Zero Closing Cost Mortgage
A zero closing cost mortgage is a type of mortgage where the lender covers the closing costs associated with the loan, rather than the borrower. Closing costs are the fees and expenses associated with obtaining a mortgage, such as title insurance, appraisal fees, and loan origination fees. Zero closing cost mortgages are advantageous if you may move before the full term of the mortgage loan (for example, 30 years for a standard 30-year mortgage) or if you want additional flexibility to refinance in the future since there are less sunk costs involved with the initial mortgage.Since not all closing costs are reflected in the lender's APR (a slightly more comprehensive rate that includes certain fees into the rate), the APR still does not reflect the true savings of a zero closing cost lender. A true zero closing cost lender will have more fees waived than just lender fees, so it is important to get a comprehensive estimate and compare other fees that are involved in closing.