Seller Paid Closing Costs

One of the greatest reasons for choosing an FHA loan is because the allowed seller contributions are increased from 3% to a whopping 6%! This is usually more then enough to cover all of your closing costs, and this if course means that you will have more available money to furnish your new home for example.

For example if you are about to place a bid on a house valued at $100,000 as the list price. You might be thinking about making an offer for the property in the amount of $94,000 since it is common practice to bid under the list price. But instead of placing that lower bid you might what to accept the list price as is on condition the seller pay 6% of the value toward your closing costs. So no you have covered all your closing costs and the seller is still getting the same amount of money they thought they would be in the first place.

This method also works if you have good reason to believe the property is valued much higher then the sales price. In the case the seller will not accept any amount below $100,000 and you have very good reason to believe the property is valued at $106,000 or more you may be able to add that 6% to the top of the loan giving you a loan in the amount of $106,000 but keep in mind the sales price must now be increase to $106,000 and now include a seller concession of $6,000 and the end result is the same for the seller and you have saved $6,000!

Apply Now to discuss options with your Loan Officer!