No Closing Costs vs. No Lender Fee Loans
A true "No Closing Cost" loan differs from both a "No Lender Fee" loan or a loan in which thelender adds the
closing costs to the amount financed. A "No Lender Fee" loan, sometimes advertised by banks, usually won't
cover the title, escrow, and other outside charges you may need to complete the refinance or purchase. "No
Cost" loans will always carry a slightlyhigher rate than a loan that does not pay your costs. In general, a "No
Cost" loan is a better strategy if you plan to keep your loan for the next 1-3 years. If longer than that,
consider paying the costs yourself in order to get a lower rate, which will save you more money overtime.
If you plan to keep the loan for 4-5 years, consider paying the closing costs points, in exchange for an even
lower rate. | |
