House Buyers Information

You’ve probably heard commercials about “No Closing Cost” mortgages and how much money you can save. In Phoenix, you can’t turn on the radio without hearing a commercial about no closing costs on an Arizona Mortgage Refinance.

Unless you are a mortgage insider you probably don’t know there is a dirty little secret about “No Closing Cost” mortgages. The truth is that you either pay for closing costs at the time of closing and have them included in your mortgage, or , in the case of a “No CLosing Cost” mortgage, you pay for them many times over again in the form of higher interest rates and payments for as long as you have your mortgage. The way a mortgage company makes money is by charging you a higher interest rate than the “par” rate they are quoted by the money provider.

For a 30 year fixed rate mortgage, you would have to make a decision if the difference in the monthly payment between a loan with closing costs included in the mortgage or a “No Closing Cost” mortgage is worth it. For a “No Closing Cost” mortgage you would probably have to pay over $200 a month in increased payments in order to cover the closing costs.

Like they say, “Nothing is free.” That includes mortgage closing costs