No Closing Cost Loans

The no closing cost loan is available for most borrowers, but is specific to the type of loan program, credit score and loan amount.

"In our highly mobile, fast changing society, the time borrowers keep their mortgage is dropping. According to government statistics, the average life of a mortgage is 4.8 years. It's likely most people do not earn back their closing cost.  A no cost loan is a better solution"       --Gordan Miller

Zero Closing Cost... Really?

Yes. There are no points, origination fee or costs of any kind. Guaranteed!! 

All closing costs including appraisal, credit report, lender fees, settlement fees, title insurance, recording fees, and courier fees are paid by SunTrust Mortgage. These costs are not "rolled into" your mortgage balance. You do not increase your loan amount unless you choose to take equity out of your home.

What's the Catch? This sounds too good to be true...                        

No catch!  The rate on a no closing cost loan is slightly higher than the rate on a loan with closing costs.  However, due to the volume of business that SunTrust Mortgage originates on a monthly basis, we receive steep volume discounts.  What this means to you, is that you can typically have a no closing cost loan with us at the same rate as you can receive in the market paying closing costs.  Also, the difference in monthly payment is typically only $45-$65 per month. It would take you approximately 71 months to break even if you were to pay closing costs. Given the average life of a loan of 4.8 years, a no cost option makes the most sense 95% of the time. 

What are the benefits of a No Closing Cost Loan?

There are many benefits to a no closing cost loan including:

a. Interest rates cycle naturally in small cycles every 3-6 months and in larger cycles every 3.5-5 years. With the no cost option, we can refinance for free every time the rates drop a minimum of .125%.

b. Interest rates are a traded security and with the volatility in the market recently, economists are predicting a recession within the next 12-18 months. This will cause rates to drop even further.

c. By not paying costs, you eliminate the risk of trying to time the market perfectly. This is especially important when buying a home because there is a specific timeline and you are subject to market conditions at that time.

d. You'll see immediate savings and avoid paying thousands in closing costs. 

e. A lower interest rate, which is accompanied by thousands of dollars in points and fees is usually not as attractive as a no closing cost loan because it can often take you 8 years or longer to recover the costs.  A zero cost refinance allows you, the homeowner, to begin saving money immediately since there are no costs associated with the loan.

Will you have a mortgage 8 years from now?

If you pay closing costs it will take approximately 8 years to earn back the costs.

Here's why:

WITH CLOSING COSTS NO CLOSING COSTS LOAN AMOUNT $250,000.00 $250,000.00 Interest Rate 5.500% 5.750% Principle & Interest Payment $1,419.47 $1,458.93 Closing Costs $3,000.00 $0.00 Monthly Difference in Payment $39.46   Simple Breakeven (difference/cost) 6.34 years Tax Rate 20%   Time Value of Money 8%   Breakeven (How long to earn back costs) 8.21 years

How Does SunTrust Mortgage Get Paid?

With the no closing cost loan, we use a percentage of the commission that the bank pays us for originating the loan to pay for your closing costs.  We then use the remaining income as our payment.  Our business model is different from most banks and mortgage brokers in that we are able to make a small amount of money on multiple transactions rather than as much money as possible on only one transaction.