No Closing Cost Loan Samples Shoing how It can Be Done for No Cost To The Borrower

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What our clients are saying about us:

We closed on our new home prior to selling our existing home. Utilizing Family Mortgage’s No Closing Cost loan we were able to conserve valuable cash and have kept our options open to take advantage of any future interest rate improvements! ~ Tony & Vicki Bryson

I have been able to restructure my mortgage to take advantage of lower rates utilizing Family Mortgage’s No Cost loan option on 4 different occasions over the last 5 years! ~ Jay & Sara McClure

Scott talked us into paying a little higher interest rate and going with a No Closing Cost refinance. He called us back 6 months later to tell us that rates had dropped another 3/8% and that he could redo the loan for free again! ~ Hugh & Valerie Gallagher
"Being an active real estate investor, I needed a lender that reacted quick and gave me maximum flexibility. Family Mortgage provided that flexibility and had me closed in two weeks. " ~ Michael Parker
"Being a single parent, I had been working hard to get in a position to purchase a home. Scott convinced me that it was worth a try. Two months later, I am in my very own home in a school district that my kids love. " ~ Debbie Rohde
"Family Mortgage had us approved in 30 minutes and after one meeting with Scott, I showed up at the closing table. We couldn't believe how fast & easy the process was!" ~ Chris and Heather Mora

One of the least understood elements of a No Closing Cost Mortgage is the correlation between the size of the loan and the interest rate. In general, the lower the loan size, the higher the interest rate that will be charged to facilitate paying the closing cost. Let’s take an example to illustrate the point. You have a loan amount of $100,000. The closing costs are $2,200 or 2.2 %. So the interest rate charged would need to yield 2.2 discount points. Now let’s go to the other extreme. You have a loan amount of $325,000. The closing costs are $3,300 or 1.01 discount points. So the interest rate charged would need to yield 1.0 discount points. We would need nearly 2.5 times more yield on the smaller $100,000. loan.

It is generally not practical to consider a no cost mortgage when your loan amount falls below $175,000. We have provided sample charts for loan sizes ranging from $175,000 to $400,000 that provide estimated break-even points and interest rate differentials. If your loan amount exceeds $400,000, this will work even better.

	With Closing Costs	No Closing Costs	Misc. Information
Loan Amount Range	$175,000-$225,000	$175,000-$225,000
Interest Rate	6.5%	7.0%	Rate typically ½% higher with no-cost option
*Typical break-even point	+/- 4 Years		Depends on loan amount and closing costs

	With Closing Costs	No Closing Costs	Misc. Information
Loan Amount Range	$225,000-$275,000	$225,000-275,000
Interest Rate	6.5%	6.875%	Rate typically 3/8% higher with no-cost option
*Typical break-even point	+/- 5 Years		Depends on loan amount and closing costs

	With Closing Costs	No Closing Costs	Misc. Information
Loan Amount Range	$275,000-$400,000	$275,000-$400,000
Interest Rate	6.5%	6.75%	Rate typically ¼ % higher with no-cost option
*Typical break-even point	6.0 Years		Depends on loan amount and closing costs

*Typical break-evenpPoint is defined as the total closing costs divided by the monthly savings that the lower interest rate option provides. Said another way; the time required to recapture the closing costs you might pay with the monthly savings provided by the lower interest rate.