Financing in 08873>Question Details

Johnevan84, Home Buyer in 08054

Can Seller's assist be used for escrowed taxes at closing?

Asked by Johnevan84, 08054 Sun Jul 10, 2011

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Shane Milne’s answer
Q: Can Seller's assist be used for escrowed taxes at closing?
A: Yes, when you are using mortgage financing, the seller's closing cost credit can be used towards anything due from you at closing (except for if you are paying off personal debt). It typically is applied first towards closing costs, and then the pre-paid items & escrow reserves.

The total seller credit also needs to fit within the limit that your loan program specifies, which most loan programs permit a seller credit from 2% of the sales price (non-owner occupied) all the way up to 9% of the sales price (primary residence).
1 vote Thank Flag Link Sun Jul 10, 2011
Agreed - used to be that a broader defintion "closing costs, prepaids and escrows" was used and could recoup additional costs, but no more. Restrictions on what can be reflected on the HUD closing statement are tighter. Assume only non-recurring closing costs. Building in a seller's concession that is higher than what can be covered will result in you leaving some it on the table.

Jeanne Feenick
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0 votes Thank Flag Link Tue Jul 19, 2011
Dear John,
Sellers Assist as mentioned by some Professionals is accurate in what they are sharing. However, should a seller ask for a Realty Tax, that should be payed by the Seller and NOT the Buyer.
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0 votes Thank Flag Link Mon Jul 11, 2011
In NJ the seller's assistance for closing costs can only be used for non-recurring closing costs, not escrows. The seller (depending on the mortgage type) can pay all of your closing costs, and it is up to them whether they ask for a repayment of taxes they have paid for but will not own the house for that time. If the house is heated by oil, the seller has the option of having the oil company measure the remainder of oil in the tank and ask you to pay them the value of the oil.
0 votes Thank Flag Link Sun Jul 10, 2011
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