| Zero Closing Cost ... Really? |
Yes. There are no points, origination fee or costs of any kind. Guaranteed!
All closing costs including appraisal, credit report, lender fees, settlement fees, title insurance, recording fees, and courier fees (and any others), are paid by DNJ Gateway Mortgage. These costs are not "rolled into" your mortgage balance. We do not surprise you at closing. |
| Shouldn’t I wait until interest rates drop 1% to refi? |
| No. Forget the old rule. The truth is, anytime you can lower your rate — even an 1/8th of a percent is a good time to refinance.
When the loan has ZERO costs then any drop in rate is an immediate savings to you. If the No Cost rate is lower than your current rate ACT NOW. There is no reason to wait with our program. If rates drop in the future we notify you. You can Refi again with No Cost and save even more. We had clients refinance the same home 5 times as rates have dropped over an extended time. |
| Why are your rates without cost the same or even lower than the bank and other lenders when they are charging costs? |
We have better pricing and lower operating costs. Our business philosophy is simple - high volume/great customer service. We simply make less on each loan than our competitors and try to help more customers each month.
Our long history, large volume, high quality of our loans and our low cost approach to doing business give us a competitive advantage. |
| What’s the Catch? This sounds too good to be true... |
| No catch! The rate on a no closing cost loan is slightly higher than the rate on a loan if you pay closing costs. We’ve been doing loans this way for almost 20 years. ZERO complaints with the Better Business Bureau. ZERO reports with the Commission of Banks. |
| Then how does it work? Someone is paying the costs. |
Because the loan has this higher interest rate the lender pays us a commission. We use this commission (called the yield spread) to pay all the loan related costs. Most lenders pass through all the costs. Since we are paying all the costs we are very motivated to keep the costs as low as possible and operate very efficiently. We can then offer you lower rates. |
| Won’t I be better off in the long run if I pay closing costs? |
We’ve done the analysis and calculations and we think for most people in most situations the answer is NO. The first and MOST IMPORTANT QUESTION to answer for your self is…..
What’s the long run for you?
Will you be in this home another 5-6 years ? If rates drop will you have this mortgage for another 5-6 years ?
Do you know any one who has paid off a 30 year mortgage ? Think how frequently you or your neighbors move The national data shows that the average age of a loan at the time of refinance is 3.2 years. For almost all loans if your refinance or payoff your loan in less than 6 years you will be throwing away money.
The truth is that interest rates change AS OFTEN AS STOCK PRICES. Interest rates follow the bond market and can change as rapidly as stock prices. Just in the last year the mortgage market has changed MORE THAN A FULL POINT. Our customers who did no cost loans at the beginning of the year were refinancing to lower rates by the fall.
Some of our clients, have refinanced numerous times AT NO CHARGE. Had they paid points or closing costs, they would have LOST that money because RATES DROPPED. Paying costs can be like flushing it down the drain. We have clients that refinanced 5 times — had they paid closing costs, they would have lost over $19,500 by now. |
| So should I ever consider paying closing costs? |
Yes. A No Cost loan is great and right most of the time but not all the time.
We can do loans with closing costs as well. Our experienced loan officer can help you consider all your options.
If rates get to a true historical low point and IF you are confident you will be in your home another 5 years then we will recommend that you consider a loan with costs.
Some adjustable rate loans (ARMs) have very short break even time periods. Paying a modest amount of closing costs ($500 - $1,500) on a 3/1 ARM or 5/1 ARM can be a good strategy.
Some borrowers will not qualify for a No cost loan. Some specialized loan programs do not allow a No Cost approach. If you credit scores is below average and/or you have little or nothing to put down then paying costs may be a better option for you. |
| When can I refi again? |
When rates drop you can save again. With our no point, no fees, no closing costs program, should the rates come down, we can refinance your loan again AND it won't cost you a penny to do it the next time around.
There are NO PRE-PAYMENT PENALTIES with our loans. Some programs do require a certain amount of time between refinances 60-120 days.
The loan has to be sold into the market before it can be pulled back. Ask us for all the details. |
| Will I have to write a check at closing? |
| We pay all closing costs (origination fee, appraisal, attorney, title insurance, credit report, bank fees, flood certification, recording fees, etc.) on your behalf. However, there may be some out of pocket funds required at closing depending upon a couple of factors. If you have an escrow account, it does not roll over to your new mortgage. This means we must collect for the new escrow account whatever amount should be in that account at this time of year (currently about 12 months of taxes and some additional amount for homeowner's insurance depending upon when that your payment is due). You will receive a refund from your current lender, any funds they are holding in escrow for you - usually about 30 days after we close. There is also one month of interest collected at closing but you don't make a mortgage payment the first of the next month. Therefore, the funds collected should be offset by the escrow refund and saved mortgage payment. The funds required at closing can usually be added to your loan balance if you choose. |
| Will getting an appraisal affect my property taxes? |
| BIG MYTH: Doing a refi; or getting an appraisal has nothing to do with your property taxes changing because of the refinance. |
| When Should I Refinance? |
Please see our When to Refinance page by clicking here. |