Why doesn't there seem to be any company that will refinance my mortgage with no closing costs?

Question

My husband and I bought a house last year at 6.5% interest rate.  I am thinking that the thousands of dollars our mortgage company will get each year would be enough for them to want our loan.  Our original closing costs were about $3000 and I hear if we refi that it will be ANOTHER $3000 and that it's not worth it...just pay a little more with each payment.

Now regarding my question, I would think a bank would want to take my loan from another company just to get the thousands in interest we pay each year.  From what I can see, it seems the only "no closing costs" refi opportunities wrap up the "fees" into the loan.

I would like to get my interest rate under 6% and not pay closing costs to refi.  I suppose I am just dreaming?

Steve D · Accepted Answer

Yes, you are pretty much dreaming - while some parts of the closing costs are negotiable (courier fees, etc.),, some are not (recordation fees).  You can probably knock about $500 off the closing with some good negotiations, but the fixed costs are yours and the bank is not going to eat your costs for you.

Also, in case you haven't noticed, average 30 year fixed rates are now up over 6.1%, so about the only way to get a rate below 6% will be to pay points, which will just add to your closing costs.

Finally, those thousands pf dollars of interest don't just go into the coffers of the banks, they are used to pay interest on savings accounts (which is where the money to lend comes from), overhead, salaries, etc.  Then, as in any business, losses have to come from your interest (the good payers always end up paying for the bankrupts, etc., much like those of us who go through the checkout line pay for the shoplifters).

stsis · Answer

I have been pretty upset about this too. I looked at buying a foreclosure and putting 10% down. The apprisal came back with 35 % equity above my 10%. I didn;t want to pay PMI every month but the only way is to refinance and pay closing costs to wipe out monthly PMI. Just seems like a big game of fees.

Hanz H · Answer

I don't want to say it but yes, you are dreaming. The current financial crisis has made things difficult these days. If you want to refinance to more affordable mortgages, you might want to consider looking to the Federal Housing Administration for help.

Anonym · Answer

it relatively is a clean very own loan, there ought to be some expenses = you will for specific choose an appraisal and the distinction interior the valuables tax; possibly some identify expenses ~ maximum lenders would be waiting to roll the fee into the inner maximum loan. and you will actual get a private loan devoid of broking service expenses, it basically potential which you have bigger pastime.

hamrrfan · Answer

Credit is much tighter now than it has been in the past few years.  That is part of the credit crisis that has been in the news.  Part, but certainly not all, of the problem has been easy credit.

Barry auh2o · Answer

You are dreaming.

Why doesn't there seem to be any company that will refinance my mortgage with no closing costs?

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