Your seller credits cannot be used to increase your down payment. If you are using Conventional or FHA financing with an upfront mortgage insurance premium (UMIP), you can use a portion of the seller credits to pay down the MIP, or if you are using VA or USDA financing, you should be able to pay down their funding fee.
I hope that helps you with your dilemma. Please feel free to contact me if you have any further questions, I'd be glad to help.
All the best,
Roswell Moore, CMPS
Certified Mortgage Planner
We are a Direct Lender, Mortgage Bank where we originate, process, underwrite, fund, AND SERVICE our loans, in-house, with FHA (starting at a 580 score AND still only 3.5% down), FHA Streamline loans (no minimum credit score, no appraisal required) Go Green rehab loans, HomePath, Investor Friendly (10 financed properties), VA, USDA, Jumbo, Conventional, plus, we allow Escrow HoldBacks!
To clarity for others who may read this post, "PITI" payments are NOT allowed to be paid for by the seller. Only the "ITI" portion of that payment, Interest, Taxes & Insurance, can be paid by the seller, not any of the loan amount or Principal.
All the best,
Generally speaking they will allow:
all closing costs: title fees, pro-rated PITI, HOA dues up to 12 months (some lenders will do more), and as Ivan pointed out you can also buy down the loan.
You should talk with your lender to see what they will allow and go from there.
Lance King/Owner-Managing Broker
An option is to permanently buy down your rate using discount points. Usually longer terms are more expensive than ARM products. You can ask your mortgage advisor about the cost to determine if it's beneficial and a break even point. You will benefit on a monthly basis as long as you keep your mortgage instead of a one time benefit.
Home Mortgage Consultant
100 Grand Ave | Oakland, CA
(415) 271-7740 cell