Definition: A no closing cost refinance is a transaction where you refinance without paying closing costs. A refinance happens when your new loan pays off and replaces an old loan. A no closing cost refinance means that you avoid paying up-front closing costs when you complete the transaction.
Are No Closing Cost Refinances a Good Deal?
While they sound attractive, no closing cost refinances are not always your best bet. By avoiding closing costs today, you might set yourself up for higher overall expenses over time. To understand the tradeoffs, learn the basics of no closing cost loans.
When to Use a No Closing Cost Refinance
If you’re going to use a no closing cost refinance, make sure it makes sense. Generally, no closing cost refinances make the most sense when:
- You won’t keep the loan for very long
- Interest rates are expected to drop
- You plan to refinance or sell the property soon
Also Known As: No closing cost mortgage, no closing cost refinancing.
Examples:
I'll use a no closing cost refinance to lower my monthly payments.
