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How To Refinance Without Closing Costs

A young couple look at a computer together and research different refinance options for their new home like no cost refinance loans and no money out of pocket refinances.

Refinancing is an excellent way for homeowners to benefit from low-interest rates, saving themselves a lot of money in the long run.

There are two options borrowers have when refinancing with JVM to avoid closing costs: a “No Cost Refinance” and a “No Money Out of Pocket” loan.

No Cost Refinance

When a lender offers a No Cost Refinance, they are saying that they will cover all of your “non-recurring closing costs” or one-time fees. These fees cover escrow, appraisal, underwriting, processing, among others. This does not mean that borrowers will not need to bring in any cash to close. Simply put, it means that the lender will cover all the one-time fees that occur during a refinance transaction. Borrowers will remain responsible for all “prepaid items,” and recurring closing costs like interest, property taxes, and hazard insurance.

Lenders can cover closing costs for borrowers by providing a lender credit. Borrowers receive this lender credit by taking a slightly higher interest rate to cover the closing costs.

No Cost Refinances should NOT be confused with “No Cash Out of Pocket Refinances.”

No Money Out of Pocket Refinance

No Money Out of Pocket Refinances are very different from No Cost Refinances. The critical difference between the two is that lenders do not cover any closing costs for No Money Out of Pocket Refinances. No Money Out of Pocket Refinances allows borrowers not to pay anything upfront at the close of their loan. Lenders can do this by increasing the principal balance to bury non-recurring closing costs into a larger loan amount. Increasing the total loan amount or principal balance is how borrowers can cover prepaid items like insurance and property taxes. This should not be confused with increasing the loan amount to cover non-recurring or one-time fees such as title, escrow, appraisal, underwriting, etc.

Questions About Refinances?

If you are interested or considering a No Cost Refinance or a No Money Out of Pocket Refinance, our team is available to help! All of us at JVM Lending are incredibly knowledgeable about different loan programs homebuyers can refinance into and can give sound advice on how to manage your refinance qualification. Our Client Advisors are available 7 days a week for any questions by phone at (855) 855-4491 or by email at jvmteam@jvmlending.com. 

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167