Wealth-Coaching

No cost home loans are new and very popular in the lending industry. It’s possible to take advantage of this trend in real estate investing. This strategy can make sense to real estate investors even who are only going to own the home a few months.

The advantage of using a no cost home loan is that you save the cost of getting the loan. I mean the thousands of dollars in closing costs. You won’t have to pay for an appraisal, points, document fees, origination fees, etc. up front. Instead, you’ll probably get a higher interest rate.

If you are going to keep the loan a short time, then turn around and sell a home, it’s often better to pay the interest than all of the fees. Just be sure there are no prepayment penalties on the loan.

When you choose a no cost loan, you are basically financing the closing costs. You may pay a higher interest rate but if you plan to sell the property after a few months, you can still come out ahead.

Be sure to shop around for the best rates and terms by getting quotes from several lenders and brokers. The lender or brokers fee will be covered by the rate. Tell the lender or broker your best rate and see if they will match or beat it. Remember that the rates are negotiable, so always ask!