that is, it would require less than 5 years breaking even the costs of a no cost loan and a zero point loan. In this scenario, no closing costs loan is a better option. Let’s compare two other cases. Option A – cost loan, interest rate no. of 6.25%, and monthly payment of $1,847 option C -, One point rate loan, interest of 5.75%, and monthly payment of $1,751 total non-recurring closing costs (including point) – $5,800 the difference in monthly payments would be $ 96. dividing it into the $5,800 closing costs the period to re-coup turns out to be 5.01 years.
Even in this case, for individual intending to own the property for few years, no cost loan makes more sense. Pro & cons for no. cost refinance the main benefits of availing a no cost refinance is that it could save thousands of dollars in some situations. Depending on the number of years that you are going to avail your loan for, possibly, you might be able to find good deal when availing this type of plan. It all depends on the economy and what you are being presented, though, if you’re able to come up with a unique way to refinance which are more gainful to you, then you should always get it about author: mortgage refinancing closing costs is one of the best ways to refinance your mortgage. Why pay thousands of dollars in closing cost if you do not have to? Lender or broker wants to pay settlement costs.