refi or purchase no closing cost?

rgloans · #1 (**permalink**) 02-06-2006, 10:44 AM

I was surfing online came acroos the ad "refi/ purchase with no closing cost"
I was just wondering if there was a program that a lender will pay for the closing cost? or is it 6% seller contribution? whats the deal guys? thanks

rgloans

brendo927 · #2 (**permalink**) 02-06-2006, 11:03 AM

See I don't understand this at all. Homeowner's nowadays think everything is free. There are always closing costs. State taxes* per dem interest* lender fees and if you are getting a real good rate it should cost 1 or more points depending on your financial situation.

rgloans · #3 (**permalink**) 02-06-2006, 11:16 AM

Quote:

Originally Posted by brendo927

See I don't understand this at all. Homeowner's nowadays think everything is free. There are always closing costs. State taxes* per dem interest* lender fees and if you are getting a real good rate it should cost 1 or more points depending on your financial situation.

I said the same thing but if you do a search online for "no closing cost" they are banks saying that they will do a loan with no closing cost.. thanks

http://www.esl.org/mortgage/no_closing.html

HisHouseMortgage · #4 (**permalink**) 02-06-2006, 02:10 PM

Some banks can offer NO closing cost because they service the loan themselves and can absorb any cost involved in the interest they will earn. They also close the loan inhouse and therefore have no Title co or Atty closing fee. as far as title insurance* they are also self insured (you would be surprised how low title insurance actually is anyway).
Banks also do not consider "Pre-Paids" such as interim interest* tax stamps* and homeowners insurance as "Closing Cost".

As far as a mortgage company or broker is concerned. If you have a $300*000 property and charge a rate that will pay you 2%* you will make $6000.00 in YSP. You do not charge any broker fee and credit the title and underwriting fees back to the deal and you still make $4000.00. Bottom line to client looks like 0 closing cost but in reality the cost is in higher monthly payments to your client.
This form of advertising is usually deceiptful and when explained by another knowledgeable loan officer the advetiser will usually lose all credibility and more than likely the deal. If you truly have a client that wants this program* just make sure you use full disclosures and explain all scenarios. You will win your clients trust this way and another loan officer will not be able to get your client.

rgloans · #5 (**permalink**) 02-06-2006, 02:40 PM

Thanks for the reply HHM* I see how the banks can sell no closing cost. I wonder if there is a way for us get a buyer just to sign the paperwork and move in? maybe with seller contributions? what do you think? thanks
rgloans

brendo927 · #6 (**permalink**) 02-06-2006, 02:47 PM

Here's an interesting question. Has anyone went to a bank as a conforming borrower* high fico low LTV low DTI and gotten a 5.6 30 year fixed.(or a par rate considering the 10 year is doing horrible) They way I pitch 1 point on a loan is the fact that the rate that I can lock a borrower in is lower than what a bank can do saving more over the course of a loan. And the fact that you can write off 1 point on your taxes.

HisHouseMortgage · #7 (**permalink**) 02-06-2006, 02:56 PM

Most non-conforming lenders will allow up to 6% seller concessions towards closing cost. Instead of having a client offer 95k on a home that is listed for 100k have him offer the full 100k with the seller paying 5% (5k) in cc. This way you have virtually 0 out of pocket (they will usually have to come up with a little 4-500)

HisHouseMortgage · #8 (**permalink**) 02-06-2006, 02:58 PM

But be careful NOT to raise the selling price to accomodate the seller to pay closing cost. You will probobly need a copy of the listing for the lender and it better be at or lower than the purchase agreement.

rgloans · #9 (**permalink**) 02-06-2006, 06:46 PM

Quote:

Originally Posted by HisHouseMortgage

But be careful NOT to raise the selling price to accomodate the seller to pay closing cost. You will probobly need a copy of the listing for the lender and it better be at or lower than the purchase agreement.

what if I have a buyer good credit no much for closing cost and the seller is a FSBO can I tell the owner to pay for the closing cost and putting it back in the asking price?
asking price 100,000
property comes in at 115000
buyer pays 105,000
can this be done?