However, here is an under-utilized idea regarding a Seller Assist. Many borrowers donâ€™t realize that FHA charges two types of mortgage insurance: the up-front MIP (mortgage insurance premium) equal to 1% of the base loan amount which you can finance into your mortgage/loan amount. The second mortgage insurance is included in your monthly payment, until you reach the required equity amount, which is usually about 10 years based on a minimum 3.5% down. This can be a hefty increase to your monthly payment!
If you have an additional 1.5% or a total of 5% down, you could qualify for an option where the seller, through a Seller Assist, can buy out your monthly mortgage insurance payment saving you substantial amounts on your monthly mortgage payment and actually increasing your purchasing power.
See my blog for more detailed information regarding this strategy.
Depending on the lender, the seller can contribute up to 6% of the sale price toward closing cost. The seller basically receives 94% of the sale less seller closing cost at closing. Keep in mind that the househas to appraise for the full sale price amount. Do you have a PA AOS? Steve