– No. Most mortgage companies set the backend yield on their rates so high that there is not enough credit available from the rate to offer a no closing costs mortgage. For example, the average closing costs and pre-paids associated with buying a home is about 3% of the purchase price. Since the rates typically yield no more than 5% on the backend of the loan there is not enough credit available.
A true "No Mortgage Closing Cost" fits into that saying. Stop and think about this, every business has cost involved to do business. If they do not cover these costs in the normal course of business, they would not be able to keep their doors open.
Bad Credit Loan Mortgage Shop Bad Credit Mortgage Loans from Trusted Lenders – In some cases, mortgage loans for bad credit could have a balloon payment or a prepayment penalty. The prepayment penalty is a fee for paying off the loan before the end of the loan term. This could be incurred if you sell the home or you refinance.
What FHA Closing Costs Can the Seller Pay? – Mortgage.info – · You can also ask the lender for help or get a gift from relatives, your employer, or a charitable organization. No closing cost loan – The lender can give you a no-closing cost loan. In exchange for no closing costs, you’d pay a higher interest rate. It is usually 0.25% to 0.5% more than the basic interest rate.