Closing Cost Credit
Also known as Lender Credit
Money a lender applies toward your closing costs, usually in exchange for a slightly higher interest rate.
In plain English
A lender credit reduces the cash you need at closing in exchange for accepting a higher interest rate than you'd otherwise qualify for — essentially the opposite tradeoff of buying discount points.
If cash at closing is tighter than your budget for the long-term rate, a lender credit can be a reasonable way to bridge the gap — just compare the total cost over time.
Where you'll run into it
Guides and tools on TheBuyingPath that cover closing cost credit in context.
Related terms
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