The "NO-COST REFI INDICATOR" is the where your lender credit will approximately pay all of your closing costs. Here are the details:
– Closing costs are defined as all lender fees and title fees (Appraisal, Underwriting, Title Insurance, Recording, etc.). Closing costs do not include tax and insurance escrows or prepaid interest.
– Rate indicated on the home page is for a 15 year fixed refinanace loan of $300,000. It assumes at least 25% equity (home value of $400,000). Rate also assumes good credit.
– 30 and 20 years fixed rate programs are also available. The 30 year fixed rate is typically .25% to .75% higher than the 15 year fixed rate.
– This program is designed for refinances but does work for purchase home loans. However, transfer taxes and higher title fees associated with purchase loans means that not all closing costs with likely be covered. However, the concept is the same.
– This is just an "Indicator" and every situation is different. In some situations (loans over $350k) your lender credit may exceed your actual closing costs by a few hunderd dollars or you may receive a slightly lower rate. For others (loans under $250k) your lender credit may be a few hundred dollars short of covering all of the your closing costs or the program may not work for you. The spirit here is to provide an indicator that will work for many people.
– Why are there No Fees? Your are exchanging a slightly higher interest rate in order to avoid closing costs. Typical closing costs for a $300k refinance are about $3,400. You always have the option to pay some or all of these closing costs in order to receive a slightly lower rate (usually 1/8% to 1/4% lower). The typical break-even period to make paying for a lower rate worth while is 5 to 8 years. Give us a call and we can help you run the numbers.
– The APR (annual percentage rate) is higher because fees paid by the lender credit are still included in the calculation. The lender credit is not included in the APR calculation, which doesn't make much sense…….but it's the way the regulations are written………….
"No-Cost Refinancing" is a risk-free way to take advantage of today's low interest rates. When using this program, you will pay ZERO closing costs. In exchange for this, you will be offered a slightly higher-than-market interest rate. This makes the old rule-of-thumb that it's not worthwhile to refinance until rates are 2% lower than your current interest rate obsolete for many homeowners.
Traditionally, deciding when to refinance has been difficult. You might be concerned that if you lock-in your rate now, and rates go down even further, you'll be sorry. On the other hand, if you don't lock-in your rate now, and rates go up, your opportunity to save may be lost. At National Mortgage Group, we are constantly looking for new and creative ways to save our customers money each month. In 1992, we developed the No-Cost Refinance to help take the guess-work out of refinancing.
Nobody is smart enough to confidently predict the future direction of interest rates. Apply for a No-Cost Refinance today with National Mortgage Group, and hope that rates go down!
THIS IS HOW OUR NO-COST REFINANCE WORKS:
Traditionally, we could offer you our absolute lowest current zero point interest rate, which may be 3/4% lower than your current interest rate. In this scenario, assuming a $300,000 loan, your closing costs would be approximately $3,400.00. Your principle & interest savings (3/4%) would be approximately $135/month. At this rate, it would take you about 25 months to break even. After 5 years, you would have saved a net amount of $4,700.00.
THE NO-COST SOLUTION
Instead of paying $3,400 to save 3/4%, consider saving 1/2% FOR FREE. At this rate, we will pay all of your closing costs for you. Your monthly mortgage savings will be slightly less, $90/month, but your cash outlay will be ZERO (excluding Prepaids and Escrows) No Risk… You're ahead the first month! After 5 years, your net savings would be $5,400.00.
Then if rates go down further, even as soon as 6 months later, you can refinance again.
WE MONITOR YOUR RATE FOREVER!
In fact, all of our customers are automatically enrolled in National Mortgage Group's "Refi Monitoring System": If in the future, we determine that rates have decreased to a point where we can save you at least $75 a month, for free, WE WILL IMMEDIATELY CONTACT YOU. (Would your current lender be so considerate?)
WHO SHOULD CONSIDER A NO-COST REFINANCE?
- Anyone who wants to save money each month for Free!
- Borrowers whose loan amount is over $200,000. The larger the loan amount, the better this program works. Borrowers with Jumbo loans are excellent candidates for No-Cost Refinancing.
- Borrowers whose current interest rate is 1/2 % higher than today's market rate.
- Borrowers who have an Adjustable Rate Mortgage. Lock in to today's low fixed rate before your interest rate adjusts higher!
- Borrowers who are unsure how long they will be in their existing home. Since your closing costs will be ZERO, you'll "break even" immediately.
- Borrowers who believe that rates may go down. If rates do go down, we'll notify you to No-Cost Refinance again!
WHICH LOAN PROGRAMS ARE AVAILABLE AS NO-COST REFINANCES?
The majority of our Borrowers who use the No-Cost Refinance take a 15 or 30 year fixed rate conforming loan or jumbo loan.
WHY OUR PROGRAM IS SUPERIOR
BUYER BEWARE!: Other Lenders often try to duplicate this program in a manner which could be very costly to you in the long run. They roll the closing costs into your loan amount, which decreases the equity you have in your home! Under their plan, you don't incur the closing costs up front…you finance them over the life of the loan.
Other Lenders overstate their "No Cost" program by only paying the Lender charges (not title insurance and other settlement fees). This is no bargain since the Lender charges are less than half of the total Closing Costs.