Financing in Simi Valley>Question Details

fadedink7, Home Buyer in Simi Valley, CA

Is there any way to get money offered by the seller towards closing costs back in cash?

Asked by fadedink7, Simi Valley, CA Tue May 29, 2012

I am in the process of buying a short sale property and the bank that owns the property is offering me back $9,900 towards closing costs. I figure that closings costs won't add up to nearly that much so rather than buy down my rate with points, is there any way for me to get the remainder in cash?

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Jeff Smith’s answer
What are you trying to accomplish ? There are a few strategies you can use and if you don't use the entire credit you will lose it. Depending on how mortgage pricing is working on any given day, buying down the rate just to use the credit may or may not be cost effective. Ask for a lower price in exchange for some of the credit. But with a bank involved no cash back is allowed at closing. If you are forced to take the credit try a 2-1 buy down or something similar. A buy down is more or less just pre paying interest on the loan in exchange for a lower payment in year 1. Or ask if lender will let you do a principal reduction payment at closing with any excess credit. I hope this helps.
0 votes Thank Flag Link Tue May 29, 2012
No - as previous agents have said - you can't do this when you have a bank on the other side of the table. Actually, I've never seen this done regardless of who the seller is!! You can get enough for your closing and no more.
0 votes Thank Flag Link Tue May 29, 2012
No - as previous agents have said - you can't do this when you have a bank on the other side of the table. Actually, I've never seen this done regardless of who the seller is!! You can get enough for your closing and no more.
0 votes Thank Flag Link Tue May 29, 2012
No, especially banks, they do not give money back. If there is monies left over, it goes back to the bank. You might want to consider seeing if you can buy your rate down. Consult with your lender and see if the closing cost monies could be used to get a lower interest rate.
0 votes Thank Flag Link Tue May 29, 2012
No, especially banks, they do not give money back. If there is monies left over, it goes back to the bank. You might want to consider seeing if you can buy your rate down. Consult with your lender and see if the closing cost monies could be used to get a lower interest rate?
0 votes Thank Flag Link Tue May 29, 2012
In you case, I must agree with Carl. However, I have personally bought properties where I required the sellers to provide me cash at closing in lieu of repairs I requested. After inspection, I drafted up a sheet of repairs I wanted and gave them the option of providing me with cash at closing or making the repairs and they usually prefer to not mess with the repairs and write me a check.

I have done this at least 3 times for up to $1000. I have had a lender try to explain to me that a buyer cannot get cash back and I explained to her that I was meeting the ratios and providing the required funds for the transaction per the contract and this was outside the scope of that. Instead of them making repairs, I was at their expense. They ended up agreeing and financing (these were minor repairs and not major items affecting habitability). But that wil not work in your case as foreclosures are as-is, where-is homes - you kinda threw me because a bank owned property is not a short sale so I'm not sure which you mean. Good luck!
0 votes Thank Flag Link Tue May 29, 2012
The funds may be used only for closing cost, recurring and non recurring. Any unused credits are retained by the seller/bank. Any cash back would be againts lending guidelines. Buy the rate down as low as you can and be happy you only needed funds for the down payment and all your cost were covered.
0 votes Thank Flag Link Tue May 29, 2012
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