Where can I get the best mortgage rate with zero or low closing cost?

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I am a first time home buyer. I wonder how I can get the best mortgage rate? I am not thinking about buying points or anything. Instead I want to reduce my cost on getting the loan. Is there any websites listing different mortgage rate from different mortgage companies?

  1. Reply
    May 14, 2011 at 11:23 pm

    I stumbled across this site the other day when I was doing a similar search: http://www.mortgagerateauctions.com . “Mortgage rate auction” sounds some interesting concept. It lets you enter the mortgage rate and closing cost you desire, then lets mortgage brokers bid against each other for your business. Doesn’t cost anything and there’s no commitment. Seems like a good thing to try.The winning broker is the one who can give you the lowest closing cost and meet the terms/interest rate you wanted.

  2. Reply
    John Neil
    May 15, 2011 at 12:07 am

    You may want to try zillow.com or lendingtree. They are based on the same idea that lenders will submit bids to compete for your business. However, be aware that lenders don’t work for free and you are going to pay for a refinance whether you pay closing costs or whether the lender charges you a higher than market interest rate to get their compensation. There is really no such thing as a “no-cost” refinance.

    The size of your loan will determine how much higher the interest rate has to be for the lender to pay your closing costs and still be compensated. For example, if you have a $ 200,000 loan amount and the closing costs on a standard refinance with a par interest rate for a loan that size are $ 4,000. Lets say the par rate is 5%. “par” just means that you don’t pay extra points and that the lender doesn’t make any compensation on the back. However, at 5.25% the lender might get paid 1 point when the loan sells on the secondary market. At 5.5% that lender might get 2 points in the secondary market. at 5.75% maybe 3 points. So to do a “no-cost” and still make 1 point compensation, the lender will offer you 5.75%, make 3 points and use 2 of those points to pay for your $ 4,000 in closing costs.

    A “no cost” mortgage can make a lot of sense if you aren’t planning on staying in the home long term. If you are planning on staying long term (maybe 5 years or more), you might save more money in the long run by paying some closing costs and getting a lower rate. Just my two cents as someone in the industry.

    For more info, visit my website at http://www.MortgagesExplained.net

  3. Reply
    Linda B. Jeter
    May 15, 2011 at 12:22 am

    Yes you can have mortgage loan in low rate, these loan are design for those who have low income, can’t afford high mortgage rate, I was going through research about low rate mortgage it would be pleasure for me to help you: http://blog.badcreditwhiz.com/mortgage-loan/

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