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The Catch Behind No Closing Costs Refinance Loans
By:Bryan Quinn
You may have heard about No Cost Refinance or Free Refinance. The concept implies that the only thing charged on this kind of loans is interest. Those who promote this, claim that there are no closing costs, no additional fees, etc.
The financial industry has become increasingly competitive over the past years and lenders are desperate to attract customers, thus forcing their creative media guys to come up with new appealing concepts so as to take hold of as many clients as possible.
There is an old saying stating that “there is nothing really free”, and when it comes to this kind of loans, the saying turns out to be just perfect. So, you want to know what’s the catch with No Closing Costs Refinance? Read on and you’ll find out what lenders have prayed for you to ignore.
No Closing Costs Refinance
Those lenders who offer this kind of loans state that you’d be saving thousands of dollars on closing costs. Well those “thousands of dollars” add up to $3000, $4000 at a most. But if you pay attention to the interest rate they charge on No Closing Costs Refinance Loans you’ll notice that it’s almost 2% above the average interest rate offered by other lenders.
So their claim is only partly true. They are charging no closing costs at all, but what they make you save by not charging any fee, they compensate with overpriced interest rates. If you do your math, unless you’re requesting a 12 months refinance program, chances are that you’ll be paying a lot more than those $4000 in closing costs.
Avoid being tricked
Though ethically questionable, there is nothing illegal about these practices so you need to be particularly careful when looking for a refinance loan. What you may think is an excellent offering, can turn out to be a rip off. Always ask for loan quotes and take your time to analyze them, never rush in and don’t let loan salesmen trick you into signing something you don’t want to sign.
Whenever you hear “interest rate is a bit higher”, find out how higher and whenever you hear “you’ll save thousands of dollars on closing costs”, find out how many thousands. Do all the research you need to, till you find which lender is best for you.
Focus on the Interest Rate
Always remember when it comes to refinance, unless you are refinancing a small amount cause you’ve already paid almost all of your mortgage, you should focus on finding the lowest interest rate available. It is the only true way of saving thousands of dollars with a refinance home loan and anyone who tells you otherwise is lying.
So don’t pay attention to those offering incredible refinance programs at no cost and search the internet for refinance home loan lenders, request quotes and compare interest rates and fees. Once you’ve selected the best deal contact the lender in order to apply for the loan. Take your time to make a conscious decision and you’ll avoid costly mistakes.
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Article keywords: personal loan, credit card, debt consolidation, bad credit, bankruptcy, payday loan, car loan, credit repair, unsecured loan, poor credit, no credit, refinance, bad credit personal loan, bad credit loan, bad credit mortgage, bad credit credit card, bad credit auto loan, bad credit debt consolidation, bad credit car loan, bad credit home loan, unsecured personal loan, 0 apr credit card, debt consolidation loan, cash advance, home equity, guaranteed personal loan, personal loan for people with bad credit, free debt consolidation, debt consolidation services, business loan, student loan, bad credit debt consolidation loan, personal loan online, high risk personal loan, poor credit personal loan, guaranteed credit card, bad credit repair, bad credit card, credit card for people with bad credit, loan for people with bad credit, bad credit home equity loan, bad credit student loan, unsecured bad credit loan, bad credit unsecured credit card, bad credit unsecured personal loan, credit card online, credit card consolidation, online debt consolidation, quick personal loan, no credit check personal loan, fast cash personal loan, personal loan after bankruptcy, fast personal loan, eliminate credit card debt, credit lenders, mortgage loans, loan services
Article Source: http://www.articles2k.com
Bryan Quinn is a financial advisor with more than thirty years of experience. For more smart tips on Refinance Loans and Bad Credit Loans you can visit www.badcreditloanservices.com and also learn more about other financial options.
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