US Bank - No Closing Cost Refinance & Low Cost Mortgages

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READER QUESTION

Can I get a no closing cost refinance with US Bank if I'm a customer? I want a low cost refinance mortgage loan.

Read full question
Bills.com Resident Expert
Dec 12, 2011
HIGHLIGHTS
  • Speak with your loan officer at US Bank and compare loans.
  • Make sure that a no closing cost loan really has no costs.
  • Shop around for the best refinance rate and compare different lenders that offer no closing cost or low cost refinance loans.
BILL'S ANSWER

I recommend you speak with US Bank and ask them if they would charge closing costs to refinance your home. You must keep in mind that it will cost a lender to refinance a mortgage, even though they may say "no closing costs."

I also have two valuable resources as you evaluate refinancing with US Bank. The first a a profile of US Bank Mortgage and Refinance Provider that we did. The second is a link where you can apply for free for a refinance quote: Mortgage Refinance Quote

Will Your Interest Rate be Higher?

When a lender says that there will be no closing costs, they generally give the borrower a higher interest rate. Below I will explain what a no cost mortgage refinance is.

Unfortunately, a no cost mortgage isn’t really cheaper over the long term. Instead of paying fees out-of-pocket, closing costs, or other costs at the time of the loan, the interest rate is .25 to .5 percent higher to cover the lender’s costs and any third-party fees the lenders promises you aren’t paying. The lender isn’t giving anything away for free.

No-Cost Mortgages Come in Three Flavors:

  • No points, but you pay lender fees and third-party fees
  • Zero lender fees, but you pay third-party fees
  • No cash up-front, but all the fees and costs are bundled into the loan’s interest rate

A true no-cost mortgage would have the same interest rate as other loans and no payments to the lender or third parties. Understandably, these loans are nearly impossible to find.

Is No-Cost Mortgage Refinancing Right for Me?

This type of mortgage is best for people who plan to sell or refinance in a few years. If interest rates are steadily falling, then you can move from no cost refinance to no cost refinance without spending a dime on closing costs. If you want to stay in your home and never refinance again, then the higher interest rate will cost you more over the life of the loan.

For people who plan to stay in their homes for more than five years and don’t plan to refinance again, the best bet is to save up the money to cover the closing costs and fees on your mortgage and get a lower interest rate. It doesn’t seem like a lot, but the difference between 6.25% and 6.5% can really add up. On a $100,000 loan paid over 30 years, that totals $6,000 more in interest.

If you don’t plan to sell or refinance in three-to-five years and your closing costs are less than the additional interest, more than likely they will be, then it’s worth it to pay the closing costs up front. Even factoring in your tax deduction, paying the closing costs would still save you money over the long-term. The higher your mortgage balance, the more that extra quarter point will cost you.

Where Can I Get a No-Cost Mortgage?

You can find these types of mortgages at most lenders. Bills.com can connect you to several no cost mortgage lenders. You can also find them at most of the major banks and mortgage lenders. To avoid being overcharged for your mortgage, compare their interest rates and then research each potential mortgage lender’s reviews and customer comments on consumer Web sites and at the Better Business Bureau’s Web site.

No cost mortgage refinancing is a popular way to take advantage of falling interest rates. Just be sure to refinance to a lower rate and pay the closing costs before that additional interest really starts to add up.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

Comments (15)


Avatar
Upset E.
Buffalo City, WI  |  July 27, 2011
My spouse agreed to several debts upon our divorce as long as I left the pension alone and asked for no alimony. Since it was difficult for to make payments on everything, my spouse took out a second to consolidate and make payments easier. My name is not on the loan. Doesn't both names need to be on the loan if the mortgage was against a home both of our names are on? I now wish to Transfer the 1st but my spouse is wanting the second satisfied as well.
Avatar
Bills.com
July 28, 2011
You should speak with an attorney. As far as I know, you should have had to sign something to permit a second loan on a home on which you are listed on the title.

Please report back about what a lawyer tells you on this issue, to inform me and other readers.
Avatar
Joellen V.
Nampa, ID  |  April 19, 2011
We were denied a loan, and we have perfect credit. We were told it had to do with our collateral and us having an adult daycare facility, and I do not. I do adult foster care for the DD & MR population. Is there any way for me to get back the money for the appraisal that they charged me for? THe apparaiser took several weeks for him to come out, and it seems like the bank had plenty of time before the appraiser came out to tell us that we did not qualify. I really feel it had to do withe the loan officer and I not clicking. Help???!!!??
Avatar
Bills.com
April 20, 2011
If you paid for the appraisal, you own it and have the right to bring it to another mortgage lender. Unfortunately, you do not have the right to a refund on an appraisal unless it was defective. Look at it from the appraiser's perspective. He or she took the time to look at your property, conduct research, and write the appraisal. He or she should get paid regardless of the loan closing.
Avatar
Joellen V.
Nampa, ID  |  April 20, 2011
So can I really be turned down a loan because I do adult foster care in my home for up to two people?
Avatar
Bills.com
April 20, 2011
I cannot answer your question without knowing more about your financial situation and your mortgage application. Here are two examples of how providing foster care can either help or harm a mortgage application:
  1. If you are paid by the government for taking care of, for example, your elderly parents or a disabled family member, then the applicant may be able use the income.
  2. On the other hand, if you are running a business on the premises and the people you care for pay you directly, then the mortgage underwriter will consider this an income-producing property and may use that to decline the loan.

Keep shopping. If you are declined again, then ask the loan officer why. If the answer you get is, "It's the foster care," then ask, "What exactly is it about the foster care that causes the problem?" Keep in mind, too, that different lenders can have different underwriting guidelines.

Avatar
Joellen V.
Nampa, ID  |  April 28, 2011
Something interesting has occurred. The bank has called and said that they could offer me a 15 year loan at 4 1/2 % interest. And it wouldn't be a FMac or Fmae loan, but an in house loan. He said the higher ups are the ones that want this loan. When he said that I can really believe it, because this loan officer I felt like was either prejudice or he lied to me on the 1st day that I went in there. He told me he had a 10 yr loan at 3.75% interest, and when I tried finding out what I needed to bring down to lock on that loan, he became short. And when I got down there with all the info that he needed I felt like he was very put out, and didn't want to help us. (So I really felt like this had to do with this loan officer.) Well my question is when I told him yes we would take it, he said well it might take another month, because he has to start over. I just get the impression that this man doesn't want to help me and it was because of him that I have had all these problems, and I am wondering should it really have to take another month, and should I be accepting a loan at 4 1/2 % interest, expecially when I locked with him for a loan at 3.75% interest? I'd really appreciate any help that you have to offer. Thanks
Avatar
Bills.com
April 28, 2011
The only helpful thoughts I can offer are these:
  1. If you do not like the service you are receiving, apply for a refinance elsewhere. Take a look at the Bills.com refinance calculator to see how much you may save with a refinance, and which lenders offer the lowest rates.
  2. Mortgage servicers are backed-up these days, and loans that used to close in 30 days or less now take months.

I cannot address your perception that the loan officer did not treat you with respect. Again, if you feel that way, there are many other loan officers competing for your business who would love to speak with you.

Avatar
Joellen V.
Nampa, ID  |  April 28, 2011
I would have a long time ago, but they have us where they want us, I've already paid for an appraisal and I don't want to have to pay again somewhere else.
Avatar
Bills.com
April 28, 2011
If you pay for an appraisal you own it. Ask the loan officer for a copy of your appraisal and shop elsewhere.
Avatar
Will
November 20, 2010
Do other banks offer no cost refinance loans, or just US Bank? Any advice on getting a no cost refinance mortgage?
Avatar
Bills.com
November 21, 2010
Other mortgage sellers offer no-cost refinances. This is one instance in life where shopping is the answer to your problem.
Avatar
Tim T.
November 09, 2010
Some of the bigger banks like Wells Fargo and Bank of America have their own streamlined process for NO COST Refinance, so you might want to talk to your current lender, first. Good luck! Tim Tysyachuk Wells Fargo Home Mortgage
Avatar
Jerry C.
Berlin, MD  |  May 03, 2011
a want a 0 cost loan
Avatar
Tim T.
Scott, MN  |  July 14, 2011
Maybe Wells Fargo Mortgage has a no cost or maybe a low cost mortgage.
Thanks for your feedback!

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