Quick answers
Open a question. Read the answer right here.
What if you use the credit to lower the rate?
Ask for a third comparison using seller funds toward discount points. Points are an upfront cost for a lower interest rate. One point is 1% of the loan amount; it does not mean a one-percentage-point rate reduction. The cost of a particular rate depends on current lender pricing.
CFPB: how discount points and lender credits work (new tab)
The same dollars cannot pay ordinary closing costs and buy points twice. If part of that $15,000 pays points, ask who covers the remaining closing expenses. Request the full payment, APR, cash to close and point cost for each option on the same day. Compare costs over the time you realistically expect to keep the loan, including a shorter stay. A future refinance is not guaranteed.
A seller credit and a price reduction can both help a buyer, but they solve different problems. A lower price reduces what you pay for the home. A credit can help with eligible closing costs or the cost of buying a lower mortgage rate. The useful question is: where would that help make the biggest difference for you?
Start with the cash you want to keep
Before choosing, set a comfortable monthly housing budget and decide how much savings you want left after closing. Moving, repairs and ordinary surprises still need room. Then ask your agent and loan officer to compare the same property and loan program with each concession.
What a $15,000 concession changes
Here is a simple planning example, not a property listing or loan offer. Assume a $750,000 home, a buyer choosing 20% down, and $15,000 of eligible closing costs. Hold those costs constant to show the difference. The appraisal supports the price, the lender permits the credit, and there are no deposits, other credits or adjustments in this example.
| Choice | Price | Down payment | Base loan | Buyer cash |
|---|---|---|---|---|
| No concession | $750,000 | $150,000 | $600,000 | $165,000 |
| $15,000 price reduction | $735,000 | $147,000 | $588,000 | $162,000 |
| $15,000 closing-cost credit | $750,000 | $150,000 | $600,000 | $150,000 |
Buyer cash here means the down payment plus the assumed closing costs, minus the credit. It is not a Loan Estimate. Actual costs and prorations can change with the price and closing date.
In this example, the price reduction cuts the loan by $12,000 and reduces upfront cash by $3,000. Using the credit for closing costs keeps $15,000 more in the buyer's pocket at closing than the no-concession example, but leaves the larger loan. Neither result by itself tells us which choice fits your plans.
What if you use the credit to lower the rate?
Ask for a third comparison using seller funds toward discount points. Points are an upfront cost for a lower interest rate. One point is 1% of the loan amount; it does not mean a one-percentage-point rate reduction. The cost of a particular rate depends on current lender pricing.
CFPB: how discount points and lender credits work (new tab)
The same dollars cannot pay ordinary closing costs and buy points twice. If part of that $15,000 pays points, ask who covers the remaining closing expenses. Request the full payment, APR, cash to close and point cost for each option on the same day. Compare costs over the time you realistically expect to keep the loan, including a shorter stay. A future refinance is not guaranteed.
Make sure the negotiated credit is usable
Seller contributions have program-specific limits and must fit eligible costs. For Fannie Mae loans, they cannot replace the required down payment or reserves. A credit larger than the allowable costs is not automatically extra cash for the buyer. Have the lender check the allocation before the contract is finalized.
Fannie Mae: interested party contribution rules (new tab)
Three numbers to bring to the conversation
Bring your comfortable total monthly payment, the cash you can use for closing, and the savings you want left afterward. I can help you and your agent compare those priorities against the actual loan options. The goal is a concession that helps your purchase work, not simply the lowest rate on a page.
Educational information and hypothetical planning examples, not a rate quote, Loan Estimate, approval or commitment to lend. Actual terms require a current review of the borrower, property and loan.
Sources and further reading
Sources checked September 28, 2026. Program requirements and individual eligibility can change.