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When people in Missouri hear that they have an option for a zero cost mortgage, their first thought is that it is too good to be true. But it is true; zero cost mortgages are available for people living in Missouri. Getting a mortgage in Missouri with no closing cost may seem more attractive to buyers with limited funds. However, if you choose this option, you have to consider that you are still paying for the closing costs, they are just not upfront. Mortgage professionals will provide a borrower with a zero closing cost in exchange for a higher interest rate. So in reality, you are just paying them over time.

It is important to understand that you are rolling in your closing cost with the purchase price of your home. On the positive side, the only upfront fee you are paying for is a down payment which could allow you to stay with a lower interest rate. However, even though this may be cheaper, it’s still a good plan to compare the monthly payments under each option. You also want to consider how long you intend to be living in the home.

Lastly, if you decide to do a no-cost loan it would be wise to research different Missouri lenders. Even with the zero upfront closing cost, this may not include other fees. Some lenders will not cover some costs and still have you pay mortgage insurance and property tax upfront. So it is important to look at your options and find out the specific costs that are included in the mortgage.

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