No Closing Cost Mortgage

I have to hand it to the Big 800 Pound Gorilla (aka BOFA) for making it seem as if they reinvented the wheel with their No Close Cost Mortgage Refinances. The Gorilla has a mighty big Public Relations and marketing budget, because they had every newspaper in town acting like they had come out with something new. Truth is, No Close Cost Mortgage refinances have been done by saavy Lenders for years.

It is possible to get better advice, service, and price from the right Mortgage Broker or Banker than you will from the Gorilla – and still not pay for a No Close Cost Mortgage.

A majority of the public is under the impression that you can get a better deal by going straight to a Bank, than by dealing with a Mortgage Broker or Banker. The reality is that it completely depends on the person you are dealing with. If you have the right Mortgage Broker you can get an excellent deal….even a better deal from the same bank! How could you possibly get a better deal even though you are dealing with a “Middle Man”?? Let me explain….

Until recently the Gorilla, like most every other bank, or mortgage company had two divisions that you can get a mortgage from. One division is their Retail side, which is who you work with when you contact the Bank Directly. The other side is their Wholesale division, which can do as much as 3 times the amount of business as the Retail division, with tremendously less overhead. Think about it – the Retail division has to pay for lots of prime commercial office space, national advertising campaigns, public relations – huge money to keep in the public eye – a huge expense per loan. The Wholesale division, on the other hand only has to let a very small target market know about their services – Mortgage Brokers and Bankers. They can have one office that covers several states or the whole country, so their cost to make loans wholesale vs. retail is substantially less! This is how you can go to a broker and get a better deal than going straight to the Gorilla – but you betta make sure you got the RIGHT broker. You know as well as I do, the wrong person (even at the right bank!) can lead you down that frustrating road to pulling your hair out and not getting what you signed up for!

Back for a moment to the issue of No Close Cost Mortgage. How is this possible? Most of the time people pay closing costs when they get a mortgage right? Most of the time they do indeed, there are costs that must be paid in order to have a new mortgage close. Appraisals, State Taxes, Title Insurance, etc. Many borrowers do not realize they have a choice in this matter, Most lenders (whether their representatives are aware of it or not) can deliver a No Close Cost Mortgageto a quality borrower. When lenders and banks deliver a long term loan to a borrower and the rate is fixed, the lender earns money depending on what rate is delivered to the borrower at closing.

Lenders and banks typically have the option to raise the interest rate charged in order to receive higher compensation from the end investor in the loan – this money can be used to pay the closing costs on the borrowers behalf in order to look like a No Close Cost Mortgage. In Florida, on a typical loan, you could probably accept about .5% higher in your interest rate for the option of having the lender pay all of your closing costs (even less in other states) (No Close Cost Mortgage). This is an excellent strategy for people who do not plan on staying in a property for a long period of time. The other time that it can be good to take advantage of this is when interest rates are declining. If rates decline and you have not paid closing costs, then there is no reason not to refinance again for no costs (assuming you have no pre-payment penalty). People have done this multiple times over a period of months or years under the right circumstances. Amazingly, not all lenders or mortgage professionals are aware of how to do this and give you a No Close Cost Mortgage. No Close Cost Mortgage

We all agree, purchasing a home will be, for most of us, the largest purchase you will make in our life. You have found your future home, arranged for financing and are now waiting for the closing date. But to many people’s surprise, a no close cost mortgage, there are other monies that will need to be disbursed before or on the closing date.

Some of the upfront costs you should plan on paying when purchasing a home include appraisals, inspections, earnest money, lenders fees, title company fees, and attorney fees. It is vital that you plan for these fees’ speak to your real estate professional or your lender who will be able to outline and estimate all of these costs for you, especially if they mention a no cost mortgage. The total cost of these various expenses and fees can run into the thousands and even the tens of thousands of dollars. It pays to be prepared.You must also be careful of the 100% mortgages or no-money down loans. A no-money down loan does not mean that there are not any costs associated with the loan (no close cost mortgage). In reality, these types of loans allow the buyer to borrow 100% of the purchase price of the home however the buyer is still responsible for the numerous other costs mentioned above.

You should also keep in mind that you will have to pay a portion if not all of that year’s property taxes. Typically, property taxes are called on and required to be paid in full as the home closes. A buyer, upon closing the home, will be called to pay his/her share of the annual bill as it is pro-rated. You may want to enquire about the property taxes of a specific house, or neighborhood, before signing the purchasing contract. Some neighborhoods are taxed more heavily than others.

No Close Cost Mortgage or Other Fees With Purchasing a Home? There is however a way of avoid having to pay for a no close cost mortgage. As a borrower, you do have the right to ask a seller concession to cover your closing costs and pre-paid items. This makes it so you do not have to come up with any money at all for closing costs, a no cost mortgage.

A seller concession is worked into the purchase agreement and the seller will end up paying for some or all of the closing costs (No Close Cost Mortgage). The seller concession is either a flat fee or a percentage of the loan amount. This is a fairly common practice, particularly in depressed real estate markets to take advantage of a no close cost mortgage.

As for pre-paid items, they generally consist of pre-paid interest and escrows. Many people run into difficulty reading and understanding the multiple costs that are involved with purchasing a home. Because of this, do not take any chances and talk to a loan consultant or mortgage broker. This will help clarify your financial obligations and avoid negative No Close Cost Mortgage.

Purchasing a home is an exciting adventure. Don’t let your fear of the unknown spoil this joyous event. Being prepared and well informed will avoid you being shell-shocked when the time comes to paying the bills. The more informed you are, the better prepared you will be for the many upfront costs associated with buying a home with no close cost mortgage. No Close Cost Mortgage