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My lender has offered .450% credit towards closing cost. What does this mean?

by penny889 from , California. Mar 29th 2016 Reply


Larry Gray (lgray_312_247)
#562 ranked lender in California - 1,127 contributions

Generally, each lender has their pricing per each eight of percent in rate that theyare looking at when planning to lock your loan. You can provide exactly what they will give you back towards covering your closing costs, when they give you a particular rate that allows them to do so. If PAR rate (closest to 0 credit back to you and no additional points charged) is 3.75% then you might get .450% credit back towards closing costs for 3.875% or 4.0%. Any other questions please contact me via my Profile!

Mar 29th 2016
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Larry Gray (lgray_312_247)
#562 ranked lender in California - 1,127 contributions

Please note my examples of rates were not intended to reflect on actual rates provided by any lender including us. We tend to be very low in our rates offered.

Mar 29th 2016
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Lorne Harvey (lorneharvey)
#81 ranked lender in Washington - 418 contributions

It just means you are paying for this credit in the rate you have selected. Most likely at the next one eighth of a percent reduction in the rate would come at a cost to you. Hope that makes sense.

Mar 29th 2016
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William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,917 contributions

Take your sale price and multiply it by .450.. that's the amount your lender is giving you as a cash credit to offset (pay) towards your closing costs.. Example: Sale price is $300,000 X .450%= $1,350. If your total closing costs are say $6,350, and he is giving you $1,350, then you only need $5000 for closing costs. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Mar 30th 2016
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Larry Gray (lgray_312_247)
#562 ranked lender in California - 1,127 contributions

William Acre offered more clarity on what you multiply by .450% to determine the dollar amount of the credit you receive towards covering your closing costs. That .450% should be multiplied by the total loan amount and not the sales price.When a realtor gives you .450% credit back then that is towards the purchase price.

Mar 30th 2016
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