Glossary of Terms > N > NO-COST LOAN
Many lenders offer loans that you can obtain at "no cost." Better read the fine print, because most of the time it really is too good to be true. You should inquire whether this means there are no "lender"costs" associated with the loan, or if it also covers the other costs you would normally have -- title insurance, escrow fees, appraisal, etc. These fees and costs may be associated with buying a home or obtaining a loan, but are not charged directly by the lender. Keep in mind that, like a "no-point" loan, the interest rate will be higher than a loan that has costs associated with it. Almost all lenders offer loans at "no points." You will find the APR on a "no points" loan is approximately 0.25 percent higher than on a loan where you pay one point.
