When a person is borrowing money for a home mortgage they will have some control over the amount of money they need to put out at closing. Putting out the minimum amount may some long term consequences. A borrower can combine the interest rate and the points they are getting from the lender. Points are the charges paid upfront to the lender and are other rebated to the borrower. These rebates can be used to pay the closing costs.
The rebate mortgage has higher interest fees but it will help cover the amount needed at the closing. Borrowers may do better if they cover these points and they will have lower interest rates. This does mean they need to put out more cash upfront. If a borrower is going to save on the upfront costs they need to choose from a no-cost mortgage or a no-charge mortgage. This is an …