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Vince Le
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What does "NO POINT & NO COST" mean when refinancing?

Vince Le
Posted Dec 21 2023, 15:06

What does "NO POINT" mean in the ad: "Refinance your mortgage loan when interest rate goes very low with a lender offering NO POINT & NO COST?" 

Thank you.

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Erik Estrada
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Erik Estrada
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Replied Dec 21 2023, 17:37
Quote from @Vince Le:

What does "NO POINT" mean in the ad: "Refinance your mortgage loan when interest rate goes very low with a lender offering NO POINT & NO COST?" 

Thank you.


 Hi Vince, 

This ad means the lender will not charge you points and lender fees when you refinance your mortgage. 

Make sure to read all the disclosures on the ad. if this is an owner-occupied loan, they must disclose fees, points, terms and conditions. 

Usually lenders that offer this just pad the cost with a higher interest rate (known as a rebate). This rebate may cover most of your closing costs. 

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Raymond J. Rodrigues
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Raymond J. Rodrigues
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Replied Dec 22 2023, 02:23

@Vince Le no lender fees in section A of your loan estimate. You will always incur some form of closing costs when refinancing a conventional loan. FHA & VA, not so much.

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Robin Simon#1 Creative Real Estate Financing Contributor
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Robin Simon#1 Creative Real Estate Financing Contributor
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Replied Dec 22 2023, 04:32
Quote from @Vince Le:

What does "NO POINT" mean in the ad: "Refinance your mortgage loan when interest rate goes very low with a lender offering NO POINT & NO COST?" 

Thank you.

"Points" generally refers to a closing fee or general fee paid to the lender at closing, typically expressed as a percentage of the loan amount.  Example = "2 Points" = 2% of Loan Amount, "NO POINT" = no fee or 0% of Loan Almont

 However, "costs" or other fees are typically also included, these are usually more related to the costs that go to different vendors/parties in the transaction, like appraisers, title companies, lawyer doc fees etc.  These are typically not profits to the lender, rather pass-through costs that go to vendors/third parties.  

No Points is generally OK - but I would be buyer beware on anyone saying "NO COST" as that raises some flags since these costs are typically unavoidable on mortgage loans.

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Derek Brickley
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Derek Brickley
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Replied Dec 22 2023, 13:39

Yep sounds like everyone is right on so far.  This would more or less just mean there would be no lender fees associated with your refi.  Note that there generally still would be title fees.

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Preston Dean#5 Starting Out Contributor
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Preston Dean#5 Starting Out Contributor
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Replied Dec 22 2023, 14:07
Quote from @Vince Le:

What does "NO POINT" mean in the ad: "Refinance your mortgage loan when interest rate goes very low with a lender offering NO POINT & NO COST?" 

Thank you.


 Typically 1 point = 1% of the loan. Not sure why lenders feel the need to use different lingo and jargon that just confuse the majority of people. 

Regards

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John Karg
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John Karg
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Replied Dec 22 2023, 21:09

Hi Vince, this just means there are no lender fees at closing. That's something most lenders can offer, however it comes at the cost of a higher rate (there's no free lunch). Feel free to reach out if you have any questions or want me to look over a loan estimate for you. 

John