What is considered a credit to the buyer in a real estate transaction?

In a real estate transaction, a credit to the buyer typically represents an amount that reduces the total amount the buyer ultimately has to pay at closing. A deposit to the lender is an amount advanced by the buyer, which gets applied to their costs, thereby acting as a form of prepaid expense that offsets what they owe.

When a buyer makes a deposit to the lender, it serves as a credit toward their closing costs or down payment, effectively lowering the total cash needed from the buyer at settlement. This is an advantageous aspect for buyers because it directly influences their financial obligations positively by reducing the amounts due at the closing table.

Other options do not represent credits to the buyer in the same way. A debit to the seller would typically indicate an expense or cost incurred by the seller, while a debit to the buyer indicates an expense that the buyer bears. A credit to the seller would indicate an amount benefiting the seller, not the buyer. Therefore, the deposit to the lender correctly identifies a scenario where the buyer receives a financial benefit, making it a credit for them in the context of the transaction.