Is a “No Closing Cost” loan right for you?
If you choose our “No Closing Cost” loan option, you will save a lot of money on your purchase or refinance transaction. With a First Nations “No Closing Cost” loan program, there are no points, no origination fee or other loan-related closing costs. All closing costs are paid by the lender. These costs are not “rolled into” your loan balance.
Sounds too good to be true – is there a catch?
A “No Closing Cost” loan can result in immediate savings and may be the right choice for you, but remember that each borrower’s needs and circumstances are unique.
There is a trade-off for choosing a “No Closing Cost” loan. To fund these costs on your behalf, there will be a slight increase in the interest rate as compared to a loan with you paying the closing costs out of pocket. It may not be your best mortgage solution.
Consider that over the last 20 years, the average age of a loan that was refinanced was less than 4.5 years. Many people refinanced multiple times during this time and paid closing costs over and over. If you pay loan-related costs with a normal mortgage and then refinance or move and payoff your loan in less than 7 years, you will be throwing money away.
You must look into your “crystal ball” to see if you will be in your home another 7 years or if you’ll refinance within that time for any reason. Many of our clients who refinanced using our “No Closing Cost” program in 2012, did so again in 2013 when rates dropped further – and paid no closing costs either time.
Our “No Closing Cost” program is not available to all borrowers or on all loan programs.
Talk to First Nations to discuss your options and decide if our “No Closing Cost” program is right for you. At First Nations Home Mortgage, Inc., we answer questions about closing costs every day. Give us a call today.