Is a no-closing-cost mortgage for you?
The cost of a mortgage starts adding up long before you begin paying interest -- there are fees associated with just getting the loan. Those closing costs usually total thousands of dollars.
Besides writing a check to pay those fees at the closing table, there's another way to pay them when you refinance your mortgage: by adding them to the loan amount. The result is called a no-closing-cost refinance. Many lenders offer them.
However, you'll probably have to accept a higher interest rate over the life of the loan.
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"There's two ways people achieve no-closing-cost mortgages," says Bob Walters, chief economist at mortgage lender Quicken Loans, based in Detroit. "The mortgage company will flat-out waive them, which doesn't happen that often. Or, they will present the rate (with) closing costs and if you don't want to pay, you'll take a slightly higher rate."
For example, you may be offered a mortgage at a rate of 3.75 percent and pay closing costs. Or, you can take a no-closing-costs mortgage at a higher 4.125 percent rate.