No Fee Refinance

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No-fee refinance has existed in the mortgage industry for over 15 years. No-Fee refinance has a slightly higher rate of interest than the other mortgage loan. This mode of refinance is usually termed as no-fee refinance because the refinance mortgage is not inclusive of the following fees as usually included in the other mode of refinance mortgage: - Appraisal fee - Credit report - Lenders fee - Brokers fee - Title Insurance - Escrow fees - Recording Fees   No-fee refinance loans have gained popularity in the refinance markets demand due to the growth property values and the consequently increasing loan amount. However, no-fee refinance is not available on smaller loan amounts and as a borrower your credit cannot exceed the total non- recurring closing costs. The non-recurring closing costs are Property taxes, Interest and Insurance.   As a borrower it is important to be sure of what you really want and you should be totally aware of what you are really getting from your lender. Due to unscrupulous lending practices occurring in the secondary market, lenders are appropriately under increasing scrutiny and consumers are often doubtful of the lending activity. Hence, it is important to do your homework about the no-fee refinance structure and modes of borrowing before you sign any dotted line.    Borrowers often tend to confuse no-fee refinance with no out-of-pocket loan. No-fee refinance and no out-of-pocket are however, two different loan structures. In the no-fee refinance mortgage closing cost is not included in the loan amount and this is what differentiates it from other loan structure.   If you are still confused, the best way to determine whether your loan is truly a no-fee refinance loan is to simply verify the current outstanding loan balance on your existing loan to be paid off so that it is equal to or more or less close to the same as your new loan amount and make certain that the only fees you are paying out of pocket are the recurring costs of interest, taxes and insurance due.  Next add up all the remaining non-recurring closing costs on the estimated closing cost statement and make sure you are receiving a credit from your lender equal to that total amount. This will ascertain that you are moving towards a no-fee refinance structure.   As a borrower you should consider a no-fee refinance only if you are planning to buy own a property for not more than five years or if you are short on cash to close on a purchase. You can determine this by calculating your break-even point. Calculating your break-even point is very simple, just look at the difference in your payment for a no-fee refinance loan and a loan with a costs & fee and the and then divide the difference into the amount of non-recurring closing costs that you would have to pay on closing. This result will help you to understand how many months it would take you to earn the expenses of the closing costs so you can then compare that time length to the frame of time you anticipate living in the property.