Lender Credit
A lender credit is money the lender contributes toward the borrower's closing costs, usually in exchange for a slightly higher interest rate.
What Lender Credit means
It reduces upfront cash needed at closing in trade for a higher long-term rate. The opposite of paying points, it suits buyers short on cash or planning to move soon. The tradeoff appears on the Loan Estimate.
Florida example
A buyer low on cash accepted a $4,000 lender credit on a Jacksonville purchase, raising the rate slightly but cutting the cash needed at closing.
What it is
A lender credit is money the lender gives toward your closing costs in exchange for a slightly higher rate. It lowers your cash to close.
It is the opposite of paying points.
When it helps
A lender credit suits buyers short on cash who plan to sell or refinance before long. It trades upfront savings for a higher rate.
We show the math on credits versus points. Apply now and we will find your best mix.
Verify the details for your own situation against these government and agency sources: Freddie Mac Primary Mortgage Market Survey and Federal Reserve H.15 selected rates.