Buying a home, especially for the first time, can be a daunting experience. There are endless credit checks, bank checks, employment checks, appraisals and more paperwork than seems to really necessary.

Adding to the angst associated with buying a home is the endless list of fees that are added to the cost of the mortgage. In addition to the interest rate for the loan itself, lenders add a host of items to the closing costs, including appraisal fees, loan origination fees, credit report fees, document preparation fees, postage fees and all manner of other items that are often not even mentioned by the lender until closing time.

The borrower often ends up suffering from “sticker shock” at closing time, as the costs associated with closing on the loan are often substantially higher than expected.

Now you may think you can avoid these charges by applying for so-called "no fee mortgages" or "no closing cost loans".

These loans are just a sales technique. The boom in the national real estate market has simply increased competition among lenders and dropping the itemized fees from first mortgages is the latest attempt to stay ahead of the competition.

Don't be fooled, the fees - some of which are nothing more than added-in profit - will still exist. It just isn’t possible to obtain a mortgage without a credit check or an appraisal of the property. But more importantly, the string attached to these "no fee mortgage" or "no closing cost loans" are a slightly higher interest rate than the standard mortgage. ( See our closing cost calculator to estimate the diffent loan type costs )

The fees are simply rolled into the total price, and the borrower has a much simpler set of paperwork at closing. Lenders pretend that by streamlining the process, overall costs can be lowered, and the savings can be passed on to the customer - but you are not really saving money with these no closing cost loans?

The name “hidden fee loan” would probably be more accurate. Still, the process is simpler with a “no fee” mortgage, and there is definitely less “sticker shock” at closing time. But in the long run the higher interest will cost you many times more than the fees would have.

Your best solution is to learn how to reduce the closing costs AND get the lowest interest possible!

Our guide "Closing Costs Insider Secrets" can help do just that. Our guide is so effective that we'll even guarantee that you will save money. If you don't save at least $200 by applying the lessons in our guide we will refund your purchase 100%.

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