What are negative points?
Negative points refers to a lender contribution that can be used to offset your closing costs. It is reflected on the Good Faith Estimate as a dollar amount next to “Lender Contribution” and negative points and a dollar amount next to “Points” under the Loan Summary. This amount appears as a credit to your closing costs on the HUD-1 Settlement Statement you will receive at closing. For example, on a $100,000 loan amount with -1.000% points, no points would be paid by you and you would receive a $1,000 credit toward closing costs. The lender contribution cannot be used toward the down payment in a purchase transaction or toward funds needed to establish an escrow account for the payment of taxes and insurance.
