No Cost Mortgage Refinancing

No cost mortgage refinancing is available through companies online who take credit and personal information from the applicant, and pass that information on to at least four mortgage companies who will check the credit and make an offer. With that many companies offering no cost mortgage refinancing, the borrower has more assurance that he is making the best choice for positive changes in his/her mortgage terms. While the mortgagor is accepting all the costs for this no cost mortgage refinancing, there is an added cost to the borrower in the form of a higher interest rate. For instance, one company offers an interest rate of 5.500% when the buyer pays the closing costs up front, and it becomes 5.750% when the mortgage company picks up the closing cost tab.

The reasons for seeking no cost mortgage refinancing are usually to change an adjusted rate mortgage to a fixed rate, or to find a lower interest rate and lower payment schedule. Where an adjusted rate mortgage is in place, it usually means that every five years the mortgage holder reviews the interest rate and changes it up or down to meet the current rate being charged. More often than not, it is an adjustment upward. Either way, this leaves the homeowner in the position of not knowing what his mortgage payment will be at each interval. No cost mortgage refinancing with a fixed rate gives the homeowner the advantage of knowing his payment will not vary over the span of the loan unless there is a rise in property taxes. It is not surprising that no cost mortgage financing is becoming more popular.

If a house was purchased at a time when interest rates were high, it is a great advantage to the homeowner to seek no cost mortgage refinancing when he sees that interest rates have dropped. With no cost mortgage refinancing, the final balance will come down, and so will the monthly payments. It might even be possible to shorten the loan length so he can be mortgage debt free much earlier than originally planned.