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THE ZERO COST REFINANCE PROGRAM
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| What is it? |
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| Zero cost loans are mortgages offered with no points and no closing costs. The borrower pays no points, no appraisal fees, no title insurance, no underwriting fees, no attorney fees...ABSOLUTELY NO HIDDEN COSTS. Prepaid interest and tax & insurance escrows are collected. |
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| What kind of zero cost loans are offered? |
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| Virginia Commerce Bank offers various fixed rate programs, adjustable rate programs and balloons with zero closing costs. These programs vary depending upon your loan balance. Please contact us and we will be happy to give you rate quotes that may suit your needs. All of Virginia Commerce Bank's Zero Cost Mortgages have no pre-payment penalty, so you may pre-pay your loan in full or in part at any time. |
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| What are the benefits of this product? |
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| This product is an attractive alternative to the traditional refinance programs that cost thousands of dollars in points in fees. The consumer can look at the zero cost rate of each loan program and then compare those with his or her current program. Since there are no costs, the borrower simply needs to compare the interest rates. |
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| For whom is this product appropriate? |
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- Homeowners who have an adjustable rate mortgage that is due to increase. A zero cost loan enables a borrower to fix his rate without any cost, so you don't lose any equity and you have no out of pocket expense.
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- If you currently have a fixed rate or a 3/1, 5/1, or 7/1 ARM that is higher than the current zero cost rates. Because it costs nothing to refinance, it makes sense even if you lower your rate only marginally.
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- If you have been hesitant to refinance because you don't think you will be in the property for more than a few years. A zero cost refinance program allows you to lower the rate without any cost or pre-payment penalty, so any savings are immediate.
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| Conclusion |
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| Is there a catch? No. The plain fact is that the interest rate for zero cost loans are a little bit higher than those with points and closing costs. A lower interest rate which is accompanied by thousand of dollars in points and fees is usually not as attractive because it can often take five years or longer to recoup the costs in the form of a lower payment. A zero cost refinance allows a homeowner to begin saving money immediately. Since there are no costs associated with the loan, the savings begin right away. |
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