Houston Refinance: No Cost Refinance Loan Scenarios

Houston Refinance: No Cost Refinance Loan Scenarios

Contact me, Frank Zhu, and let me help you find the lowest rate in Texas when it comes to mortgage. I’m bilingual in English and Chinese. Give me a call at 512-919-0154 for your mortgage needs.

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Frank Zhu:  512-919-0154

frank@mylendingplace.com

There are two ways to get a no cost closing in a refinance. One is to roll the closing costs into the loan itself and pay more monthly in mortgage and the other is to have the lender pay for your closing costs by increasing the interest rate. So which is a better option for you to save in monthly payment and in the long run?

Let’s illustrate with an example below:

You are refinancing your home for $200,000 with a 30 years fixed. Assuming you have enough equity in your house where you can roll in your closing costs into the loan. You want to find out if it is better to do that or have the lender pay for your closing costs. The closing costs is approximately $4,000.

You have two options for a no cost loan:

Option 1: Rolling into the loan -

The new loan amount would be $204,000 with a rate of 4.875%.  The monthly payment would be $1,080.

Option 2: Lender pay your closing costs-

The loan would be the same with a rate of 5.375%. The monthly payment would be $1,142.

As you can see the difference is pretty clear as rolling the closing costs into the loan is a better option. You have a lower rate plus the monthly payment is lower too. So you would not only save in monthly payment but also you would save additional in interest.

Let me help you to see which option would be the best to suit your needs. Maybe you need a combination of both to get the rate you want as well as the monthly payment you plan to save.

We also offer “no cost” refinance. Contact me, Frank Zhu, and let me help you find the lowest rate in Texas when it comes to your mortgage. I’m bilingual in English and Chinese. Give me a call at 512-919-0154 for your mortgage needs.

 

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