Question:

Is it better to take the higher mortgage rates no closing costs option?

Answer:

The no closing costs option for a mortgage will add up to some .500% points (usually just quarter of a point) to your interest rate, not more. It will save you paying up to several thousand dollars cash now, and in return you can expect usually up to $50 more on a monthly payment. The break even will be reached in several years at which point you may consider selling or refinancing.

In the long run the no closing costs first or second mortgage comes out costlier, but may be perfect if you do not plan to stay more than 5 years on the property.

However, what is acceptable to one may not be acceptable to another buyer. You will have to decide for yourself, as well as consult with your broker or lender, which is the best way in your particular situation.

Recommended helpful present and future homeowners links:
Why: Refinance to a fixed rate loan while mortgage rates are still low.
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Why: Because FHA loans are insured by the US Federal Government they have very competitive interest rates and are easier to qualify.
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Why: Find your next home and save money.
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Common misspellings: mortage and morgage