Ask the lender to lower your rate and reduce the lender credit to your advantage.
Talk to your lender. Talk to your realtor.
Figure it out.
The contracts are very specific as to where the money can be applied. Normally not to the balance of the loan. You need to get back with your loan officer to see if you can buy down interest rate and potentially use the extra funds for inspection report. You might also be able to try to spend the funds in some other way, but prepaying HOA fees, additional interest collected, additional taxes collected, or some other fees to eat up the unused balance of what seller has agreed to pay. You loan officer can walk you through this.
It is best not to listen to agents from out of state who do not know Texas real estate contracts. Look to your specific contract - paragraph 12.A.1.b. details your agreement with the Seller.
(b) Seller shall also pay an amount not to exceed $__________ to be applied in the
following order: Buyerâ€™s Expenses which Buyer is prohibited from paying by FHA, VA,
Texas Veterans Land Board or other governmental loan programs, and then to other
Buyerâ€™s Expenses as allowed by the lender.
Note that it provides a maximum (not minimum) that Seller will contribute, that it is specific as to what it can be used for, in a very specific order.
The part you are concerned about is the "other expenses as allowed by the lender". Every transaction is unique. It will depend on the type of financing that you have chosen, your specific credit profile, and the maximum contribution that the loan type allows. You will have to have a minimum personal investment in the transaction.
Only your loan officer (who has all of the facts about your transaction) can answer the question of whether you can use the full amount of the contribution or not. Any unused funds belong to the Seller.
Do not think of this as "money lost". Instead, focus on the fact that you have bought the home that you want at a price that you can afford with little to no extra closing costs.
Enjoy your new home!
Ask your lender if the additional can be applied to lower your rate? The lender credit comes from charging an above par rate. If they lower the rate, much or all of this will disappear but you'll have a lower payment for the life of your loan. Find out.
Generally anything left over is not used therefore not given. Of course I do not know the exacts of your contract and mortgage company. There are agents out there that do have programs for cash in your pocket. You might want to ask me about!
So Michael, all these questions, are you ready to go now?