The freedom to spend less when you buy more.
So how does this whole no-closing-cost loan thing work? Here is a very basic, very simplified explanation.
Closing costs. You’ve heard of closing costs. Every loan has them. They are the fees and expenses paid to all the entities involved in processing your loan – appraisers, title companies, maybe city, county and state taxes. These costs can add up. With a typical loan, you pay for them at closing. Or they get rolled into your loan and “you’ll never feel it.” We bet you’ve heard that, too. Point is, you still pay them. Unless …
No-cost loan advantage. With a no-closing-cost (or no-cost) option, however, we pay those costs. To offset the costs, there will be a slightly higher rate. But there’s a reason no-cost options have become more popular over the last few decades.
We Americans are a mobile and adventurous society. We relocate. We refinance so we can remodel. We move to bigger homes for growing families. We buy vacation homes. No-cost loans give you the freedom to do all this more often – without paying for a new set of closing costs, over and over again.
Cost loan advantage. With every loan there is a break-even point. The longer you stay in your home (and never refinance), the traditional closing-cost loan starts to make more sense. That’s because you’ll have more time to pay those costs off.
So where is that break-even point? It depends on many factors. That’s why PrivatePlus advisors dig in with our clients about their financial situation and goals. We’ll research your options and explain them thoroughly. But be assured, it’s your decision. Whether you choose cost or no-cost is no matter to us. We just want to save you the most money possible.