HomeVestors Knows How To Refinance A Property Through A No-Cost Loan


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For investors who are considering refinancing their loan, a no-cost loan may be the best option if they are planning to sell their property quickly.

Dallas, Texas HomeVestors is the nation’s number one home buying franchise and has helped real estate investors purchase 50,000 properties over the years. The company knows that refinancing is one way that investors can gain leverage. Through refinancing, an investor might be able to lower their interest rate and their mortgage payments. If the property has some built up equity, they may even be able to free up that equity through a cash-out refi. Either way, they have more access to available funds to spend on other promising ventures. There are usually costs associated with refinancing, which if sufficiently large, may render it pointless. An investor seeking maximum leverage may want to consider applying for a no-cost loan, where most, if not all the closing costs are eliminated.

Obviously, a mortgage loan where the investor doesn’t have to pay the appraisal fees, loan origination points, underwriting fees, and the processing fees, is beneficial. However, just like everything in life, there must be a catch. In this case, the savings the borrower enjoys by skipping closing costs are spread over the life of the loan through higher interest payments. So the no-cost loan really all boils down to a deferred payment. The borrower is excused from paying an upfront amount of capital, only to pay it back later.

So is it really worth the trouble of taking out a no-cost loan? If the subsequent interest rates to be paid on the new mortgage are low enough to justify the income that could be generated with leveraged funds, then a no-cost loan is worth it. If not, the investor may need to re-think their options. Another case where it might make sense to take out a no-cost loan is when the investor has short term plans to sell the property, perhaps to invest in a more profitable undertaking. The extra funds saved can go a long way towards paying for the new investment.

No-cost loans are becoming increasingly popular and investors who can benefit from them shouldn’t hesitate to apply for one. At this point, a word of caution must be sounded. Taking out no-cost loans might not be a very good idea when interest rates have reached rock bottom, as they are today because from that level, there is only one direction in which they can head and that is upwards. Interest rates are expected to rise again and this can negatively affect anyone who refinances with an adjustable rate plan. So, only those investors who really stand to make a substantial profit from the leverage they gain through no-cost loans are those who intend on flipping the property quickly.

About HomeVestors of America Inc.

Dallas-based HomeVestors of America, Inc. is the largest buyer of houses in the U.S., with 50,000 houses bought since 1996. HomeVestors trains and supports its independently owned and operated franchisees that specialize in buying and rehabbing residential properties.  Most commonly known as the “We Buy Ugly Houses®” company, HomeVestors strives to make a positive impact in each community.  In 2012, for the seventh consecutive year, HomeVestors was among the prestigious Franchise Business Review’s “Top 50 Franchises,” a distinction awarded to franchisors with the highest level of franchisee satisfaction.  For more information, visit www.HomeVestors.com.

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