Closing Costs
What are lender credits and how do they lower my closing costs?
Context
Some borrowers need to lower cash to close even if it means a slightly higher rate.
The short answer
Lender credits are money the lender applies toward your closing costs in exchange for accepting a slightly higher interest rate. They reduce your cash to close today but raise your monthly payment over time.
Things to keep in mind
They can be smart if you are short on cash or plan to move or refinance soon — the right trade-off depends on your timeline.
Next step
DMF compares credit-vs-rate trade-offs across wholesale lenders — ask us to model both scenarios for your file.
Have a question about your own situation?
DMF serves Minnesota homebuyers and homeowners by shopping your purchase or refinance file across multiple wholesale lenders — not a single bank's product menu.
Davis Monroe Financial, LLC is a mortgage broker, not a lender. We do not make credit decisions or fund loans. Rate locks are issued by the lender; we submit and manage lock requests on your behalf. All loans are subject to credit approval. Rates and terms are subject to change without notice.