Part 2: The 'No Cost' Refinance Myth, Explained

Part 2: The "No Cost" Refinance Myth, Explained

Alright, VA borrowers, here’s where the truth comes out!

So, a refinance is essentially just like any other mortgage loan. You’ll still have all the usual suspects:

Title insurance
Homeowners insurance
Property taxes
And yes, if you’re VA, a funding fee (though it’s reduced to 0.5% unless you’re exempt).
Plus, there will be some smaller fees we call “ankle biters.” 🦶💸
Here’s where the "No Cost" myth comes in. Some lenders will roll these closing costs into the loan balance, so it doesn’t feel like you're paying out of pocket. And technically, they're right, but that lump sum of closing costs still increases your loan balance. 📈

If you’re being pushed to refinance to shave off a mere quarter or half percent on your interest rate, but you're adding $6k-$8k in closing costs to your loan... is it really worth it? 🤔 You might be mitigating the positive impact of that lower rate.

You NEED someone you trust to break down those numbers and help you decide if a refi is the right move for you. Don’t get swayed by flashy terms like "no cost"—know the facts. 🧐

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