Which item on the closing statement increases the buyer's cash inflow (credit)?

• A. New loan
• B. Mortgage payoff
• C. Interest on assumed mortgage
• D. Credit for seller costs

Answer: (A)

The key idea is that credits on a closing statement are funds coming into the buyer or reducing the cash the buyer must bring to closing. A new loan is a direct source of funds for the buyer: the lender’s proceeds are added to the transaction and appear as a credit to the buyer, lowering the amount the buyer needs to bring to closing and effectively increasing the buyer’s available cash for the deal.

Mortgaging off an existing loan uses cash, so it shows as a debit rather than a credit. Interest on an assumed mortgage represents a cost the buyer owes, not extra cash received, so it’s another debit. A seller credit can help the buyer with costs, but the most straightforward and typical example of increasing the buyer’s immediate cash inflow at closing is the new loan proceeds.