Opinions about No Cost No Closing Refinancing

[happymomma]

I was wondering if anyone looked into the whole no cost no closing refinancing. I just spoke with a mortgage broker and he indicated to me that a good option would be to do a no cost no closing refinancing. Currently my interest rate is 5.625% and he indicated that I could get it down to 5.15% approximately with no closing site. For us to refinance I would be saving about $100 a month. The other thing is that this loan that we have right now is really only a couple of months old. So getting another fixed 30 year mortgage really doesn't change our timing. I would love to get an idea from others if they have heard about this. I do know that the interest rate is slightly higher with the no cost no closing. But it would appear that if I paid for the closing, it would take approximately 5 years to recoup the cost.

Thanks.

[lablover]

We did two several years ago. The first time from a 6.875% 5/1 ARM that was about 2/3 years old into into a 6% 30 year fixed rate loan, and the second time, a few months later, to a 5.25% 30 year fixed rate loan. Since your loan is so new, you wouldn't be extending the life of your loan by a material amount so I can't think of any drawbacks. You are essentially paying for the closing costs with a slightly higher interest rate, but you don't have to worry about recouping your costs if you end up moving in a year or two.