No Fee Financing

Use our No Fee Financing program and let us pay the closing costs.

Purchase or Refinance

no fee financing

By offering you a slightly higher interest rate; lenders estimate the loan will create greater profit over time. In exchange, they provide a lender credit, that you can apply to pay typical closing costs, even pre-paid items.

The amount of the lender credit depends upon the loan size and the interest rate.

It is a somewhat of a simple math equation to determine your breakeven point.

Let me help you figure it out.

NO FEE FINANCING

  • No Origination Charge
  • No Loan Discount
  • No Appraisal Fee
  • No Credit Report Fee
  • No Underwriting Fee
  • No Processing Fee
  • No Flood Certification Fee
  • No Settlement or Closing Fee
  • No Title Insurance Fee
  • No Recording Fee

These you will pay:

  • Per Diem Interest
  • Hazard Insurance Reserve
  • Tax Reserve

The actual cost of each item will be disclosed on your Settlement Statement (HUD-1). There will be a “credit for the specific rate chosen” to pay the fees.

Maximum Leverage Using Conventional Financing. – Let the lender pay for everything!

Problem: Buyer has 5% down, but a limited amount of cash to pay for the other expenses of buying a home.
Solution: Have the lender pay all the fees and the pre-paid items. While guidelines require that the borrower on a conventional loan to invest the down payment, guidelines also allow anyone in a transaction to pay a buyers fees. The lender is the best one. By a borrower agreeing to pay a somewhat higher interest rate, the lender will actually pay any or all of the fees and cash flows involved in a transaction.

Below is an example of a transaction I am preparing for a new customer on November 25th 2011.
Box 5 shows the fees charged by the Appraiser, Lender and Title.
Box 6 is an estimate of the pre-paid items for Hazard Insurance, Taxes and Interest.
The total of box 4 and box 6 equals the Credit Premium from the lender in box 5.
A summary of the transaction can be seen in box 3.
Note that the cash to close shown in box 3 is equal to the Down Payment shown in box 1.
In order to get a full Credit Premium from the lender, the rate that is required is in summary box 1.
That creates an estimate payment as shown in box 2.

No Fee Financing

Click the image to enlarge

Here is a transaction using traditional financing with the borrower paying the closing costs.
Note that box 5 has no value. Note the interest rate in box 1 is lower. Compare now the payments of this option with the payment in the Maximum Leverage option above.

click the image to enlarge

Now, divide the savings of money invested by the cost of the higher payment to get the number of months before cash flow break even occurs.

Difference equals $165.56 more per month for the higher interest Rate


Equation:
Savings in Costs / Monthly Payment Difference = Months to Cash Flow Break Even Point
$10,000 Savings in Costs / $165 Monthly Payment Difference = 60 Months to Cash Flow Break Even Point
In this case, the Maximum Leverage transaction has the lowest Cash Flow Investment for 5 years.