If so I may have a new lender.
http://www.lnxloans.com/refinance/nocost.html
P.S. I am in now way connected to this company nor am I recommending them, I would just like to hear opinions or ideas of how they recoupe the closing costs ( I checked the rates, and they are right on what they should be.)
Never heard of them, but let me know if you apply through them and how it goes. It sounds shady, but who knows.
It’s possible that they increase the interest rate a bit and offer you a lender credit towards your closing costs. It’s not illegal, but it often happens without the borrower knowing that they are paying a higher rate than they ought to.
That’s exactly how the advertisement works. Every lender in the world can offer you the same option - no closing costs refinances, purchases, etc… as long as they can generate enough profit on the “back” by charging you a higher rate than what you would normally get for paying “typical” closing costs.
For example if you agree to pay the typical $2k in 3rd party closing costs, your rate would be 6%. If you pay the typical $2k in 3rd party closing costs, plus a 1% origination fee, your rate is reduced to 5.75%. If you don’t want to pay the closing costs, or the origination fee, your rate is 6.25%. You don’t directly pay for the closing costs, but you are paying for the closing costs through a higher rate.
I’m not saying it’s a bad thing, heck, if you are able to reduce your interest rate, get better terms, and not pay any closing costs - that’s a good deal. It might not be as good of a deal as if you pay your closing costs for a lower rate, but it would be a better deal than if you didn’t do anything at all. Just keep in mind that practically every loan officer has this option… and just like all financial decisions, compare your options to determine the best lender for you - whether you want to pay closing costs, or not.
I see that they don’t do business in all states, just a select few. Click on the states drop down menu to see if your state is included, even before you start anything with them.
Good tip vaddie, however one of the first few preliminary questions a loan officer or mortgage broker usually asks is what state is the property in, so most places won’t let you get too far into something that they couldn’t even do.
That’s correct, liverichly. My comments was for those who would like to use the online form.