No Cost vs. No Cash to Close:
What’s the Difference?

Even with a No Cost loan you may need to bring money to closing.

At DNJ Gatewway Mortgage, we pay all closing costs (origination fee, appraisal, attorney, title insurance, credit report, bank fees, flood certification, recording fees, etc.) on your behalf. However, there may be some out of pocket funds required at closing depending upon a couple of factors.

Pre-Paids

First, if you have an escrow account, the money in your current escrow account does not roll over to your new mortgage. This means we must collect for the new escrow account whatever amount should be in that account at this time of year. You will receive a refund from your current lender of any funds they are holding in escrow for you. This refund usually comes about 30 days after we close.

Second, there is also one month of interest collected at closing but you don’t make a mortgage payment the first of the next month. Together the escrows and interest are called “pre-paids.”

The money brought to closing should be offset by the escrow refund and the saved mortgage payment. If funds are tight, you can consider adding to your loan balance and bringing less cash to close.

Want to Learn More? Call DNJ Gateway Mortgage Today!

Our experienced loan officers would love to help you compare No Cost and No Cash to Close options. Contact us today! With offices in Raleigh, Greenville, and Wilmington, DNJ helps homeowners and home buyers across North Carolina. We also offer mortgages in South Carolina, Virginia, Maryland, Georgia and Florida.