If you are considering refinancing your current mortgage, being able to do so without having to pay astronomical closing costs may seem like an attractive, as well as affordable option, however, before deciding to take advantage of a refinancing opportunity that does not require closing costs, there are a few things you should be aware of: • The fees can be included in the loan amount. If you simply do not have the cash available to pay for the closing costs, these fees can be written in and included with the original loan amount. This does have an advantage, since the interest you will have to pay on the included fees is likely to be less than if you were to pay a higher interest rate for the life of the loan if the lender paid the closing costs for you. • Consider the high interest rates. If you choose to have the lender pay your closing costs, be prepared to pay a higher interest rate over the life of the loan than if you had paid the closing costs in a more traditional manner. The lender will normally charge an interest rate that is at least 1% higher when they pay the closing costs. If you are only securing the loan for a short period of time, this could be economically worthwhile, however, if you plan on paying the loan back over many years, the extra interest will add up and not save you any money in the long run. • Talk to your current lender first. Before contacting other financial institutions for your refinancing needs, talk to the current lender that services your mortgage. If you have been a faithful customer and made on-time payments, your current lender is sometimes able to waive upfront fees, and may be able to offer you a much lower interest rate than a lending company that you have no prior business relationship with. No matter what course of action you decide to take for the refinancing of your mortgage, realize that there are both advantages and disadvantages to refinancing with no closing costs.