It seems today that there are commercials running all over the television, radio, Internet, and newspapers that offer "No Closing Cost Loans!"To the average consumer, these may sound like a great deal.
However, with mortgages, just like with anything else, you get what you pay for.
Homeownership is possibly the single greatest goal for many Americans.
Owning one's own home instills a sense of pride, helps establish a healthier environment for families, and can help build up the quality of neighborhoods.
People tend to take better care of something that is theirs rather than something that they rent.
In addition to these intangibles, there is another very real benefit to purchasing a home; you are buying an asset.
Yes, some of you understand that until the property is paid for in full it is a liability, but at least you are paying toward an asset - quite possibly the largest asset you will ever have.
So when it comes to financing your largest asset, you would want the best financing available, correct?I'm sure you understand that you cannot get the best financing available for free.
In this article, we will explore what "No Closing Costs" will get you.
First, let's define what closing costs are and what they are not.
There are two primary terms associated with the fees on a loan: settlement charges, and closing costs.
Settlement charges are all of the funds that are required to close the loan, and they include all of the closing costs plus items that cannot be waived.
They are items such as prepaid interest, hazard insurance reserves, and property tax reserves, among others.
Closing costs are funds that pay the people who work on your loan, and they include (but aren't limited to) items such as a processing fee, broker fee, origination fee, and title fee.
There can be many people who work to get a loan done for you: a broker, a processor, an appraiser, and an underwriter to name a few.
These people are all trying to make a living, and therefore deserve to get paid for their work.
It has been our experience that the "No Closing Cost" option will get you a broker that doesn't want to shop as thoroughly for the best loan, or title work that doesn't show up on time or accurately.
Maybe the processor isn't as thorough with his/her work.
Another downfall of not paying for a quality loan is the possibility of getting locked into terms that you weren't aware of.
Many upset clients that have come to us seeking help are tired of the "bait and switch.
"Remember, you get what you pay for.
Finally, a "No Closing Costs" loan will certainly carry a higher interest rate.
If you are expecting to stay in your home for a number of years, you will end up paying more for the "No Closing Costs" loan.
A quality brokerage firm should give you an honest consultation on what your best options are.
Their services should be accurate, honest, and timely.
You should expect to pay them for the hard work that they do, but their fees should not be excessive.
However, with mortgages, just like with anything else, you get what you pay for.
Homeownership is possibly the single greatest goal for many Americans.
Owning one's own home instills a sense of pride, helps establish a healthier environment for families, and can help build up the quality of neighborhoods.
People tend to take better care of something that is theirs rather than something that they rent.
In addition to these intangibles, there is another very real benefit to purchasing a home; you are buying an asset.
Yes, some of you understand that until the property is paid for in full it is a liability, but at least you are paying toward an asset - quite possibly the largest asset you will ever have.
So when it comes to financing your largest asset, you would want the best financing available, correct?I'm sure you understand that you cannot get the best financing available for free.
In this article, we will explore what "No Closing Costs" will get you.
First, let's define what closing costs are and what they are not.
There are two primary terms associated with the fees on a loan: settlement charges, and closing costs.
Settlement charges are all of the funds that are required to close the loan, and they include all of the closing costs plus items that cannot be waived.
They are items such as prepaid interest, hazard insurance reserves, and property tax reserves, among others.
Closing costs are funds that pay the people who work on your loan, and they include (but aren't limited to) items such as a processing fee, broker fee, origination fee, and title fee.
There can be many people who work to get a loan done for you: a broker, a processor, an appraiser, and an underwriter to name a few.
These people are all trying to make a living, and therefore deserve to get paid for their work.
It has been our experience that the "No Closing Cost" option will get you a broker that doesn't want to shop as thoroughly for the best loan, or title work that doesn't show up on time or accurately.
Maybe the processor isn't as thorough with his/her work.
Another downfall of not paying for a quality loan is the possibility of getting locked into terms that you weren't aware of.
Many upset clients that have come to us seeking help are tired of the "bait and switch.
"Remember, you get what you pay for.
Finally, a "No Closing Costs" loan will certainly carry a higher interest rate.
If you are expecting to stay in your home for a number of years, you will end up paying more for the "No Closing Costs" loan.
A quality brokerage firm should give you an honest consultation on what your best options are.
Their services should be accurate, honest, and timely.
You should expect to pay them for the hard work that they do, but their fees should not be excessive.
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