No Closing Cost Loans

A No Cost loan can be the smarter, faster way to save thousands. Raising your interest rate by as little as .25% can save you thousands of dollars over the life of your loan…starting the very first month after you close!  While these mortgages may be an excellent choice for some borrowers, they are not for everyone. Our loan officers will help you evaluate the No Cost options so you can make an educated decision regarding your mortgage.

With DNJ Gateway Bank Mortgage’s No Cost loan program, there are no points, no origination fees, and no loan-related costs of any kind, guaranteed.

All closing costs, including appraisal, credit report, lender fees, settlement fees, title insurance, recording fees, courier fees, and any others, are paid by DNJ Gateway Bank Mortgage. These costs are not “rolled into” your loan balance. You will not be surprised by hidden costs at closing!

We Pay These Mortgage Fees So You Don’t Have To:

  • Origination fee
  • Appraisal fee
  • Application fee
  • Attorney fee
  • Title insurance fee
  • Recording fee

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The Break-Even Analysis: The Key to Evaluating the No Cost Loan

Note: While savings and break-even are typical, these may not be market rates.

A No Cost loan can result in bigger savings and better results for you, but remember that each borrower’s needs and situation is unique. A No Cost loan may not be your best mortgage solution. The No Cost loan program is not available to all borrowers or on all loan programs.You should review your situation with one of our experienced loan officers to evaluate your options.

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    What’s the Catch?

    No catch! There is a trade-off which you need to make sure is to your advantage. The rate on a No Closing Cost loan is slightly higher than the rate on other loans. Because the loan has a higher interest rate, the lender pays us a commission. We use this commission (called the yield spread) to pay all the loan-related costs.

    Since we are paying all the costs we are motivated to keep loan costs as low as possible and operate very efficiently, which in turn allows us to offer you lower rates.

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    How do I Know if a No Cost Mortgage is Right for Me?

    We’ve done the analysis and calculations and we think No Cost loans are right for most people in most situations. Do you know anyone who has paid off a 30 year mortgage? Consider how frequently you or your neighbors move. The national data shows that the average age of a loan at the time of refinance is 3.2 years. If you pay loan-related costs with a normal mortgage and then refinance or payoff your loan in less than 6 years, you will be throwing money away.

    To decide whether a No Cost loan is right for you, the first and most important question is what do your long term plans look like? Will you be in this home another 5 – 6 years? If rates drop will you have this mortgage for another 5 – 6 years?

    The truth is that interest rates change as often as stock prices. Interest rates follow the bond market and can change just as rapidly. In the last year the mortgage market has changed more than a full point. Our customers who did No Cost loans at the beginning of the year were refinancing to lower rates by the fall.

    Some of our clients have refinanced numerous times at no charge. Had they paid points or closing costs, they would have lost that money because rates dropped. Paying these costs can be like flushing money down the drain. We have clients that refinanced 5 times — had they paid closing costs, they would have lost over $19,500 by now.

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    Our True No Cost Loan vs. Their Hidden Costs

    We’ve all heard the old maxim, “If it’s too good to be true, It’s not true.” We understand that you might be skeptical when we say that there are no costs or fees with our No Closing Costs loan. Our position is clear: There will be no closing costs and nothing is added to your loan balance.

    There are many companies who are not as clear about how their loan programs work. One way the picture can become unclear is when a $0 to close loan offer is made. However, there is a big difference between No Closing Costs and No Cash at Closing.

    It may sound great to bring $0 to closing but you need to be advised that you are increasing your loan balance. Other companies may be adding thousands of dollars in costs and fees to the balance of your loan and then telling you “you won’t write a check a closing.”

    There are Easy Ways to Recognize a True No Closing Costs Loan:

    1. Review the Good Faith Estimate. There will be a negative number (credit) on line 802 that should equal all the other costs on the Good Faith Estimate.
    2. Your new loan amount will be identical (or close) to the current balance of your loan.
    3. Your loan officer will show you a Transaction Summary clearly displaying that the costs are paid by the mortgage company.

The Closing Costs We Pay (& The Fees We Don’t Pay)

A loan with DNJ Gateway Mortgage will have no hidden costs or fees. We understand that you may only do 2 or 3 mortgage loan transactions in your lifetime, so we’re committed to helping you understand all aspects of your loan transaction. Our experienced loan officers will answer your questions and review your options with you. Below we show you in detail the costs we pay and those other charges that we do not pay.

Three Categories of Closing Fees:

  • Mortgage loan closing costs
  • Pre-paid items
  • Third party services paid at closing

Read below to learn more about each category:

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    Mortgage Loan Closing Costs (As They Would Be With a No Cost Loan)

    HUD# Closing Costs Amount
    801 Loan origination fee $0.00
    802 Loan discount fee $0.00
    803 Appraisal fee $0.00
    804 Credit report $0.00
    808 Lender processing fee $0.00
    806 Tax service $0.00
    809 Application fee $0.00
    807 Flood report fee $0.00
    810 Wire transfer $0.00
    1102 Closing fee $0.00
    1103 Lender’s title policy $0.00
    1109 Document preparation fee $0.00
    1107 Attorney’s fee $0.00
    1201 Recording fees $0.00
    1202 City/county tax stamps $0.00
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    Pre-Paid Items

    Pre-paid items are the interest from the day you start your new loan until the end of the month, plus the money that is put into your escrow account.

    An escrow account is the money held by the mortgage company to pay your yearly property taxes and insurance premiums. Your monthly payment includes an amount which is placed in this fund. This amount is adjusted on a regular basis as your taxes and insurance increase.

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    Third Party Services Paid at Closing

    A refinance will rarely have third party fees. Third party service fees often include but are not limited to:

    > Home inspection
    > Termite inspection
    > Radon inspection
    > HVAC inspection
    > Survey
    > Well or septic inspection
    > HOA transfer and initiation
    > First time home buyer counseling
    > Mortgage credit certificate

Ready to purchase or refinance with a No Cost loan?

We’ve earned the trust of homeowners across the Southeast and Mid-Atlantic – Let us earn yours!

DNJ offers mortgages in Delaware, Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee, Texas, and Virginia. Call today!