banks refinance without closing costs: what to know now

How 'no-cost' really works

When a bank advertises no closing costs, it usually means the lender covers third-party fees in exchange for a slightly higher rate or uses credits funded by the rate. Compare the lifetime expense, not the day-one check.

When it can make sense

A no-cost refi can be smart if you plan to sell or refinance again within a few years, need to conserve cash, or are swapping from an adjustable to a predictable fixed rate. Just confirm the math and your time horizon.

• APR vs. rate: APR reflects financed costs; favor the lower APR for your expected hold period.
• Lender credits: Ask what credits cover and whether any fees remain.
• Prepayment traps: Watch for early payoff penalties or clawbacks.
• Points: Avoid paying points on a no-cost deal.

Steps to compare offers

1. Get Loan Estimates from at least three lenders.
2. Compare payment, APR, and total interest for your hold period.
3. Confirm lock terms, credit rules, and timeline in writing.

Strong credit, solid equity, and flexible timing can yield better credits and lower rates.