Which loan option allows you to obtain a mortgage at no cost?

The term "no cost loan" specifically refers to a mortgage arrangement where the borrower does not pay upfront closing costs. Instead, these costs may be rolled into the loan amount or compensated through a higher interest rate. This structure allows borrowers to finance their home without needing to bring cash to closing, making it an attractive option for those who may have limited funds available at the time of purchase.

In contrast, the other types of loans listed do not inherently eliminate closing costs. A rate and term loan primarily involves changes to the interest rate or loan term, but it does not mean there are no closing costs involved. Fixed-rate loans and adjustable-rate loans are two types of interest rate options but typically don't address the cost upfront versus financed options. Thus, while they can be beneficial in terms of interest rates and stability, they do not specifically provide a mechanism for obtaining a mortgage at no cost.

In summary, a no cost loan is designed specifically to minimize or eliminate upfront cash obligations for the borrower at closing, making it the correct choice in this scenario.