Is There Really a No closing cost loan?
What all borrowers need to understand is there are ALWAYS costs associated with a new loan. Most of those costs are generated by your state or local government (recording fees, title insurance, etc). No lender is able to eliminate the need for those costs. What some lenders do is tell you there are no costs but then give you a higher interest rate to make up for the fact that they have to pay those costs for you. In the short term they fund those costs, however over time they more than make up for it collecting the higher interest from you as you make your payments. Borrowers need to understand that if you plan to be in the home for a few years, you are better off paying the closing costs and keeping the lower rate.