If you qualify fro a VA loan, that might be your best bet if you are trying to come up with little out of pocket. VA still allows up to 4% and they will finance 100% if it appraises.
NACA promotes that you can ask for as much concession as your Realtor can negotiate, which they use to buy down the interest rate. Unfortunately, this is not every case. And they may not be the loan processor that you are currently using.
Atlanta Housing Source at
Solid Source Realty, Inc.
Home Buyers & Sellers - http://www.AtlantaHousingSource.com
Property Management â€“ http://www.SolidSourcePM.com
If you have an fha loan the max seller concessions allowed now is 3%, unless your fha case number was issued prior to April 15th of this year. Either way subtract the max seller concessions allowed and reduce your sales price by the amount left.
Conventional financing allows for 6% seller concessions with 20% down so I would reduce the sales price by 1.45%.
Make sure that the sellers concessions are seller paid closing costs that can be used for "prepaids, closing costs, and discount points". Hope this helps.
see live current mortgage rates at http://www.current-mortgage-rates.net
Just to bring all of the mostly correct statements together, I would advise that the Seller can not make any contribution toward "downpayment". He can pay currently under FHA up to 6% ( it has been proposed that FHA will drop from 6% to 3% but that is not yet effective or in place. The seller can perhaps pay all of the closing costs (Get loan officer to control to make sure your total prepaids are also covered by the seller) and likely your prepaids (buyer pro-rated Property Tax share, Homeowners/Hazard Insurance and the appraisal fee). Because the purchaser would not have to pay these prepaid fees he/she could use those funds toward their downpayment. Under FHA you can also get a gift from a family member for downpayment. That gift plus your prepaid savings added together. Could perhaps help you make up the downpayment. Also based on your income and County, there may be some county downpayment money available. If so, you can use that and also just let the seller give you a better price without adding for downpayment.
For intelligent direction and possible solutions give me a call (770-316-8072) or e-mail me and I will pass Mark's e-mail and number on to you. All of these things are legal and approved by FHA. NOTE: THIS IS PROTECTIVE OF YOUR AGENT. I am only offering freindly advise. In this Sick Market, Agents need to help each other and their clients to help us all make it to the other side.
I am with Michael Hammond on this one. Where did you get a number for seller's concession like that?
Itâ€™s been my experience that the higher the sales price, the lower the percentage of seller concessions the seller is willing to pay. For example, if this is this a $100,000 purchase that would be $7,450 seller paid in closing costs, pre-paid expenses, and points at $200,000 your talking $14,900. That seems awfully excessive and I can't image you getting 7.45% on a $300,000 +price point.
For Fannie or Freddie Loans, the maximum allowable sellerâ€™s concessions are:
3% on 90-100% Loan to Value Loans.
6% on 75%-90% Loan to Value Loans.
9% on 75% or below Loan to Value Loans.
For government loans.
Max is 6% on FHA. (HUD was going to change to 3%, but this remains at 6%)!
When seller concessions exceed those percentages it creates "an inducement to purchase" which is a big no-no.
Hope that helps!