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Refinance Without Closing Costs

You can have your home loan refinanced without bringing extra fund to the table to cover the closing cost. Rather than pay upfront in a lump sum, you can pay closing expenses over the time. This no-Closing Cost Refinance can be done in following options:

Option 1. Rolling the Closing Fees into Your Loan

In this option your refinance closing costs will be added to the total loan amount you borrowed from your lender and factored into your loan monthly payment. This won’t affect your interest rate, and you’ll pay just a little bit more mortgage interest over the life of your loan since this increases the overall loan amount borrowed. As an example, instead of you pay the closing costs out of your own pocket, the lender will just add all of the closing costs including title and escrow fees into your total mortgage balance for a bigger loan amount.

Option 2. Taking a Slightly Higher Interest Rate

By slightly raising your mortgage interest rate, the lender can give you credit in closing to cover the amount you owe in closing costs, and will recoup the closing cost through the increased rate. This way you will avoid paying the closing costs as a lump sum upfront.  This option is usually good for those who are planning to sell homes within 5 years, or do some home renovations or think of refinance again soon. As an example, the lender will charge you a higher interest rate if you waive the closing costs, you might get a 3% percent interest rate if you pay closing costs, but a 3.25% interest rate if you don’t.