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No closing cost refinance is true, but there is a catch a borrower who is refinancing must accept an interest rate that is a little higher. This happens because the mortgages are given higher rates than mortgages that have buyers who pay all closing costs. Usually, the loans have interest rates about 0.25 to .50 percent higher than other loans. The more interest is reworked as a yield spread for lenders, and it shows as a fund from which closing costs can be paid. A question that clients have is a no cost refinance good idea? If you are planning to stay in the home for a short period of time than a no cost refi may be a good option for you. If you are planning to stay for a longer period of time than getting the lowest possible interest rates available would be a better option.

When to refinance is always on a borrowers mind. When a borrower wants to refinance they should think about what they want to get out of it. A client should remember that a refinance does not get rid of debt it restructures it. A refinance is when one mortgage loan is paid off by a new mortgage loan. A time to refinance is when a client has a large amount of debt and wants to consolidate some. This can only happen if the property has value. Also a reason to refinance is when the interest rates or a percentage point or more less than your current rate. If a borrower also wants to change the term life of their loan, like from a 30 to 15 or 15 to 30 a refinance would be the answer.

A client also wants to know when should I refinance. A good time to refinance is when interest rates are lower than your current rate. If you want to tap into your equity a good time to refinance also. A client that’s thinking about refinance should take everything into consideration. One should take notice how much the new loan costs and how long you’re going to be in the new loan. To know if you should refi you should subtract your current mortgage payment from the new one your looking at and see if the savings or significant.

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