Recently, many clients have been asking about “No Cost Refinance” options.
In fact, “No Cost” doesn’t mean there are no fees at all — it simply means you don’t have to pay them out of pocket. Here are the two most common ways to achieve that 👇
1️⃣ Roll the Costs Into the Loan Amount
This approach adds the closing costs to your new loan balance.
It does not affect the interest rate, but increases the total loan amount slightly.
2️⃣ Increase the Rate to Receive a Lender Credit
By choosing a slightly higher interest rate, you can receive a Lender Credit to offset the closing costs.
To determine the most accurate rate estimate, we’ll need to review your specific cost structure — for example, whether you qualify for an appraisal waiver or title waiver.
For example, here’s a recent Utah primary residence scenario:
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FICO: 780
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LTV: 75%
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Loan Type: 7/6 ARM
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Rate: 5.375%
With this setup, the borrower can receive about 0.45% of the loan amount as a Lender Credit, which often makes it possible to achieve a true No Cost Refinance.
With rates still near a one-year low,
now is a great time to refinance, lower your payment, or improve your loan structure.
If you’d like to see what your “No Cost” options look like, feel free to reach out anytime!