My loan rate is 3.75% with a .500% credit towards closing cost. Will the credit cover my closing cost? How does this work.

A .500 lender credit amounts to 1/2 of a percent of your total loan amount. So, for example if your loan amount is $100,000, then the credit would be $500.That may cover the appraisal or something in that range, it will not come close to covering all the closing costs.

As Lorne explained.. .500% credit is $500 per every $100K in sale price.. so it's unlikely it will be enough to cover all your 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

3% will usually cover all closing costs on any loan.

Looks like you have some good answers to your questions! If you would still like another comparison (rate/costs) from a lender here in California contact me viamy profile. By the way...if you have a $500,000 loan then .500% might cover your traditional closing costs (not counting tax/insurance impounds and some interest due.