Should I refinance my condo? My friend loan officer says, no closing cost, is it possible?

Question : Should I refinance my condo? My friend loan officer says, no closing cost, is it possible?
He says he can take out the PMI and give me one month free, the second month he can add it to my loan. Is he going to add the closing cost to my loan also? How much does he make if he refienance my condo?
no closing cost refinance

Best answer:

Answer by CMR2006
Anything is possible these days… Why do you want to refinance? If it will make a major difference in your payments, you may want to consider it, otherwise stay put. Your “friend” will be making a commission at your expense, regardless of the amount. You may be better off just to give your friend some money……

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Comments (5)
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#1 written by Stacey B 1 year ago

There are always closing costs, don’t let anyone tell you different. They can be rolled into your loan so that there is no money out of pocket. The reason that you get one month free is because mortgages are paid in arrears as opposed to up front such as rent. So you would actually have that one month of interest rolled into your new loan. He doesn’t sound like a very good friend. He’s allowed to make up to 7.99% not that he will but, it’s allowed. I’m a loan officer….if you have any additional concerns or questions. =)

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#2 written by Searchlight Crusade 1 year ago

This guy is not your friend. You *NEVER* skip a month’s payment. *Nobody* ever gives you even one day free interest. What happens is that it gets added to your balance, where you pay interest on it, and you have to pay it back eventually. If that’s what you wanted, well and good. But that’s not what he told you was going on.

I’ve done dozens of true zero cost loans. They do exist. But that doesn’t mean that you’re getting money that you would have to pay anyway paid. Monthly interest is something that you’re going to pay every month as long as you have the loan. Just because there’s no money out of your pocket doesn’t mean it didn’t cost you anything. I’m helping a client right now who was told the same thing you were. The previous loan officer charged him three points origination and got at least two more Yield Spread rebate from the lender, rolling all the costs into the loan.

Here are a articles I’ve written on the subject

http://www.searchlightcrusade.net/posts/1151621519.shtml

http://www.searchlightcrusade.net/posts/1137637391.shtml

http://www.searchlightcrusade.net/posts/1122472894.shtml

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#3 written by Skip 1 year ago

You know I am amazed at people that listen to the no closing cost and no out of pocket expense to you from loan people.

OK let’s get a couple of things out of the way? Would you work for free for anyone friend or enemy? Well loan officers don’t either. You will pay for the fees closing cost one way or the other.

If you are paying PMI now then it would be a good idea to refinance, eliminating that unnecessary fee that you can not deduct from your taxes.

Look at how much you are paying now, does the refinance reduce your monthly payments? Do you get a chance to pay off high interest credit cards or put money in the bank for necessary reserves?

Those are several reasons for refinancing, how they will help you.

Any cost incurred in a loan is tax deductible on sch A of your federal income tax, so that would not be a problem. Check with your tax preparer for any tax advice.

The fact that your friend is telling you that he can refinance you with a no closing cost loan without explaining to you how this is accomplished is something you ought to inquire of him.

The one month free is not really free, you have to pay the interest upon closing which normally have a lapse of about 20-35 days so your next payment is due 30 days later. What a friend you have.

I hope this has been of some use to you, good luck.

“FIGHT ON”

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#4 written by Goldenbearloan.com 1 year ago

No Closing Cost term it self is a false term. There are always closing cost because third parties like title company and recording fees are always charged. Unless the company is going to pay for them out of there pocket, which is unlikely than probably the term Closing Cost can be applyed. BUT,BUT this is if they dont charge a higher interest rate to cover the costs and/or they give you a higher loan amount in your Cash out refinance to cover it. What happens is you can get the closing costs refinanced from the equity in which you gained in the property. Yes the equity can pay for it. Good is that you pay no closing costs at the time but you just refianced it, so technicaly you are paying it monthly until you end the term of the note. If you take that to the 30 year term or note term you really did a job on yourself.

So No closing costs is term not used correctly in the RE Buisness. Just beware and always read your Good Faith Estimate or GFE.

http://www.mtgprofessor.com/ Learn more I did and do all the time.

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#5 written by rayce92 1 year ago

unfortunitely your friend is out to make a living and loan officers can make it look like you are not paying closing costs when in fact you are paying the normal amount. Loan officers can make money on what is known as the back end. It is when he/she can negotiate a loan amount from a bank and sell you a loan at a higher rate. The bank will pay the loan officer the difference and you will not see it in the paperwork. be careful when you look at the papers because there is a difference between annual percentage rate and the interest rate.

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