What is mortgage rebate?
Answer:Mortgage rebate is cash amount paid to the homebuyer for buying a house under specific conditions.
For example, the amount can be Fixed Amount Cash Mortgage Rebate - $2000, $4000, etc. Or, it could be negative points paid in exchange for the buyer to accept higher rate. Or, mortgage rebate can be in the form of closing costs credit.
Negative points or rebates are the opposite of positive points. With positive points, the borrower is buying down the rate with, say, 1 point for .25% down. Mortgage rebates work much the same way - you could get paid 1 point of the loan amount for taking a .25% interest rate increase. One point equals 1% of the mortgage loan amount. Also, different rate/point combinations are advertised differently with different lenders.
Mortgage rebate is not a common practice throughout the US. For example, some states forbid some forms of mortgage rebate; some apply a full ban.
Mississippi, Oklahoma, Rhode Island are some of the states that disallow mortgage rebate usage. Oregon, South Dakota and Tennessee are some of the states that apply partial restrictions to mortgage rebates.
Florida is an example of state where all forms of mortgage rebate practices are still allowed.
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Common misspellings: mortage and morgage