No Closing Cost Loans
No Out Of Pocket Expenses
"No Out Of Pocket Expenses" means when we refinance you we add the loan costs into the loan. For example, if you owe 200k on the loan now, once we refinance you and add the costs you'd then owe 203k (or whatever the closing costs were). You would save money on your monthly payment and come to closing with $0.
$0 Closing Costs
"$0 Closing Costs" means when we refinance you we add the loan costs into the rate. For example, if you owe 200k on the loan now, once we refinance you, the costs are $0 and so your new loan amount would still be 200k. The interest rate on "$0 Closing Cost" loans is typically 0.25% to 0.375% higher than a rate on a "No Out Of Pocket Expenses" loan.
My recommendation is to think about how long you will hold the loan. If you plan to keep it for the full 30 years than it may be better to go with the lower rate and include the costs into the loan (or pay out of pocket). If you plan to move in 6 years or even refinance again in 6 years than it may make more sense to go with the $0 Closing Cost Option.