No Closing Costs? Really?
Let Us Explain The Rate/Cost Tradeoff
There are TWO components to a mortgage. Rate and Costs.
Think of it like a kid’s see-saw. One kid goes up, the other comes down.
The market determines the rates. You and your lender can control the closing costs.
Don’t just focus solely on rate. When you are given a “lower rate” on your loan, it’s because you’re paying more in closing costs for it.
We guide, you decide what’s best for you
The mailing and ads you’ll see from most mortgage lenders are focusing on getting the lowest rate, right? For sure, the lower the rate the lower your monthly mortgage payment will be. BUT WAIT!
That low rate is NOT necessarily the strategy that will SAVE you the MOST MONEY!
What we think YOU MUST KNOW — and we will take the time to explain — is that there’s more to the loan rate story, and we believe YOU should be the one to decide!
When it comes to mortgages, you have 2 choices:
Pick the Rate %
Pick the $ amount of closings costs
The tradeoff is straight forward: when the RATE goes DOWN… closing costs go UP.
Yet most lenders won't explain that the reverse is also true: push UP the RATE and DOWN go the closing costs!
And there are situations when a higher rate actually saves you money… scroll down to see how!
“Wait — if my rate and payments are more
how am I saving money?
That’s a fair question! Here’s an example:
You pay the closing costs the day you buy the home.
Say $4,000…
You have a slightly higher rate, so a higher payment each month. Say $42.
That’s $4,000 in closing costs ÷ $42/mo = 96 months…
It's going to take 8 YEARS of payments before you get back your $4,000!
This is an example. Market conditions change. Your payback period may be different.
Still Have Questions? Let’s Do the Numbers…
Stay with Us: It’s EASY Math!
These figures are for illustration purposes and are not intended to represent current rates. Market conditions can change at any time. Talk with one of our loan officers to see your numbers.
In the No Closing Cost scenario above, you've KEPT the $4,000 in your hands, and chosen a rate that’s a little higher (6.6% vs. 6.5%)
The INTEREST portion of your payment went up $42/month.
So $4,000 on Day 1 divided by $42 each monthly payment — means it will be 96 months before you've paid yourself back.
That’s 8 years (96 months) before you save ONE DOLLAR on having paid closing costs.
Let us do the personalized
analysis for your loan!
It’s FREE. No Obligation. No Junk Emails
Since the “No Closing Cost” loan is so great
why doesn’t every lender offer this option?
Because it takes more work to explain the value of a higher interest rate. And many other lenders don’t want to do the extra work required.
At Miller we will go through the No Cost and Cost options with you. We will spend the time needed to review other options like; the term of the loan, pros and cons of consolidating debt, or combining a first and second mortgage.
We believe that the mortgage industry has been doing things the same way for a long time. A loan with closing costs is likely what your parents did, and what your neighbors and friends did.
Our company is the Original Home of the No Closing cost loan. Gordon Miller invented this loan almost 40 years ago.
We think EVERYONE should be shown the No Cost option. To be clear, No Closing Cost works for MOST PEOPLE, MOST OF THE TIME. But that also means it’s not right for everyone in every situation.
What we do is help sort that out for you. We guide you to the loan that’s right for your situation.
This way of doing business is why we include the exclusive Lighthouse Concierge Care service.
Our goal is to be as clear and detailed as possible, so you can have confidence that we’ll always speak plainly, shoot straight, and be fully transparent with our communication and documentation.
We want to help you and your family in all your home ownership goals, and earn being your Lender for Life!
4 Most Common Questions
about a No Closing Cost Loan…
…and the Answers!
Q: Will the closing cost be added to my loan balance?
A: No. The slightly higher rate covers all the closing costs. Your loan amount does not increase.
Q: I'm going to stay in my house forever. Won't a lower rate save me more over time?
A: It's about how long you keep the mortgage, NOT how long you stay in the house. The average mortgage loan in the U.S. is kept only 3.8 years, in part because homeowners frequently refinance. Importantly, consider that as of summer of 2024 mortgage rates remain at near 20-year high levels. When rates drop you will want to refinance to the new lower rates. If you refi before you've paid yourself back...you've lost money. A No Cost loan sets you up to refi again for No Cost as the market drops AND you can refi again... and again.
Q: I've still got to bring money to closing, more than my down payment. What about that money?
A: Yes you are right. At closing you are going to bring cash above and beyond the down payment. There are non-mortgage related items to pay for like property taxes, home insurance, prepaid interest, and home inspections.
Q: The seller is offering to pay closing cost and get me a low rate.
A: This is a common incentive by sellers, but once again there is a trade off. In this case the costs and rate are added into the house price. You will pay more for the house because the seller is paying the costs for you.
Interested in the loan that sets you up to SAVE MORE
Sooner Rather Than Later?
Tap to find out if it’s right for you…