The theory behind a no-cost mortgage is great. It puts all the fees on the lender, who is better at negotiating them than you anyway, so all you theoretically have to do is shop based on the rate. In typical mortgage shopping, the lenders play a constant game of moving pieces. If you shop by rate, they nail you with points. If you only shop zero points to eliminate that, they’ll start varying their fees. You can minimize the lender’s advantage by doing a no-cost refinance, but there are a few places here where the new lender can still take advantage of you.
First, make sure you know what happens with the old escrow account. If the lender makes you pay it to them (“because we paid for your new escrow account”) that isn’t as good personal loans Wyoming a deal for you as if you get your old escrows back. How bad of a deal depends on how much you had in there. I seem to remember falling for this trick with one of my refinances.
Sometimes, it might be better to have the lender pay everything, then you can take your old escrow account and apply it to the principal
Another place you can get burned is with the new escrows. Some no-cost refinances will fund your new escrow account AND let you keep the old one. However, you might not get as good a rate. For example, with my last refinance I was offered two options. They would pay for my new escrow account (and interest which we’ll get to next) for a 3.5% refinance, but not for 3.375%. They wanted me to cover those expenses for 3.375%. I figured since I would be paying those expenses myself if I didn’t refinance (remember nobody else will pay your interest, taxes, or insurance), I might as well take the lower rate. مطالب بیشتر With some refinances the lender will cover the interest for the part of the month after closing