There are two ways to finance a home with no closing costs. A mortgage company may waive the fee, or the buyer will pay more in interest payments to cover the cost of a loan with no closing costs, according to Bankrate.Continue Reading
Closing costs are applied to cover the services for title search and insurance premiums, real estate appraisal and loan origination.
To eliminate those costs, which can add up to more than several thousand dollars by Bankrate's estimation, buyers are looking for mortgage loans without those added fees.
Finding a mortgage lender who will finance a home without charging closing costs won't be easy. Buyers will have to shop around. The alternative is to accept higher finance fees that will cover the cost by raising the interest rate on the loan.
Paying more in interest to offset the closing costs pays off in the buyer doesn't plan to live in the house more than 5 years, according to LendingTree. After 5 years, the interest adds up to more than the closing costs and doesn't pay off. The higher interest costs more than the closing cost fees up front whether buying the home or going for refinancing an existing loan. The same rules apply.Learn more about Financial Planning