When obtaining a home loan, you’ll receive two important documents from your lender: a loan estimate and a closing disclosure. On the surface, these documents are very similar, but they both serve different purposes. Here’s what you need to know about the differences between these two forms and what each means for you:
No Cost Refinance Options for Home Loans in Missouri
People look for no cost refinance home loans in Missouri if they don’t want to pay any up-front fees. If you are planning on getting another loan in the future, it is crucial to have low or no up-front costs. If you don’t plan on living in your home for the life-time of the loan, you should look at the true cost of the loan including its fees. If you decide to do a no cost or low cost mortgage, the refinance process becomes simpler. You can focus on the rate and APR and not be concerned about the fees.
No cost home loans in Missouri can be used in both purchases and refinances; however, it is more common in refinances. The best thing to do is shop around and find a lender that will refinance home loans in Missouri with no closing costs. However, a no cost or low cost refinance loan may not be the cheapest option. Lenders tend to raise the interest rate on the loan to offset the fees. They can raise it up to .25 to .5 higher to cover their costs and the third party fees.
There are three options for no cost refinance home loans in Missouri. The first option is to have no points but to pay lender fees and 3rd party fees. The second option is to have zero lender fees but to pay the 3rd party fees. The third option is no cash upfront but all the fees and costs are bundled in the loan’s interest rate.
A true no cost mortgage would have an interest rate that would match the other loans and no payments. However the likelihood of finding this is nearly impossible. If you are thinking of selling or refinancing your home in a few years, you may want to choose the no cost or low cost refinance option. However, if you think you are going to stay in your home for 5 years or more, it may be a good idea to pay all the fees so that you can have the lowest interest rate possible. Another scenario is if you plan on living at your home for 3 to 5 years and your closing costs are less than the additional interest. This option would save you money long term if you pay the closing costs up-front.
Do you feel stuck on deciding what the best option is for you? Don’t fret; let us do the work for you. Set up a meeting today at an office nearest you by visiting one of our 6 convenient locations in the local St. Louis area.The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.