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The Zero Closing Cost Comparison
Many lenders advertise zero cost loans but pay only their lender costs, leaving title fees, points and origination fees for you to pay. Other lenders roll the costs into the loan or refer to loans with costs but no points. At Interactive Financial Corporation, zero closing cost loans mean we pay all the customary closing costs for you, including title costs, survey, and title insurance. The only things not paid will be interest and escrow items (also known as "prepaids"). Potentially save thousands of dollars!
Examples of Non-Recurring Closing Costs Paid by MainStream include:
- Appraisal Fee
- Credit Report
- Survey
- Flood Certificate and Monitoring
- Title Company Closing Fees
- Lender Fees
- Title Insurance (Lenders)
- Recording Fees
HOW ZERO CLOSING COSTS SAVES YOU MONEY
With Closing Costs |
VS. |
Without Closing Costs |
| Mortgage amount: $150,000 |
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Mortgage amount: $150,000 |
| Rate: 7.125% |
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Rate: 7.50% |
| Principal & Interest: $1,010.57 |
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Principal & Interest: $1,048.82 |
| Term: 30 years |
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Term: 30 years |
| Closing costs w/title: $2,120.00 |
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Closing costs w/title: -0- |
Payment difference: $1048.82 - $1010.57 = $38.25
The difference in payment is interest and is partially deductible vs. closing costs, that are not.
What that Payment Difference Means to You:
If you account for your current tax bracket and level of deduction, and you consider investment returns on your closing costs invested elsewhere, then you would be ahead of the game at the higher rate for as long as 8.16 years.
(See calculation below!)
- If you invest $2,120 at 3%, your interest income would be $5.30 per month.
- If you write off 30% of the interest, your tax savings would be $11.47 per month in deductible interest.
- Subtracting the above two figures, this means that the $38.25 payment difference is actually only $21.48 per month.
- If you divide $2,120 by $21.48, it would take 8.16 years to break even at the lower rate.
* The tax benefit and deductibility will vary from person to person and should be discussed with your accountant for your exact benefit. If you didn't consider the tax benefit and investment results you would still have to be at the lower rate for 55.42 months before you start saving money. Savings and payment difference may vary per deal.
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Email us or call us at (877) 355-2152 for rates, free qualifications, general information, or to apply!
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