Options to Get Mortgage Refinance with No Closing Costs

There are fees associated with refinancing a mortgage that simply can't be avoided, but it is possible to refinance your mortgage with no upfront closing costs. Closing costs are not just from the lender, they include title costs, insurance and taxes. The lender can offer you a no cost refinance, but the fees still have to be paid, and they are paid by you, the consumer.

Higher Interest Rate

The lender may offer you a no closing cost refinance, but in return give you a higher interest rate. They don't tell you you could have a lower interest rate if you pay the cash at closing. Over the life of the loan, you have paid back the closing costs incurred, and them some. However, this is a good option for a buyer who is not staying in the home more than a year or two. In a short amount of time, the higher interest paid will not exceed the price of the closing.

Added to the Principal

In exchange for no cash upfront, the lender will add the closing costs to the loan amount. The costs are tacked on to the end of the loan, adding thousands that have to be repaid. Instead of paying cash upfront, now you will pay these costs over the life of the loan, with interest.

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