question regarding closing costs

I saw lots of advertising out there about mortgage companies generating loans with no closing costs. My question is what’s the catch? Do they have higher rates, or what do they do to offset their expenses associated with this “no closing costs/low closing costs” offer? Any input is greatly appreciated.

yes, you pay a higher rate. They get a higher commission (called yield spread premium) that they use to cover the costing cost.

Sorry, no free lunch.