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Closing Cost Credits

Please remember that Closing Cost Credits (on a purchase contract) can be for BOTH Nonrecurring and Recurring Closing Costs. We frequently have large credits on contracts of $10,000 or more that are written as follows: “Seller to credit $10,000 for NRCCs”.

This is bad b/c purchases getting financed with “no points” loans typically have nonrecurring closing costs (NRCCs) of under $6,000. And this is not enough to use up the entire closing cost credit of $10,000; the unused credit just goes back to the seller.

We then either have to charge extra fees to use up the entire credit (and reimburse those fees to the buyer after close), or we have to amend the contract to state: “Seller to credit $10,000 for Closing Costs” (both recurring and nonrecurring).

So again, there is no reason to specify “NRCCs” anymore. Lenders allow credits for almost any type of closing cost.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167