Financing in Lewisville>Question Details

Juan, Real Estate Pro in Grand Prairie, TX

how much is the seller allow to pay on buyer closingcost?

Asked by Juan, Grand Prairie, TX Sun Oct 24, 2010

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I am a lender..... It doesn't matter who the lender is or who says there is a benchmark.

Conventional Mortgege: 3% of the sales price can be rebated back to the buyer in seller paid closing costs.
FHA/Other Gov't loans: Up to 6% of the sales price can be rebated back to the seller to cover closing costs.

These are called "Seller Concessions"
Unused seller concessions are kept by the seller. So your realtor needs to talk to your loan officer to set these numbers correctly..... Some realtors will try to set these numbers without consulting the loan officer and it can be a disaster.... You need a strong loan officer to protect you from the realor and seller on this issue.
1 vote Thank Flag Link Sun Oct 24, 2010
Hi, Juan.
FHA: up to 6% in seller concessions.
VA: up to 6% in seller concessions
CONV: up to 3% is your down payment is 5-10%. up to 6% is your down payment is 15% or more.
0 votes Thank Flag Link Mon Oct 25, 2010
The statements below are true. As a Realtor and an mortgage broker it is very important that your Realtor is communicating with the lender. Different loan programs have different requirements and you do not want to leave money on the table because a lender will not allow you to use it.

Talk with your lender directly about this so you can convey this information to your Realtor before you structure your next purchase offer.
0 votes Thank Flag Link Mon Oct 25, 2010

It will depend on what type of loan, what type of down payment, and perhaps the appraisal amount, etc the buyer is getting. Best to check directly with their lender.
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0 votes Thank Flag Link Mon Oct 25, 2010
Bruce Lynn, Real Estate Pro in Coppell, TX

Tom makes a great point about ensuring that your Realtor and lender are communicating. I have been involved in a couple of deals this year where the Buyer has left money on the table because his Realtor overshot the mark in Seller contributions.

When I represent a Buyer who is going to ask for Seller contributions, I start talkng about this strategy with the lender early to make sure we are on the same page, and that whatever is requested by the Buyer can be fully applied to the loan.

For budget planning, Tom's numbers of 3% conventional/6% FHA have worked very well for my clients, but it is very important to pay attention to the details behind these percentages once the negotiation starts to make sure the full amount is realized.

Hope this discussion thread has been helpful.
0 votes Thank Flag Link Mon Oct 25, 2010
That is up to your lender if you are rolling costs into your mortgage.

Best confer with your mortgage broker who will provide instructions to your buyers agent.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes Thank Flag Link Sun Oct 24, 2010
It depends on the type of loan. FHA, VA have buyer costs they can not pay, and the seller must do it. As for conventional, it depends on what the buyers bank will allow and what seller is will pay in closing costs on behalf of the buyer.

Good Luck!
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0 votes Thank Flag Link Sun Oct 24, 2010
Hi Juan,
The amount varies by lender, however a good benchmark is $5000-6000. It must go toward actual closing costs or to buy down the mortgage rate. All of which needs to be reflected on the HUD-1 closing statement. You should have your Real Estate Agent contact your Buyers Lender to verify the maximum amount they allow, and decide if the amount they are asking is in line with the Lenders guidlines.

Best of Luck!

0 votes Thank Flag Link Sun Oct 24, 2010
It really depends if the loan is FHA, VA or conventional or other. You should contact your bank for assistance or the buyer's potential bank.

Best of luck to you

0 votes Thank Flag Link Sun Oct 24, 2010
Hi Juan,

Typically the seller is allowed to pay up to 3% of the closing costs on an FHA loan. Depending on what type of loan you are deciding on and your down payment however this will vary. Also, there are grant programs out there where you can have the city or state assist you in your first time home purchase...

let me know if I can help or if you would like to speak with a preffered lender to get more help...
Web Reference:
0 votes Thank Flag Link Sun Oct 24, 2010
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