Frequently Ask Questions
“Zero Cost vs. Lower Rates & Closing Costs
Without a doubt, Zero Cost financing is the most compelling loan product we have offered since we started Solomon Financial in 1990. These two simple, but highly powerful, words immediately conjure up possibility and opportunity in the minds of our buyer prospects, and our zero cost ads cause literally hundreds of qualified prospects to call us.
Many people are under the false impression that zero cost loans cannot be done in most marketplaces, if at all. Many brokers or realtors assume that the majority of zero cost calls they will receive will be from unqualified people who really can't afford to buy. Hopefully this misconception will keep our competitors from finding out about how easy & risk-free zero cost financing is. “We are not afraid to EDUCATE our clients on THEIR best options”. A common reservation is, “Well, I'll be paying for it somehow.” Yes, you will, but not in fees/costs. In many instances there is no “break-even” point on 15-year fixed loans between standard “points and fees” loans and zero cost loans. Paying closing costs IS A GAMBLE that rates won't come down! Most of our clients rather pay nothing & refinance again at no cost if rates drop and take the guarantee. Ask one of our Consultants who will prove to you in writing the benefits of a zero cost loan with a loan cost analysis. The numbers DON'T LIE and speak for themselves.
Be a properly informed consumer! Always ask for A Good Faith Estimate from your loan officer among other important items! On our website find the publication “What Loan Officer's Don't Want You To Know.” At Solomon Financial, our consultants will inform you which is the correct loan program for YOUR exact situation at NO cost or obligation.
Are you hearing that it's a “no cost loan” but they are forgetting THREE important words: “Out of pocket?”
The beauty of the no points, no fees, & no closing costs loan is that if the rates come down, we can refinance you again and it won't cost anything to lower your rate because you don't pay closing costs.
Let us show you options where you pay the closing costs and lower your rate. Our consultants will show you the break even point to determine if it makes sense. With rates at all time record lows & all the refinancing going on, which refinance scenario makes the most sense? Well, a lot of the major lenders do not even offer a “true” No point, no fee, & no cost refinance. Ask them! That means, when we are done with your purchase loan or refinance, your loan balance will remain exactly the same. Not one penny is added to your loan balance (unless you want cash out). The APR (Annual Percentage Rate) & interest rate are exactly the same.
Facts vs. Myth about No Cost Loans
1. “I hear that interest rates change once a week.” The truth is that interest rates change AS OFTEN AS STOCK PRICES. Interest rates follow the bond market and can change as rapidly as stock prices. We have a real-time market snapshot on our site. This is a 95% indicator of what may happen to interest rates.
2. “I just refinanced at 5.5% and paid $4,000 in closing costs … so I am saving more per month by paying these costs.” Well, the truth is that it does not begin to make sense to pay points and closing costs unless you have a loan balance of $500,000 or more. (The key words here, are “Begin to make sense.”) With our no point, no fees, no closing costs program, should the rates come down, we can refinance your loan again AND it won't cost you a penny to do it the next time around. Some of our clients, have refinanced numerous times AT NO CHARGE. Had they paid points or closing costs, they would have LOST that money. It's like flushing it down the drain. We have clients that refinanced 4 times — had they paid closing costs, they would have lost over $10,000 by now.
3. “I heard that I have to put 20% down for a purchase to avoid PMI.” With the loan programs that are available today, if you have good credit scores (700 or higher), you can basically qualify for any type of financing:
- no money down
- do a 1st and a 2nd with 5% down and NO PMI
- Or put as much down payment as you want — it's up to you.
4. “I heard you have to wait 3 months before you can refinance again.” The truth is that you can refinance AT ANY TIME rates come down. (clients with us, can do it as soon as they have made their 1st mortgage payment with the new lender — WITH NO PRE-PAYMENT PENALTY– *some programs do require a longer waiting period, ask us!)
5. “I hear you should wait to Refi until interest rates drop 1% or 2%.” Wow, are we surprised when we hear this one. The truth is, anytime you can lower your rate — even an 1/8th of a percent is a good time to refinance. If you are waiting for the rates to come down lower, there is no reason to wait with our program.
6. “I heard that getting an appraisal affects my property taxes.” BIG MYTH: Doing a refi; or getting an appraisal has nothing to do with your property taxes changing because of the refinance.