Financing closing costs and a sellers concession?
I am a first time home buyer. I have a contract on a house for @250k with the seller also giving 5k for closing cost. I believe i will need additional money for closing costs, to help and buy down the rate among other things.(i dont want to have any out of pocket costs) I want to get a sellers concession and have the rest rolled into the mortgage, however my realestate agent seems to think that the seller wont go for it. Does anyone have any Ideas that could help us out?
The sellers should be willing to work with you as long as their net profit remains the same. If, for example, you need an additional $5k, have your agent talk to their agent about revising your offer to $255k, and now getting $10k credited at closing. For mortgage purposes the home would now have to appraise for at least $255,000 (they base the loan to value ratio off of the lesser of the sales price/appraised value). This worked for me when I bought an investment property after I had signed a contract.
December 26th, 2009 at 8:26 pm
If you already have a contract it’s highly unlikely. You may have to live with it. I wouldn’t roll that small an amount into the mortgage. It will cost too much over the life of the loan. Can you get a "gift " from a family member or friend? You may have to bite the bullet and pay out of pocket. Is the agent your buyer agent or the seller’s agent? If they are your Buyer Agent they should be able to find a solution. A seller agent won’t care. It can’t be all that much in the first place.
Good Luck
References :
An Agent
December 26th, 2009 at 8:31 pm
The sellers should be willing to work with you as long as their net profit remains the same. If, for example, you need an additional $5k, have your agent talk to their agent about revising your offer to $255k, and now getting $10k credited at closing. For mortgage purposes the home would now have to appraise for at least $255,000 (they base the loan to value ratio off of the lesser of the sales price/appraised value). This worked for me when I bought an investment property after I had signed a contract.
References :
Real Estate Investor.
December 26th, 2009 at 8:50 pm
If you are getting 100% financing, you’ll be limited to a 3% seller assist, which is $7500.
Also, note there are some restrictions as to what sellers can pay regarding closing costs. Your lender may restrict the seller from paying pre-paid expenses. Talk to your lender to verify.
References :
I’m a Realtor and a former loan officer.