Buying a house is expensive, but your expenses don’t stop there: you will need to spend some money on home improvements, repairs, etc. So, it makes sense that after you have paid your mortgage loan you want to have some finances on hand that you can invest in the property.
However, you also need to pay a closing cost which usually includes: homeowners insurance and property taxes, third-party chargers for appraisals, title insurance, and escrow services, and, of course, the lender’s fee. If you want to avoid paying this additional money, then a no closing cost home loan might be the right option for you.
How Does Zero Closing Cost Mortgage Work?
Instead of paying a lump sum of money upfront, you pay a little bit extra with the interest on your loan. When you decide whether to use a no closing cost mortgage you need to do your math or contact us, so we can estimate how much extra you will pay month after month.
No closing cost home loan makes sense if you are not planning to stay in your house for more than five years. In this case, the amount you overpay each month on interest will not be higher than the money you need to pay when closing the deal. Nowadays, Californians are choosing no closing cost refinance programs.
Applying for a No Closing Cost Home Loan
An important step is selecting the correct type of loan for your situation to keep the closing cost to the minimum or to go for a no closing cost loan. Do your homework and study all the options that are available to you, whether it is a conventional loan, a VA home loan, an FHA loan, or any other.
If you need help figuring out if the loan is right for you, our team will gladly assist you with calculations and the ideal loan option for your situation.
