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A mortgage refinance no closing cost is a loan in which all of the fees and closing costs are absorbed by the broker or loan officer. This type of loan is very popular these days with the increase in free loans given out by lenders. There are many advantages to choosing this route in completing a real estate transaction.
The broker is willing to do this type of loan for a few different reasons. The main reason is that the rebate from the lender is much larger because of the selling of a higher interest rate. This enables the broker to pocket more commission and paying the closing costs.
The borrowers are able to get a refinance mortgage interest rate which is best suited for them. The broker is able to receive a higher yield spread premium from the lender and net a higher commission after paying the fees and closing costs. On top of everything, the broker, lender, and borrower are all thankful for completing a smooth and fast real estate transaction.
An interest rate refinance loan where the fees and closing costs are paid by the broker is known as a mortgage refinance no closing cost loan. This has little risk for the borrower; however the broker may have a higher risk considering all the fees are paid by him. However, the reward is also much higher for the broker with the greater commission from the lenders.
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