Is no closing costs during refinance just a myth?

[Kumar Gaurav]

Hello,

I just got started shopping to refinance my 30 year mortgage loan and coming across few ads that say "no closing costs" and it sounds exciting to me. I am wondering if it's just a strategy to attract more customers and there will be hidden fees?

Thanks

[Jeff Ronningen]

@Kumar Gaurav. In all likelihood the interest is slightly higher so that the present value of the payments covers the closing costs. The fact is refinancing is not free. It’s similar to buying a new car with 0% interest rate over 4 or 5 years.