Is A No-Fee Mortgage Right For You?
There are a lot of upfront costs involved in buying a home. And in an effort to cut those costs and save money on their purchase, some Buyers go with a no-fee mortgage.
A no-fee mortgage is just what it sounds like; it is a mortgage that does not charge borrowers any lender fees, closing costs, or other upfront fees. But the question is—is a no-fee mortgage right for you?
A recent article on realtor.com explored the pros and cons of no-fee mortgages. The biggest pro of a no-fee mortgage is the reduction in upfront costs. For borrowers who might not have as much in savings, a no-fee mortgage can help keep costs to a minimum at the time of purchase. But you can expect to pay a higher interest rate on a no-fee mortgage—so even though you won’t be paying for those fees upfront, you will most likely be paying significantly more in additional interest over the course of the loan.
Bottom line? Only you can determine whether a no-fee mortgage is right for you.
If you don’t have the cash to pay upfront and don’t mind paying more over the course of your loan, it could be a lending option worth exploring.
If you want to save money long-term, it makes more sense to pay the upfront costs and secure a mortgage at a lower interest rate.
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