Say Goodbye to No Cost Loans… If you haven't already figured this out its time to change your strategy and start educating borrowers about the benefits of paying points and their own fees and refinancing into the lowest interest rate of their lifetime. Yes MAYBE rates will be better but I would not bet on it. Why not take advantage of a big payment and rate reduction NOW. Why gamble and possibly lose the opportunity.
No Cost loans used to be the best strategy but not in today's market. The lenders are no longer offering enough YSP at competitive rates for it to make sense any more, plus as long as your borrower isn't planning on selling their home in the next 2-3 years then paying their cost makes more sense over the long run and will save them thousands of real dollars. Add to the fact that every time you put someone into an artificially high rate at no cost you risk an early pay off and risk having to pay the YSP back to the lender…..food for thought.
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