriting fee

You can expect these home closing costs to range from between 3%-5% of the loan amount.

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Origination Fee

Now, coming back to the varying closing costs, the first fee in that list is the origination fee which is nothing but the fees for getting the initial quote details using the borrower’s data. Sometimes this fee might be used by the lender for some other purposes. This is usually between .5% – 1.75% of the loan amount.

Appraisal Fee

Next in this list is the appraisal fee. This is the fee paid to an external appraiser, usually appointed by the institution. The appraiser will inspect your home and provide the current market value for your house to the lender. This is required to safeguard the lending institution from any unscrupulous borrowers or in case of any interest payment defaults. Most of the lenders charge around 0 for the appraisal fee.

Underwriting and Processing Fees

The underwriting and processing fees are collected for providing services. The underwriting service is used to gauge the credit worthiness of the borrower by looking at the borrower’s credit level, assets, and debt to income ratio.

All the above mentioned fees vary in price and in some cases the borrower can do some bargaining on these fees. By law the loan officer has to provide an estimate of all these fees upfront. This estimate is known as the Good Faith Estimate.

Every institution should provide a list of home closing costs as a Good Faith Estimate right upfront. Some lenders might take some time to provide these estimates as they are trying to buy some time to arrive at the rates favorable to them. It’s always advisable for the borrower to request this estimate as early as possible. Borrowers can then compare this estimate with estimates provided by other lenders. This will give the option of bargaining for a good rate with the mortgage lender. But remember, this is only an estimate. Some mortgage closing costs will change before closing, so watch this.

Refinance With No Closing Costs – When to consider it?

You see an advertisement and it says “ refinance with no closing costs“. Although you may think that this is a good deal, it usually isn’t most of the time. You may think it is good, but make sure you are evenly weighting out your options. It almost never means “FREE!” Read the rest of the article and find out if you should stick with closing costs or are better without them.

Remember, closing cost loan mean higher rate. You usually still end up paying the fees just in a different form. Your interest rate will be higher to cover the closing cost you are not paying for. Instead of paying a whole payment, every month you will pay more money. This may work better for people not having to pay a whole chunk at a time, but over the long term, it may be that you over pay!

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The brokers that are also handling the loan also get paid. The lenders worry about this payment because they pay them with the extra interest money they are making. Nobody in this business woks for free.

At times they may be a good ideas and at certain times they just might want to be straight out avoided. They are not always bad, they also have their plus points. These will limit writing big checks, something many people struggle with.

Here are two instances when you should consider refinancing with no closing costs:

1. The rates are currently high but son they may go down

2. You are only planning on keeping the loan for a few years.

So if this is not a long term fix, you may way to choose the no closing cost option. This is better because you will only pay the high interest for a short amount of time and not even have to pay the extra closing costs.

No closing costs loans are more expensive over the long term because you pay a lot for the high interest rate. You will benefit over the long term if you choose a closing sot loan.

On the other hand, here is when to consider a closing cost loan:

This should be avoided and sometimes not. It does hurt to pay the loans up front but it may save you over the long term as you analyze the big picture.

Here are 3 instances you should think about closing costs:

1. If the rates are currently low and you think they will soon ride

2. You are planning on keeping the loan for many years

3. The cheapest rate isn’t affordable by you

But before you come up with a decision, Make sure you compare several types of loans. Make sure you weigh your options as logically as possible to avoid making a bad choice.