sel65, This is always a shell game as you approach closing. You can figure a bit over to be sure all is covered or a bit less to make sure you do not leave any money on the table. I have not run into a hard 3 percent maximum myself, but, in the current market we are seeing regulatory oversight grow in leaps and bounds. Also, the lenders are very nervous and do not want to get nailed by some government employee who has a set of rules and is looking for any minor deviation he can use to bring sanctions down on their head. You are looking at this market condition for about 2 to 5 years. After the politicians get over blaming each other and the spotlight gets off to the next topic, the market, regulators and politicians will get together and the situation will de-stress. Right now, there is just too much heat in the kitchen. If there is about 1750 left over, you might look at things you need to buy after closing, fridge, stove etc. and have the seller provide those as part of the deal then use the cash saved to pay the extra costs. Remember, you are buying from an institution and there is a lot less flexibility AND personal property included can also be a lender no-no.
In the end, we can outsmart ourselves trying to save a grand or two and sabotage the deal which is really what is important. Work with your loan broker and your agent. Again, do not loose sight of the goal--getting into your home. 1750 dollars is a lot of money, but, in the context of $275,000, it is meaningless. Likewise, this home probably sold for 500k two or three years ago, so you are doing pretty good. THE BIG PICTURE is what is important. Good Luck. Dave Atherton